Big Pharma, Big Pockets, Big Verdicts

Big Pharma. Though the multibillion-dollar industry has been wrought with drug product liability claims over the years, recent focus has shifted to one of the most public and socially-impactful cases to date: the National Prescription Opiate Litigation. The ongoing federal multi-state litigation (MDL 2804) case is a consolidation of lawsuits filed by nearly 2,000 counties, cities, municipalities, and tribal governments against pharmaceutical companies for their role in creating and escalating the opioid crisis that has ravaged the country since the early 2000s.[1] Overseen by Judge Dan Aaron Polster, MDL 2804 is expected to produce a global settlement in the near future, in the hopes of recuperating some of the healthcare and law enforcement costs endured by local governments in fighting the opioid crisis over the course of the previous decade.[2]

How did it come to this? Through a multi-year manhunt for deep-pocketed companies, led by plaintiffs fighting to recover hundreds of billions of dollars and achieve an admission of wrongdoing for a crisis that has claimed more than 400,000 lives.[3] Just over 20 years ago, the public and healthcare sectors were hailing Purdue Pharma for the creation of OxyContin, first introduced to the market in 1996.[4] In the years prior to the release of this blockbuster drug, the World Health Organization had denounced the under-treatment of pain, particularly in relation to postoperative and cancer pain management.[5] When physicians began to hesitantly prescribe opioids for cancer pain, leading pain researchers such as Ronald Melzack questioned why the miracles of these “wonder drugs” were not also extended to patients suffering from chronic pain.[6] From 1995-2000, several notable efforts were launched to encourage proper and standardized treatment of pain symptoms, including the American Pain Society’s “pain as the fifth vital sign” campaign and The Joint Commission’s “standards for pain management.”[7] Consequently, prescribers began to rely on opioid medications for adequate pain control; from 1997 to 2002, OxyContin prescriptions increased from 670,000 to 6.2 million.[8]Pharmaceutical companies capitalized on the misinformed public perception that opioid prescriptions would cease chronic pain, without adverse long-term side effects. The rumblings of a young opioid epidemic were born.

While a number of factors contributed to the rampant over-prescription of opioids in American pain management, pharmaceutical companies have borne the forefront of litigation, largely for their role in misbranding opioid products and launching misleading marketing campaigns. Drug makers have been charged with aggressively marketing opioids, convincing the public and physicians that opioids pose little addiction risk and are appropriate to treat a wide range of chronic pain.[9] These false claims posited that opioids were safer and less addictive than alternatives, despite mounting evidence that long-term usage contributed heavily to drug abuse.[10] As an extension of these misbranding allegations, plaintiffs have explored the application of public nuisance laws to the pharmaceutical industry’s role in the crisis, particularly in relation to deceptive marketing.[11] Consequently, the heart of the matter lies in whether the defending pharmaceutical companies can prove that they were not negligent in their marketing and branding of opioid products to physicians and the American public.

Sound familiar? For those who were born before the turn of the century, it should. Today’s opioid litigation bears strong similarities to the tobacco cases brought forth in the late 1990s, which ultimately culminated in a Master Settlement Agreement (MSA) of more than $200 billion.[12] Both lawsuits are rooted in the common factor of demanding that each respective industry claim responsibility for creating a national health crisis because they marketed and sold hazardous products, downplaying the risks posed to the American public.[13] That said, local governments face a more difficult task in convincing judges and juries that pharmaceutical companies are indeed liable for the opioid epidemic because of the role of the FDA in approving and regulating drugs, as well as the role of physicians as learned intermediaries. While tobacco products were marketed to the public via direct-to-consumer advertising and available over-the-counter, opioid products are – in theory – highly regulated and require a prescription with each use. Thus, despite the inherent similarities in the legal fights against Big Tobacco and Big Pharma, the tobacco MSA is unlikely to reveal insights into tort law outcomes in MDL 2804 because of the lack of federal oversight in the marketing of tobacco products.

Drug product litigation differs from other product liability cases because the products are subject to FDA approval and regulation; furthermore, drugs must be prescribed by physicians before being doled out to patients. Though the Supreme Court’s landmark ruling in Wyeth v. Levine (2009) makes it clear that FDA regulations act as the floor, not the ceiling, in a company’s responsibility to create, market, and distribute a safe and effective drug, the fact that a governmental agency has approved a product can make it difficult for juries to find that a pharmaceutical company has acted negligently. Often, pharmaceutical companies are only held liable for their products if they fail to warn consumers of a known defect, or should have known of that defect prior to marketing (Restatement (Second) of Torts, Section 402(a), Comment k). Marketing and use of a drug are deemed to be “fully justified” when drug products are properly prepared and packaged with proper directions and warnings.[14] Thus, the question is whether pharmaceutical companies adequately relayed all known – or reasonably scientifically knowable – dangers in advertising opioid products. Interestingly, early research mistakenly pointed toward the now-debunked belief that “therapeutic use of opiate analgesics rarely results in addiction.”[15] The idea, based on two retrospective and non-scientifically rigorous reviews from the 1980s, described opioid addiction rates as low as 0.03% amongst over 11,000 medical patients with no prior history of addiction.[16] Given the lack of scientific research regarding the long-term use of opioids at the time, it is plausible that in the late 1990s, pharmaceutical companies were unaware of the highly addictive nature of opioid products.

That said, pharmaceutical companies had the responsibility to conduct further safety studies and reassess marketing campaigns when evidence revealing that the over-prescription of opioids was contributing significantly to drug overdose deaths began to emerge. Though the U.S. Department of Health and Human Services did not declare the opioid crisis a public health emergency until 2017, it had been known for at least a decade prior that pharmaceutical companies were underplaying the risks associated with opioid products.[17] In 2007, Purdue Pharma pleaded guilty to federal charges related to the misbranding of OxyContin, resulting in a verdict of more than $650 million. Despite the charges, which arose in response to the company’s claim that OxyContin was less addictive and less subject to abuse than other opioids, Purdue Pharma continued to aggressively market their drug.[18] The company even went so far as to target the physicians who were the highest prescribers for opioids across the country, ensuring that they would maximize their profits.[19] In addition to targeting individual physicians, Purdue Pharma distributed branded promotional items to healthcare professionals, advocated the prescription of opioids for use in the non-malignant pain market, and instituted a lucrative bonus system for sales representatives who increased OxyContin sales in their territories.[20] These efforts, in combination with misrepresenting the risk of addiction in promotional campaigns, played a significant role in shaping the epidemic that now claims the lives of 130 Americans each day.[21]

It is in light of these aggressive marketing efforts that the plaintiff’s use of public nuisance laws becomes relevant; though these laws were traditionally used in property disputes, they are increasingly being cited in cases against private industries.[22] In the context of the opioid epidemic, the argument centers on the idea that pharmaceutical companies created a public nuisance by aggressively and deceptively marketing opioids to doctors and patients.[23] Through misleading marketing campaigns, opioid manufacturers capitalized on the social fears and healthcare failings associated with mismanagement of chronic and cancer pain in the 1990s, and successfully sold billions of dollars of prescription opioids to the American public. The public nuisance tactic prevailed in the opioid epidemic’s first bellwether case against Johnson & Johnson, resulting in an award of $572 million to Oklahoma for the company’s role in the state’s opioid-induced healthcare crisis.[24] In reading the damages verdict for this August 2019 ruling, the judge found the marketing campaign led by Johnson & Johnson to be “false, misleading, and dangerous,” causing “exponential increases” in rates of addiction and overdose death by convincing physicians and the public that “opioids were safe and effective for long-term treatment of chronic, non-malignant pain.”[25] The successful application of public nuisance law to the Oklahoma v. Johnson & Johnson opioid trial could be indicative of what is to come in MDL 2804 in the near future.

What’s Next?

In another bellwether case set to begin trial in early 2020, major pharmaceutical companies will engage in litigation with West Virginia’s Cabell County and the city of Huntington; the rural area faces the highest opioid overdose rate in the state, which itself accounts for the highest rate per capita of fatal opioid overdoses (57.8 per 100,000 people).[26] It will be interesting to see whether the defendants reach a settlement with the city and county, given that Mallinckrodt Pharmaceuticals and Johnson & Johnson each reached $30 million and $20.4 million settlements, respectively, with the Ohio counties of Cuyahoga and Summit just prior to trial in Fall 2019.[27]

Progress towards a settlement is also being made in MDL 2804, largely bolstered by Judge Polster’s desire to not just “move money,” but engage in concrete action to reduce the number of opioid pills in circulation and ensure that drugs that are still taken are being properly prescribed and used.[28] In September 2019, Judge Polster approved a “negotiation class” that permits lawyers for a group of 49 local governments to create a settlement deal on behalf of every city and county in the country, unless those entities explicitly opt out of the arrangement.[29] Unlike most class actions, which have a class representative decide whether a deal is an acceptable settlement, this lawsuit would allow the entire negotiation class to vote; if enough voters – and Judge Polster – approve it, the deal will go into action, resolving the remaining lawsuits against the pharmaceutical companies involved in the MDL, and possibly even protecting them from future lawsuits by cities and counties at the federal level.[30]

In negotiating a settlement for MDL 2804, plaintiffs must take care to ensure that funds are efficiently and effectively distributed to local governments for use in addiction treatment, overdose prevention services, healthcare costs, life-saving medication, and opioid-addiction research centers. One of the most heavily criticized aspects of the tobacco litigation settlement of the late 1990s was the fact that states found a way to divert settlement money to non-essential channels, such that only 5-8% of funds were actually used for anti-tobacco programs and to offset smoking-related healthcare costs.[31] Another delicate component of a proposed settlement deal would have to grapple with the loss of funds from Purdue Pharma, which has filed for Chapter 11 bankruptcy protection.[32] If bankruptcy court approves a settlement for the company, all involved parties will be bound by the terms, whether or not they are in line with the MDL settlement and plaintiff requests.[33] Finally, it must be realized by all plaintiffs that the goal of a nation-wide settlement should be to maximize financial returns to local and state governments to aid in the development of addiction prevention programs and to help cover healthcare costs associated with the epidemic. The terms of a settlement are not the place to establish new regulations on the pharmaceutical industry, despite the deceptive and misleading actions of opioid product manufacturers and distributors.[34] A global MDL settlement is perhaps the only way to effectively recuperate funds to deal with the crisis in a timely manner; from there, it is up to plaintiffs to learn from the tobacco industry’s mistakes in distributing the settlement money in an ethical and efficient manner.

[1]Scott Higham, Horwitz, Sari, and Bernstein, Lenny, “Johnson & Johnson Reaches $20.4 Million Settlement in Huge Opioid Case,” Washington Post, October 1, 2019, https://www.washingtonpost.com/investigations/johnson-and-johnson-reaches-tentative-204-million-settlement-in-massive-opioid-case/2019/10/01/6a8a9670-e48e-11e9-b403-f738899982d2_story.html.

[2] Nora Freeman Engstrom, Michelle Mello, and Sharon Driscoll, Suing the Opioid Companies, August 30, 2018, https://law.stanford.edu/2018/08/30/q-and-a-with-mello-and-engstrom/.

[3] “Opioid Overdose: Understanding the Epidemic,” Centers for Disease Control and Prevention, July 24, 2019, https://www.cdc.gov/drugoverdose/epidemic/index.html.

[4] Colin Dwyer, “Your Guide To The Massive (And Massively Complex) Opioid Litigation,” NPR.org, October 15, 2019, https://www.npr.org/sections/health-shots/2019/10/15/761537367/your-guide-to-the-massive-and-massively-complex-opioid-litigation.https://www.npr.org/sections/health-shots/2019/10/15/761537367/your-guide-to-the-massive-and-massively-complex-opioid-litigation.

[5] Mark R. Jones et al., “A Brief History of the Opioid Epidemic and Strategies for Pain Medicine,” Pain and Therapy 7, no. 1 (June 2018): 13–21, https://doi.org/10.1007/s40122-018-0097-6.

[6] Jones et al.

[7] Jones et al.

[8] Jones et al.

[9] Jeffrey Miron, Greg Sollenberger, and Laura Nicolae, “Overdosing on Regulation: How Government Caused the Opioid Epidemic,” Cato Institute, February 14, 2019, https://www.cato.org/publications/policy-analysis/overdosing-regulation-how-government-caused-opioid-epidemic.

[10] “Opioid Overdose Crisis,” National Institute on Drug Abuse, January 22, 2019, https://www.drugabuse.gov/drugs-abuse/opioids/opioid-overdose-crisis.

[11] Michelle Mello, Nora Freeman Engstrom, and Sharon Driscoll, Stanford Legal Experts on the Oklahoma Opioids Verdict and Ongoing Litigation, August 28, 2019, https://law.stanford.edu/2019/08/28/stanford-legal-experts-on-the-oklahoma-opioids-verdict-and-ongoing-litigation/.

[12] Engstrom, Mello, and Driscoll, Suing the Opioid Companies.

[13] Engstrom, Mello, and Driscoll.

[14] “Comment K,” accessed November 7, 2019, https://biotech.law.lsu.edu/courses/drugsf02/comment_k.htm.

[15] Jones et al., “A Brief History of the Opioid Epidemic and Strategies for Pain Medicine.”

[16] Jane Porter, “Addiction Rare in Patients Treated with Narcotics,” New England Journal of Medicine 302, no. 2 (January 10, 1980): 123–123, https://doi.org/10.1056/NEJM198001103020221.

[17] “What Is the U.S. Opioid Epidemic?,” Text, U.S. Department of Health and Human Services, December 4, 2017, https://www.hhs.gov/opioids/about-the-epidemic/index.html.

[18] Art Van Zee, “The Promotion and Marketing of OxyContin: Commercial Triumph, Public Health Tragedy,” American Journal of Public Health99, no. 2 (February 2009): 221–27, https://doi.org/10.2105/AJPH.2007.131714.

[19] Van Zee.

[20] Van Zee.

[21] “Opioid Overdose: Understanding the Epidemic.”

[22] Sara Randazzo, “Purdue Pharma Begins Resolution of Opioid Cases With $270 Million Deal,” WSJ, March 26, 2019, https://www.wsj.com/articles/purdue-reaches-270-million-settlement-with-oklahoma-in-opioid-crisis-case-11553606534.

[23] Mello, Engstrom, and Driscoll, Stanford Legal Experts on the Oklahoma Opioids Verdict and Ongoing Litigation.    

[24] Higham, Horwitz, Sari, and Bernstein, Lenny, “Johnson & Johnson Reaches $20.4 Million Settlement in Huge Opioid Case.”

[25] Mello, Engstrom, and Driscoll, Stanford Legal Experts on the Oklahoma Opioids Verdict and Ongoing Litigation.

[26] “Rural Communities In Crisis,” Johns Hopkins Bloomberg School of Public Health, accessed November 8, 2019, https://americanhealth.jhu.edu/RuralOpioidsCount.

[27] Higham, Horwitz, Sari, and Bernstein, Lenny, “Johnson & Johnson Reaches $20.4 Million Settlement in Huge Opioid Case.”

[28] Engstrom, Mello, and Driscoll, Suing the Opioid Companies.

[29] Dwyer, “Your Guide To The Massive (And Massively Complex) Opioid Litigation.”

[30] Dwyer.

[31] Engstrom, Mello, and Driscoll, Suing the Opioid Companies.

[32] Dwyer, “Your Guide To The Massive (And Massively Complex) Opioid Litigation.”

[33] Dwyer.

[34] Purcell, Michael J., “Settling High: A Common Law Public Nuisance Response to the Opioid Epidemic,” Columbia Journal of Law and Social Problems 52, no. 1 (n.d.): 135–77.