Massive pharma payouts

Nation's first opioid trial could set precedent for massive pharma payouts

By PAUL DEMKO

A trial kicking off in Norman, Oklahoma, on Tuesday will provide an unprecedented examination of how the country spiraled into a devastating opioid epidemic — and could indicate to what degree drug companies accused of fueling the crisis will be held responsible in hundreds of other lawsuits still pending across the country.

Most of the litigation against opioid makers and distributors — involving states, cities, counties and tribes — is wrapped up in a single massive lawsuit overseen by a federal judge in Ohio. But the Oklahoma lawsuit against two manufacturers of prescription painkillers will be the first to reach trial and could establish a precedent for damages paid to communities ravaged by opioids.

The Oklahoma trial, which will be broadcast online, is expected to last for much of the summer, putting a national spotlight on the opioid crisis, which is still killing 130 people in the United States every day. The testimony will focus on how much manufacturers of highly addictive painkillers are to blame for getting patients hooked on opioids through misleading medical claims and aggressive marketing practices.

The trial involving Johnson & Johnson and Teva Pharmaceuticals will be closely watched by the hundreds of parties participating in the larger multi-district litigation overseen by U.S. District Court Judge Dan Polster, who has been pushing for a massive settlement before the first of those cases go to trial in the fall.

“It’s going to be one of the first times that there will be evidence presented in an open forum about how we got to where we are,” said Joe Rice, co-lead counsel in the federal litigation targeting drugmakers and distributors in Ohio. “That’s a big question that a lot of people in the health community want to know. … Why and how did we get here?”

The larger federal litigation overseen by Polster involves well over 1,000 lawsuits from governments and groups who argue they’re owed tens of billions of dollars in damages for the fallout from the addiction crisis. Unlike the Oklahoma trial, those cases will involve Purdue Pharma, the makers of OxyContin, which more than any company has been blamed for flooding the country with painkillers.

The first of those trials is scheduled to begin in October. There are also dozens of cases winding their way through state courts that could be affected by the outcome of the Oklahoma trial.

Still, the Oklahoma case may not be an ideal vehicle for assessing the broader opioid litigation landscape because it targets just two companies, Johnson & Johnson and Teva.

Purdue and its owners, the Sackler family, settled with Oklahoma for $270 million in March, which some state lawmakers and public health experts condemned as too meager. The biggest chunk of that settlement, $200 million, will be used to establish a new addiction treatment center at the University of Oklahoma. Another $60 million will be paid to attorneys involved in the case, and just $12 million will filter down to cities and towns struggling to deal with the addiction epidemic.

Oklahoma Attorney General Mike Hunter stressed that the settlement was the best option because of the threat that Purdue would declare bankruptcy and the state might end up with nothing. But that means Oklahoma’s attorneys will have to make the potentially trickier case that other, less notorious players in the opioid pipeline created a “public nuisance” in the state by pushing misleading medical claims.

“A big question in the lawsuits is how far liability should extend,” said Abbe Gluck, director of the Solomon Center for Health Law and Policy at Yale Law School. “It’s a test case about the broader web of defendants that are involved in this lawsuit precisely because Purdue is not in it.”

The two drug companies on trial — Johnson & Johnson subsidiary Janssen Pharmaceuticals and Teva subsidiary Cephalon — contend Oklahoma’s lawsuit is trying to pin the blame on them for a public health catastrophe they’re not responsible for creating. They argue federal drug regulators at the FDA approved labeling for their products and that they account for a tiny share of the overall opioid market.

“Janssen will continue to defend itself, because the claims raised against it in the Oklahoma litigation have no basis in fact or the law — and that will be made clear during trial,” said John Sparks, Oklahoma general counsel for Janssen. Teva did not respond to requests for comment.

The Oklahoma case will be decided by Cleveland County District Judge Thad Balkman, rather than a jury.

But even if the trial starting Tuesday isn’t perfectly representative of the sprawling legal fight against opioid companies, the proceedings are likely to influence how the hundreds of other lawsuits play out, experts said.

“Any time there’s a resolution by way of settlement or by way of a verdict, it’s a piece of information that goes into everybody’s evaluation of every other case,” said Rice, the attorney involved in the multi-district litigation. “Whether it’s good or bad depends on what the numbers are and who it is.”

Andrew Pollis, a professor at Case Western Reserve University School of Law, said a big judgment against Johnson & Johnson and Teva could push other defendants to settle rather than take their chances at trial.

“That would portend even worse news for the industry in a case in which Purdue Pharma is actually at the table,” Pollis said. “If it’s bad without Purdue, it’s going to be even worse with it.”

The closest precedent to the sprawling opioid litigation is the tobacco lawsuits of two decades ago. Those cases eventually resulted in a master settlement of more than $200 billion in damages across 46 states.

Doug Blanke, who was a key player in Minnesota’s separate lawsuit against the tobacco companies, pointed out the major national settlement came shortly after the companies agreed to a nearly $7 billion settlement with the state following a five-month trial.

“When we got that result, that was the big driver for what became the national settlement, which came along six months after ours,” said Blanke, now director of Mitchell Hamline School of Law’s Public Health Law Center in Minnesota. “Whoever becomes the benchmark going to trial really can drive things.”

Blanke cautioned, however, any settlements resulting from the opioid lawsuits must be targeted at the problem. Just a fraction of the tobacco settlement has been directed toward smoking cessation and prevention efforts, while states have used the money to fill budget gaps and support unrelated projects.

“They used it to do other things that I’m sure were perfectly worthy — balance the state budget or build a building somewhere — but for purposes that have absolutely nothing to do with the reasons the lawsuit was brought,” Blanke said. “Let’s make the punishment fit the crime here.”