Opioid Crisis and Settlements: Where We are Today
13 Jul 2022
July has brought the latest in a string of allegations and settlements for biopharmaceutical companies accused of being at the heart of the opioid epidemic. which caused 48,006 overdose-related deaths in 2019 and 2020 alone, according to the U.S. Department of Health and Human Services. BioSpace takes a look at some of the recent legal battles and settlements across the industry.
Johnson and Johnson’s $26B Opioid Settlement
In February, Johnson and Johnson, alongside drug distributors McKesson Corp, AmerisourceBergen Corp. and Cardinal Health, agreed to finalize a $26 billion settlement which resolved claims that the companies fueled the opioid epidemic. J&J is responsible for $5 billion in the settlement.
The settlement covered more than 3,000 lawsuits against the companies filed by state and local governments. Although the companies denied the allegations, the lawsuits claimed the distributers had lax controls that allowed large amounts of opioids to be directed into illegal channels and that drug makers, including J&J, downplayed the risk of addiction in its marketing practices. Most states with lawsuits against the quartet of companies agreed to settle although all four still face open claims in Alabama, Oklahoma, Washington and West Virginia.
West Virginia recently postponed its opioid trial against the companies that recently won a federal court case that raised similar claims in Cabell County and the city of Huntington. U.S. District Judge David Faber ruled that the three distributors did not have to pay $2.5 billion to address the opioid crisis in the region, stating that there was “nothing unreasonable” about the companies’ sale of opioids to fulfill prescriptions and that they complied with tracking suspicious drug orders.
Regardless of the results of West Virginia’s trials, the four companies began settlement payments in April, of which $2.3 billion is set aside to cover fees and expenses of the plaintiffs’ lawyers and state attorneys general. The payments will take place over the next 18 years and are planned to be directed toward treatment, recovery and education.
Teva Faces Allegations of Lying, Misleading
On Monday, New York state accused Israel-based Teva Pharmaceuticals of lying about its role in the state’s opioid crisis. New York’s attorney general said that the company lied to avoid being held accountable for helping to fuel the opioid crisis.
Previously, New York and its counties had accused Teva of engaging in marketing practices that were misleading and fueled the opioid crisis and said that the company pushed drugs for off-label use. In December 2021, a jury found that the U.S. subsidiary of Teva was responsible for fueling opioid addiction in the state.
Now, the company faces serious allegations that it lied about its involvement with Teva Pharmaceuticals USA. In court, Teva provided sworn testimony that it transacted no business, held no property in and had no role in the American opioids business. However, the parent company of Teva was found to have been a primary decision maker for Teva USA and maintained property, employees and extended control over finances in the U.S. New York’s attorney general now argued that the court should vacate Teva Parent’s previous dismissal from the opioid litigation.
Beyond Teva, New York has also been engaged in a lawsuit with Mallinckrodt for its alleged role in fueling the opioid crisis and purportedly using misleading marketing tactics to encourage the use of its opioids. Last month, the company agreed to pay the state $58.5 million. Previously, it agreed to pay $26.8 million to the state’s Medicaid fund.
On Tuesday, Teva, alongside Allergan, agreed to pay $34 million in cash and provide $20 million worth of overdose reversal drugs in San Francisco as part of a settlement to a lawsuit that accused the companies of fueling an overdose and addiction surge in the city. Teva has previously put down $378 million in opioid settlements with four states.
McKinsey Under Fire
In April, McKinsey and Company, a consulting firm that handles healthcare and life sciences companies, was at the center of allegations that the company allowed its employees to consult for big pharma companies and the U.S. Food and Drug Administration simultaneously. The New York Times report said this allowed for big conflicts of interest when it comes to opioids such as those produced by Purdue Pharma. At the time of the allegations, McKinsey denied that its consultants would have played a role in swapping information between Purdue and the FDA.
Now, 114,000 documents have been released showing that McKinsey advised opioid makers Purdue, Endo Pharmaceuticals, Johnson and Johnson and Mallinckrodt to help them increase sales. The documents were released by the Opioid Industry Documents Archive and stem from the company’s files spanning from 2004 to 2019 and were released under the terms of a $573 million settlement that McKinsey reached with 47 states.
Included amongst the documents were letters from regulatory agencies such as the FDA that included responses to new drug applications from opioid manufacturers, preparation materials for regulatory advisory committee meetings and opioid-related transition documents for state and federal agencies, providing potential evidence that the company was a middleman between biopharma and the FDA. The New York Times reported that McKinsey devised a strategy known as “Sales Force Blitz” which was used with Endo Pharmaceuticals to push painkiller Opana after it had already scaled backed promotion of the drug.
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