Opioid Epidemic Litigation Update: Defendants Are Settling, but Who Will Benefit?
By: Chelsea Gulinson, Milligan Lawless, P.C.
Though overshadowed by the COVID-19 Pandemic, the Opioid Epidemic has quietly charged forward, with over 100,000 Americans dying from drug overdoses in 2021. State, local, and tribal governments have filed thousands of lawsuits against companies and individuals responsible for producing, manufacturing, distributing, or prescribing opioids seeking to hold them accountable for their role in the Epidemic. Novel legal theories, such as public nuisance violations, have been successful in some jurisdictions, but have failed in others. Some verdicts have been upheld; others reversed or remanded.
Despite this uncertain legal landscape, several Big Pharma companies have recently settled with state governments for billions of dollars and injunctive relief. Whether such an influx of cash will truly mitigate the effects of the Opioid Epidemic on the victims—those suffering from substance use disorder and families grieving their lost loved ones—is yet to be determined. This blog post briefly describes the current state of the Opioid Epidemic and recent developments in related litigation.
From 1999 to 2019, almost 500,000 Americans died from a drug overdose involving an opioid. The first wave of the Opioid Epidemic began in 1999 with increased prescriptions of opioids. In 2010, the second wave saw rapid increases in overdose deaths involving heroin. The third wave commenced in 2013, with drug overdose deaths overwhelmingly characterized by synthetic opioids, particularly fentanyl.[i]
In 2019, 70,630 drug overdose deaths occurred in the United States, a 4.3% increase from 2018. Nearly 50,000 deaths were attributable to opioids, over 36,000 involving synthetic opioids.[ii] In 2020, drug overdose deaths increased to nearly 100,000 Americans, a 30% increase from 2019. The COVID-19 Pandemic, which claimed the lives of over 1 million Americans, exacerbated the Opioid Epidemic by disrupting access to prevention, treatment, and harm reduction services. It also highlighted ongoing disparities in access to health care among minority groups. For example, drug overdose deaths disproportionately increased among Black and American Indian/Alaskan Native persons from 2019 to 2020 due to stigmatization, criminalization, and lack of access to evidence-based treatments.[iii] “Provisional” data from the CDC indicate that over 100,000 Americans died from a drug overdose in 2021.[iv]
In 2020, almost 4,000 non-fatal opioid overdoses occurred in Arizona, with 1,886 opioid-related overdose deaths. In 2021, Arizonans suffered 3,555 non-fatal opioid overdose events, and over 2,000 Arizona residents died from opioid-related overdoses. As of September 8, 2022, nearly 2,000 non-fatal opioid overdoses have occurred, and 372 Arizona residents have died from an opioid-related overdose.[v]
Data about opioid prescribing rates help illuminate how the Opioid Epidemic began, why it persists, and why many hold Big Pharma responsible for the Epidemic. Of individuals who began abusing opioids in the 1960s, more than 80% started with heroin. In contrast, of those who began abusing opioids in the 2000s, 75% started with a prescription drug, and nearly 80% of heroin users reported using prescription opioids before using heroin.[vi]
The opioid prescribing rate began to increase steadily in 2006, peaking in 2012 at more than 255 million opioid prescriptions, with a dispensing rate of 81.3 prescriptions per 100 persons. The national opioid dispensing rate declined between 2012 to 2020, with 43.3 opioid prescriptions per 100 persons in 2020 (still, more than 142 million opioid prescriptions). Although 2020 saw the lowest opioid dispensing rate to date, for which we have data, dispensing rates remained high in specific hotspots across the country. In 2020, Southern states, including Kentucky, Tennessee, Alabama, Louisiana, Mississippi, and Arkansas, saw an opioid dispensing rate between 64.1 and 82.9 opioid prescriptions per 100 persons. And some counties saw opioid dispensing rates of over 112.5 opioid prescriptions per 100 persons.[vii]
One of the first Opioid Epidemic lawsuits commenced in 2017, when the State of Oklahoma sued Johnson & Johnson, Purdue Pharma, and Teva Pharmaceuticals, alleging that the companies deceptively marketed opioids in Oklahoma. After settling with Purdue Pharma and Teva Pharmaceuticals, the State dismissed all claims against Johnson & Johnson except a novel public nuisance argument. After a 33-day bench trial, the Court held that Johnson & Johnson, “acting in concert with others, embarked on a major campaign in which they used branded and unbranded marketing to disseminate the messages that pain was being undertreated and ‘there was a low risk of abuse and a low danger’ . . . designed to reach Oklahoma doctors through multiple means and at multiple times over the course of the doctor’s professional education and career.”[viii] The Court awarded a $572 million judgment against Johnson & Johnson. On November 9, 2021, however, the Oklahoma Supreme Court overturned the verdict against Johnson & Johnson, holding that Oklahoma’s public nuisance law did not extend to the manufacturing, marketing, and selling of prescription opioids.[ix] Oklahoma later settled with Johnson & Johnson, McKesson, Cardinal, and AmerisourceBergen for $26 billion.[x]
New Hampshire filed suit against Johnson & Johnson’s subsidiaries in 2018, alleging that the company misrepresented that their opioids were safer than alternatives in aggressive marketing to prescribers and patients. New Hampshire also alleged that the company “disseminated misleading statements about opioids, that they promoted the false concept of pseudoaddiction and that they misrepresented that their opioids were rarely addictive when used for chronic pain.” On September 1, 2022, Johnson & Johnson entered into a $40.5 million settlement with New Hampshire, with $21.5 million of the settlement to be used for opioid abatement purposes. Along with the settlement payment, Johnson & Johnson agreed to a ban on selling and manufacturing opioids, promoting opioids and opioid products, and prescription savings programs, as well as lobbying restrictions and stringent enforcement provisions.[xi]
The Ohio Multi-District Litigation – a consolidation of over 3,000 cases brought by state, local, and tribal governments – has recently held pharmacies responsible for their role in the Opioid Epidemic. On August 17, 2022, a court ordered CVS, Walgreens, and Walmart to pay $650.5 million to two Ohio counties after a jury returned a verdict against them last November. The jury found the defendants liable for causing a public nuisance by intentional and illegal conduct, such as oversupplying legal prescription opioids that were diverted into illicit markets.[xii] A spokesperson for CVS indicated the company would appeal, claiming that CVS’s pharmacists “fill legal prescriptions written by D.E.A.-licensed doctors who prescribe legal, F.D.A.-approved substances to treat actual patients in need.” A Walmart spokesperson blamed the “real causes of the opioid crisis, like pill mill doctors, illegal drugs and regulators asleep at the switch.”[xiii]
Pharmacies have attempted to shift blame to physicians, but the Supreme Court recently sided with two physicians convicted of unlawfully dispensing and distributing drugs and sentenced to more than 20 years in prison. The Supreme Court vacated the physicians’ convictions and rejected the government’s mens rea standard of an “objectively reasonable good-faith effort.” Instead, the Supreme Court held that the government “must prove beyond a reasonable doubt that the defendant knowingly or intentionally acted in an unauthorized manner.”[xiv]
States, municipalities, and tribal nations have filed suits against various parties, including pharmaceutical companies, manufacturers, distributors, and doctors. Big Pharma has been accused of, and found liable for, oversupplying Americans with billions of pain medications. As settlements occur, many question whether the government should also be held responsible for its failures in preventing and combating the Epidemic. For example, some point to the FDA’s approval of OxyContin’s revised 2001 label for “around-the-clock” pain relief. Others find fault with the DEA due to the agency’s slow response to the significant increase in the use and diversion of opioids, failure to use available resources, and inadequate policies that did not hold registrants accountable or prevent diversion of pharmaceutical opioids.[xv] And although defendants have agreed to pay billions of dollars to help compensate victims, others are not confident that governments receiving the settlement funds will spend these funds effectively. Perhaps jaded by states’ misspending of their annual proceeds from the $246 billion tobacco Master Settlement Agreement, the likelihood of fights between state and local governments, and politicians on both sides of the political spectrum, critics are rightly concerned about whether the victims of the Opioid Epidemic will see any meaningful relief.[xvi]
[i] Understanding the Epidemic, CDC, https://www.cdc.gov/drugoverdose/epidemic/index.html (last accessed Sept. 8, 2022).
[ii] Christine L. Mattson, Ph.D. et al., Trends and Geographic Patterns in Drug and Synthetic Opioid Overdose Deaths – United States, 2013 – 2019, Morbidity and Mortality Weekly Report, CDC, Feb. 12, 2021, available at https://www.cdc.gov/mmwr/volumes/70/wr/mm7006a4.htm?s_cid=mm7006a4_w.
[iii] Mbabazi Kariisa, PhD et al., Vital Signs: Drug Overdose Deaths, by Selected Sociodemographic and Social Determinants of Health Characteristics – 25 States and the District of Columbia, 2019-2020, Morbidity and Mortality Weekly Report, CDC, July 22, 2022, available at https://www.cdc.gov/mmwr/volumes/71/wr/mm7129e2.htm?s_cid=mm7129e2_w#suggestedcitation.
[iv] Provisional Drug Overdose Death Counts, National Center for Health Statistics, CDC, https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm#notes (last accessed Sept. 8, 2022).
[v] Weekly Opioid Data, Opioid Prevention, Arizona Department of Health Services, https://www.azdhs.gov/opioid/ (last accessed Sept. 8, 2022).
[vi] Prescription Opioids and Heroin Research Report, National Institute on Drug Abuse, Rev. Jan. 2018, available at https://nida.nih.gov/download/19774/prescription-opioids-heroin-research-report.pdf?v=fc86d9fdda38d0f275b23cd969da1a1f.
[vii] U.S. Opioid Dispensing Rate Map, CDC, available at https://www.cdc.gov/drugoverdose/rxrate-maps/index.html (last accessed Sept. 8, 2022).
[viii] Judgment After Non-Jury Trial, State of Oklahoma ex rel. Hunter v. Purdue Pharma, L.P. et al., District Court of Cleveland County State of Oklahoma, case no. CJ-2017-816 (Aug. 26, 2019), available at https://int.nyt.com/data/documenthelper/1660-oklahoma-opioid-trial-johnson-and-johnson/79f3fe55f5fa1a75bd48/optimized/full.pdf#page=1.
[ix] District Court’s Judgment Reversed, State of Oklahoma ex rel. Hunter v. Johnson & Johnson et al., Supreme Court of the State of Oklahoma, case no. 118,474 (Nov. 9, 2021), available at https://www.washingtonpost.com/context/oklahoma-court-overturns-465m-opioid-ruling-against-j-j/159ce2c6-f6ba-4e6a-bfaa-539702c744be/?itid=lk_inline_manual_4.
[x] Christine Minhee, States and Localities Have $38 Billion (Ish) on the Table, available at https://www.opioidsettlementtracker.com/globalsettlementtracker (last access Sept. 9, 2022).
[xi] Attorney General Reaches $40.5 Million Settlement with Johnson & Johnson to Settle Opioid Claims, New Hampshire Department of Justice, Sept. 1, 2022, https://www.doj.nh.gov/news/2022/2022901-opioid-settlement.htm.
[xii] Abatement Order, In re National Prescription Opiate Litigation, United States District Court Northern District of Ohio, case no. 1:17-md-2804 (Aug. 17, 2022), available at https://www.ohnd.uscourts.gov/sites/ohnd/files/4611.pdf.
[xiii] Jan Hoffman, CVS, Walgreens and Walmart Must Pay $650.5 Million in Ohio Opioids Case, N.Y. Times (Aug. 18, 2022), available at https://www.nytimes.com/2022/08/17/health/opioids-cvs-walmart-walgreens.html.
[xiv] See Siulu Ruan v. United States, Supreme Court of the United States, case no. 20-1410 (June 27, 2022), available at https://www.supremecourt.gov/opinions/21pdf/20-1410_1an2.pdf.
[xv] Review of the Drug Enforcement Administration’s Regulatory and Enforcement Efforts to Control the Diversion of Opioids, Office of the Inspector General, U.S. Department of Justice (Sept. 2019), available at https://oig.justice.gov/reports/2019/e1905.pdf.
[xvi] See Christine Minhee, supra note x, at https://www.opioidsettlementtracker.com/faq/#bigtobacco.