CAMERON CHUBACK—For the last two decades, the United States has faced a devastating opioid crisis. More than 130 people die every day of opioid overdoses, and approximately 400,000 deaths in total have occurred since the crisis’s inception, 47,000 of which came in 2017 alone. Moreover, the Centers for Disease Control and Prevention has reported that the crisis has cost “an estimated $78.5 billion a year in health care, lost productivity, and involvement by the criminal justice system.” According to the National Institute on Drug Abuse, the combination of pharmaceutical companies’ misleading reassurance about the safety of their prescription opioid pain relievers and the subsequent increased rate of prescriptions for these drugs kindled the opioid crisis. Now, numerous legal disputes have unfolded this year that target certain pharmaceutical companies for allegedly directly contributing to this epidemic.
This year, many pharmaceutical companies linked to the opioid crisis have proffered settlements to resolve their disputes. Noteworthy examples are Purdue Pharma’s settlement with Oklahoma for $270 million, Teva Pharmaceuticals’ settlement with Oklahoma for $85 million, and UK-based Mallinckrodt’s pending settlement with two Ohio counties for $30 million.
However, some companies have had to enter litigation to resolve their disputes. In August, an Oklahoma judge ordered Johnson & Johnson (“J&J”), a major supplier of opiate ingredients and manufacturer of its own opioids, to pay the state $572 million for its promulgation of “‘false, misleading, and dangerous marketing campaigns’ that ‘caused exponentially increasing rates of addiction, overdose deaths,’ and babies born exposed to opioids.” The court’s holding relies on Oklahoma’s legal theory that J&J “perpetuated a ‘public nuisance,’ substantially contributing to an ongoing public health crisis . . . .” A public nuisance is anything that “affect[s] the health, safety, welfare, and/or comfort of the general public[,]” which can be punishable as a criminal or civil offense. Accordingly, “the state [successfully] argued that J&J substantially interfered with public health.”
Meanwhile, a critical opioid-related legal dispute is brewing whose outcome could influence the future of how similar disputes will be handled. Purdue Pharma (“Purdue”), the manufacturer of OxyContin who many see as the ignition of the opioid crisis, has reached a tentative settlement with plaintiffs, who comprise mainly “states, cities, towns and tribes[,]” to avert potential charges of violations of “continuing criminal enterprise” statutes. If enacted, the settlement would direct Purdue to contribute a total between $10 billion and $12 billion, which would include $3 billion directly out of the owners’ pockets. Furthermore, the owners of Purdue, the Sackler family, would renounce ownership of the company.
If the settlement is enacted, Purdue plans to file for Chapter 11 bankruptcy, which would allow Purdue to “transform [] from a private company into a ‘public beneficiary trust.’” Not only would the company’s reorganization effectively facilitate the settlement contributions, but it would also permit future company profits from drug sales to be routed directly to the plaintiffs. Purdue calls this plan “a constructive global resolution,” which it believes is a better alternative to “years of wasteful litigation and appeals” because “[t]he people and communities affected by the opioid crisis need help now.” However, many state attorneys general “are lining up against the deal,” asserting that it does not offer sufficient recompense.
It appears that judgment day has arrived for many pharmaceutical companies tied to the opioid crisis. Whether on-going and future opioid-related disputes can resolve in settlements instead of becoming litigation is yet to be seen. If litigation does occur, it is possible plaintiffs will rely on Oklahoma’s public nuisance legal theory. Nevertheless, settlements may be harder to achieve than one may think. For example, it has been suggested that Purdue continued unethical, illicit marketing of OxyContin in spite of a 2007 judgment that directed the company to pay a $600 million fine for its misleading representations about the drug. This may not come as a surprise if one thinks, as some do, that big pharmaceutical companies see legal costs and monetary judgments as costs of operation that are relatively diminutive compared to a year’s revenue. Additionally, the New York attorney general’s office “uncovered roughly $1 billion in wire transfers by the Sackler family . . . in an apparent attempt by the family to shield part of its fortune” in the face of its current legal disputes.
Considering these controversies, plaintiffs may be skeptical of the sincerity of solutions such as constructive global resolutions and hesitate to assent to settlement. Instead, plaintiffs may prefer litigation because it would compel accused pharmaceutical companies to enter a courtroom, where sanctions could be more severe, and the companies’ responsibility for the opioid crisis could be officially affirmed.
