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Johnson & Johnson Ordered To Pay $572 Million In Opioid Case

A Johnson & Johnson building is shown in Irvine, California, U.S., January 24, 2017. REUTERS/Mike Blake/File Photo
A Johnson & Johnson building is shown in Irvine, California, U.S., January 24, 2017. REUTERS/Mike Blake/File Photo

“Johnson & Johnson executives made the calculated and coldblooded decision that they were going to produce a mutant strain of poppy, corner the market and supply massive amounts of the active ingredients for other companies to manufacture opioids.”

An Oklahoma judge found Johnson & Johnson (J&J) responsible for fueling the opioid crisis on Monday, ordering the pharmaceutical giant to pay $572 million in damages. While the decision represents the first ruling in the U.S. holding a drugmaker accountable for influencing the opioid epidemic, the sum was far less than the $17 billion the state demanded, boosting J&J’s shares.

“JNJ has a $500 million loss, but you know what, some people were looking for $17 billion,” CNBC’s “Mad Money” host Jim Cramer said Monday after the decision, arguing the penalty wouldn’t be a major problem for the company. “No one was [expecting] less than $1 billion, and JNJ’s going to appeal.”

The case was brought forward by Oklahoma Attorney General Mike Hunter, who argued that J&J’s deceptive marketing techniques overloaded the state with addictive painkillers. Between 2015 and 2018, more than 18 million opioid prescriptions were written in Oklahoma, a state of only 4 million people. 388 Oklahoma residents died of opioid overdoses in 2017 alone.

District Judge Thad Balkman was convinced by the evidence, which included thousands of subpoenaed internal company documents that paint a picture of a company willing to inflict mass addiction for profit.

One internal memo proposed to “target high-abuse risk patients (eg males under 40)” as an “opportunity” for higher sales.

“A key element in (Johnson & Johnson’s) opioid marketing strategy to overcome barriers to liberal opioid prescribing was its promotion of the concept that chronic pain was under-treated (creating a problem) and increased opioid prescribing was the solution,” District Judge Thad Balkman wrote.

Balkman wrote of the broad-ranging and deceitful techniques the company used to influence medical practice, including “substantial payments of money to a variety of different pain advocacy groups and organizations that influenced prescribing physicians and other health care professionals.”

The judge ruled that no data backed up many of the claims J&J made, that the company twisted the academic literature to understate addiction risks, and that it ignored warnings from the FDA and its own advisory board about its dishonest marketing practices.

While Oklahoma wanted J&J to help heal communities ravaged by the opioid epidemic for the next 30 years, Balkman’s ruling will only cover one year of recovery funding. Lance Lang, an activist and recovering user of opioids, told Reuters that the decision was “shortsighted” as “there’s going to be people struggling with this for years.”

Attorney General Mike Hunter still views the ruling, considered a bellwether for other cases involving drugmakers and the opioid crisis, as a victory:

“Today is a major victory for the state of Oklahoma, the nation and everyone who has lost a loved one because of an opioid overdose,” Hunter said. “Our evidence convincingly showed that this company did not just lie and mislead, they colluded with other companies en route to the deadliest man-made epidemic our nation has ever seen.”

J&J separates itself from other opioid producers through its involvement in the entire opioid production process. The company owns subsidiaries that run poppy fields and “create, grow, and supply” 60% of the raw materials drug companies used to create opioid painkillers like OxyContin. Expert witness Dr. Andrew Kolodny, Co-Director of Opioid Policy Research at Brandeis University described Johnson & Johnson “as a kingpin in our opioid crisis.”

“Johnson & Johnson executives made the calculated and coldblooded decision that they were going to produce a mutant strain of poppy, corner the market and supply massive amounts of the active ingredients for other companies to manufacture opioids,” said Oklahoma Attorney General Mike Hunter.

Around 2,500 lawsuits in the United States have been brought against drugmakers for their role in the epidemic. Because the Oklahoma ruling was less severe than investors expected, shares for companies facing similar lawsuits, such as Teva Pharmaceutical Industries and Endo International, rose after the decision.

According to the Center for Disease Control, opioids were involved in the overdose deaths of almost 400,000 people between 1999 and 2017. Estimates show hundreds of thousands could die in coming years. And as companies like Johnson & Johnson and Purdue made mass profits by exploiting addiction, the epidemic is estimated to cost $500 billion in economic losses per year, according to a 2017 White House Council of Economic Advisers study.

 

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Peter Castagno

Peter Castagno is a freelance writer with a Master’s degree in International Conflict Resolution. He has traveled throughout the Middle East and Latin America to gain firsthand insight in some of the world’s most troubled areas, and he plans on publishing his first book in 2019.

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