Pharma Companies Band Together in Opioid Crisis
As big pharma faces a mountain of opioid lawsuits, one novel solution is to join Purdue Pharma’s bankruptcy proceedings.
Just two weeks after the famed Sackler family’s Purdue Pharma filed bankruptcy, pharmaceutical giant Johnson & Johnson reached a $20.4 million settlement the day before a federal trial was to determine ultimate responsibility for the American opioid epidemic. Three other companies – Endo, Allergan and Mallinckrodt – reached a $45 million settlement to avoid the same trial.
The settlements mean that the companies have no admission of liability and the plaintiff cannot file future opioid claims. Johnson & Johnson and the other companies have one problem: the $20 and $45 million settlements only covered two counties in Ohio. Janssen Pharmaceuticals, a subsidiary of J&J, manufactured two opioids that were widely distributed in the two Ohio counties (Cuyahoga and Summit).
However, all drugmakers are now facing voluminous litigation, so much so that these companies are determining a pathway to perhaps participate in Purdue Pharma’s bankruptcy, according to a report by the Wall Street Journal.
In all, drugmakers are accused of fueling the opioid epidemic and face 2,500 separate lawsuits in nearly every state. Native American tribes are also trying to recoup the money they’ve spent on treating drug addiction. The above Ohio federal trial was largely slated to be the litmus test for the other 2,499 lawsuits still remaining. A very highly anticipated trial slated for early 2020 involves Huntington, West Virginia, and surrounding Cabell County, which has the nation’s highest opioid overdose death rate.
Drug companies are undoubtedly skittish about the upcoming court trials. J&J was ordered to pay $572 million by an Oklahoma judge in August, with the judge saying that money only covered one year of damage and that more fines would likely be assessed for later years. The Oklahoma trial was the first of many trials designed to determine whether drug manufacturers had any responsibility for opioids; J&J has naturally denied any wrongdoing and has appealed the Oklahoma case.
If big pharma decides to join the Purdue bankruptcy, it would put an end to the “one of the largest and most complex pieces of litigation the U.S. has ever seen.”
Possible Global Drug Settlement
Five drugmakers, including J&J, Teva, Allergan, Endo and Mallinckrodt are considering a global settlement that would be handled through Purdue’s Chapter 11 bankruptcy case; the companies would make contributions to a trust and in return obtain a complete release from future liability. Interestingly, the three largest drug distributors – Cardinal Health, Amerisource Bergen and McKesson Corp. are remaining defendants, as is Walgreen’s.
The idea is still in its infancy according to the Wall Street Journal report, and has not been solidified by any means. Purdue has not accepted the idea, nor have the attorneys representing all plaintiffs. Purdue is still dealing with fierce pushback from about 25 states like Massachusetts and New York that say their proposed bankruptcy deal of $12 billion is simply not enough.
One U.S. district court judge oversees the 2,500 lawsuits and has urged both sides to seek settlements, which is not unprecedented. Other companies have used this type of bankruptcy bundling to settle liabilities, most notably the large litigation that surrounded defective automobile airbags.