J&J’s $527 million dollar fine in opioid case doesn’t bode well for Purdue Pharma

The high cost of questionable profits.
The high cost of questionable profits.
Image: Reuters/George Frey
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A case about the role of pharma company Johnson & Johnson in the Oklahoma opioid crisis may have just swayed the outcome of thousands of similar cases involving other drugmakers, including Purdue Pharma, the maker of OxyContin.

On Aug. 26, an Oklahoma state court judge fined Johnson & Johnson $527 million for the mass addiction and death that resulted from its misleading opioid marketing scheme. The ruling is based on an Oklahoma public nuisance law. Yet legal experts tell Quartz that the outcome—which the company is appealing—has serious implications for the many pending state and federal litigations that opioid manufacturers face.

Among more than 2,000 pending opioid-related lawsuits around the country, two bellwether federal cases against drugmakers are currently set for trial in Ohio. Dan Polster, the judge presiding over many of the consolidated opioid cases, has reportedly been pushing all parties to settle. And on Aug. 27, NBC News reported that Purdue Pharma, whose early knowledge of its product’s addictive properties has been widely reported, is considering a multi-billion dollar settlement to close thousands of pending cases.

Lawyers believe drug companies may be more inclined to settle now than they were even a week ago—and that the Oklahoma decision is a strong impetus, if not the sole reason, for that shift.

“I think the pressure is mounting,” says Regina LaBelle, program director of the Georgetown University Law Center’s Addiction and Public Policy Initiative at the O’Neill Institute for National and Global Health Law. She believes that the Oklahoma decision, coupled with the looming trial dates, which “focus the mind,” are forcing companies to rethink litigating the cases.

The Oklahoma decision is premised on that state’s specific public nuisance statute, and a North Dakota judge recently denied a similar claim in that state. But the underlying issues in the various pending state and federal litigations are the same: Did the drug companies deliberately misrepresent the benefits of their opioid products and over-promote them, leading to mass addiction and a public health crisis?

Anthony Gentile, a founding partner at the litigation firm Godosky and Gentile in New York, says there’s no doubt that the Oklahoma decision is impacting defendants in upcoming litigations—and it should. “The Oklahoma case is a seminal decision,” he says. “It goes to the heart of the claim that companies had a strategy to promote dangerous drugs.”

In 1999, Gentile notes, when the makers of the diet drug fen-phen were ordered by a jury to pay more than $23 million in damages, the drugmaker quickly settled the remaining cases for $4.8 billion.

Even though the specific statutes differ between Oklahoma, Ohio, and other cases, Gentile believes the judge in Oklahoma has nonetheless dealt a serious blow to drug companies. “His decision has a significant impact on the negotiation position of drug companies,” Gentile says. Because causation has already been proven in one case, there’s now a roadmap to prove other drug companies’ promotional efforts caused an epidemic—even if the defendants will seek to distinguish the cases from the Oklahoma precedent.

The attorney notes that in the 42-page opinion, which was written after an extensive presentation of evidence over a six-week trial, the judge found as a matter of fact that Johnson & Johnson grossly misrepresented the benefits and dangers of its opioids, creating an epidemic in Oklahoma. “That’s a finding of fact made by a judge, not a jury,” Gentile points out, making the conclusion more difficult to dismiss.

From a legal perspective, Georgetown’s LaBelle says, the Oklahoma litigation doesn’t necessarily indicate how future cases will play out. But from the vantage point of the public, Johnson & Johnson’s insistence on going to trial in Oklahoma—Purdue chose to settle for $270 million in its Oklahoma case, while defendant Teva Pharmaceuticals settled for $85 million—did put other defendants in an awkward position.

Witness testimony in Oklahoma, LaBelle notes, was damaging to drug companies because it revealed aggressive marketing tactics that put profits above patients. She imagines it will be worse in the federal cases, which will likely draw much more attention and national press coverage, making it clear to the public that drug companies relentlessly peddled their pain pills through doctors, claiming they were less addictive than alternatives, all while knowing patients were getting hooked on the drugs. “The testimony at trial could be very embarrassing for the companies, and the Ohio trials could be much higher visibility. The behavior being discussed in these cases is egregious,” LaBelle notes.

Even if Purdue Pharma settles its Ohio case, that doesn’t mean all the companies have to or will choose the same. “If Purdue settles, the rest have to make a calculation based on their financial position…But if I was an opioid manufacturer, I’d be very serious about settlement now,” Gentile says.

Meanwhile, LaBelle points out that no matter what the outcome of the cases, Americans will still have to deal with the public health implications of the opioid crisis. Punitive damages against drugmakers are a necessary step—companies should be held responsible for fueling an addiction crisis—but fines aren’t going to solve the problem still facing communities around the country.

“We need to develop a substance use disorder treatment system,” LaBelle says. “We need to build a treatment approach nationwide and we need to think about how much it will cost and how to do it.”