J&J Ordered to Pay $572 Million in Landmark Opioid Case

Norman, OK (WorkersCompensation.com) – For the first time since the opioid epidemic began, a U.S. drugmaker is being held responsible. District Judge Thad Balkman ordered Johnson & Johnson and its subsidiary Janssen Pharmaceuticals to pay $572 million to the state of Oklahoma. The company said it will appeal the decision.

The judge said J&J engaged in “misleading marketing and promotion of opioids” that “created a nuisance as defined by the law.” “Specifically, defendants caused an opioid crisis that’s evidenced by increased rates of addiction, overdose deaths and neonatal abstinence syndrome.”

The ruling comes less than two months before a scheduled trial in Ohio involving some 1,900 cases that were consolidated. J&J, Purdue Pharma and other opioid manufacturers are being sued in that case.  

Workers’ compensation experts are weighing the specifics of the decision and what it could mean going forward.

“There will be much legal opining on the merits of the judge’s ruling, but there’s no doubt it has sent shockwaves through the opioid industry,” said Joe Paduda, principal of health Strategy Associates and author of the Managed Care Matters blog.

The Case

The suit against J&J was brought by Oklahoma Attorney General Mike Hunter, who called the decision a major victory. The suit initially also included Purdue Pharma, maker of OxyContin and Teva Pharmaceutical, both of which settled before the trail began.  

“It’s obvious that Oklahoma is not just at the geographic center of the U.S. but also the metaphorical center of accountability for the opioid epidemic,” said Mark Pew, SVP, Product Development & Marketing for Preferred medical. “They were the first state to reach settlements with Big Opioid Pharma - $270M in March with Purdue Pharma, $85M in May with Teva Pharmaceuticals. J&J took a chance with not settling and lost.”

During the 7-week non-jury trial, lawyers for the state argued that J&J embarked on a marketing campaign that minimized the addictive risks of the painkillers. But the company disputed that.

Oklahoma’s counsel for J&J, John Sparks was quoted as saying the state failed to identify a single doctor who was misled and did not prove Janssen “misleadingly marketed opioids or caused any harm in Oklahoma.”

In a written statement after the ruling was issued, the company said the “judgment disregards the company's compliance with federal and state laws, the unique role its medicines play in the lives of the people who need them, its responsible marketing practices and that since launch, Duragesic, Nucynta and Nucynta ER (extended release) have accounted for less than 1% of total opioid prescriptions in Oklahoma as well as the United States."

But workers’ compensation thought leaders balked at that idea. “At the core, the defendants don’t seem to understand public opinion, and the legal system, will not let them hide behind claims that just because their drugs were legal, doesn’t mean the defendants aren’t liable for the devastation they have caused,” Paduda said.

The Money,  Stocks

The $572 million covers one year of costs for Oklahoma to address the opioid crisis, even though the state said it would take decades to fully execute the plan. The state had sought $17 billion.

But the judge limited the amount, saying “the state did not present sufficient evidence of the amount of time and costs necessary, beyond year one, to abate the opioid crisis.”

The ‘low’ figure was seen as cause for celebration by investors who pushed J&J’s stock price up by 3.4 percent in after-hours trading. Shares of other drugmakers, including Mallinckrodt, Teva Pharmaceutical and Endo International also rose following the decision.

“In a strange way, this award might have just been paid for by Wall Street and might not end up being much of a net loss,” Pew said.

Nevertheless, workers’ compensation experts say the money will be put to good use. “It will provide more education,” said Albert Randall, president of Franklin & Prokopik, P.C.. There are “all types of areas that could benefit; from prosecutors and counselors, to education and victim resource assistance. There’s a lot of good this money can do.

“I think it will, not only from this instance, but the fear of similar suits will cause big pharma to reconsider not only its marketing, which was attacked viciously in the opinion, but they’ll be forced to provide greater resources and assistance then has been done in the past,” Randall added.

Randall cautioned, however that the decision could make prosecuting so-called pill mills and physicians who overprescribe opioids more difficult. “After reading the opinion, it makes me believe those pill mills are going to be relying on this type of opinion as a defense,” he said. “They’ll potentially say, ‘look what this judge says.’ They’re saying that J&J basically misinformed them. That their education from the sales reps, paid speakers, literature – all were misinforming the doctors and other prescribers and perhaps they were simply misinformed when they were engaging  in these practices.”

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