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Johnson & Johnson to Pay $572 Million in Opioid Crisis Lawsuit

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This week, a judge in Oklahoma ordered pharmaceutical company Johnson & Johnson to pay $572 million for its role in the opioid crisis that has ravaged the country and killed more than 6,000 people in Oklahoma alone. The ruling is the first to hold a drug manufacturer responsible for the crisis, which was fueled by companies flooding the market with addictive painkillers and pushing doctors to overprescribe the drugs. The amount is far less than the $17.5 billion that the state’s attorney general sought, and the company says it plans to appeal the ruling.

Cleveland County District Judge Thad Balkman ruled that the state met its burden in arguing that the company created a “temporary public nuisance” by using “misleading marketing and promotion of opioids,” and added in his ruling that “those actions annoyed, injured or endangered the comfort, repose, health or safety of Oklahomans.”

Judge Balkman cited Johnson & Johnson’s deceptive and aggressive marketing of painkillers to doctors, and the company’s practice of discouraging its sales representatives from discussing addiction or other negative consequences of using the drugs, while encouraging their prescription for both moderate and severe pain. The company also sought to convince doctors that they were under-prescribing pain medications and that having patients ask for higher doses was not a sign of addiction, just indicative of needing more to address their pain.

Johnson & Johnson markets the painkillers Duragesic (fentanyl) and Nucynta, both of which contain opioids. The company has also long manufactured the raw ingredients for other companies’ opioid-based painkillers, having bought a company in Tasmania in the 1980s that grows poppies and processed opium. According to the New York Times, by the height of the opioid epidemic, the company had become “the leading supplier for the ingredients in painkillers in the United States,” having developed a specific strain of poppy that provided the basis for Purdue’s Oxycontin, as well as manufacturing and supplying ingredients for “a range of other drugs, including hydrocodone, morphine, codeine and buprenorphine.”

Michael Ullmann, Johnson & Johnson’s general counsel, released a statement calling the judgement “a misapplication of public nuisance law that has already been rejected by judges in other states.” He also noted, “The unprecedented award for the state’s ‘abatement plan’ has sweeping ramifications for many industries and bears no relation to the company’s medicine or conduct.”

The amount decided for damages may actually seem low—$572 million will reportedly only fund a single year of Oklahoma’s opioid recovery plan, which the state estimates will cost $12.7 billion to $17.5 billion over 20 to 30 years. The company’s stock even rose this week, which some attribute to relief over the relatively low damages.

However, many are cheering the Oklahoma ruling as other lawsuits near their court dates. This includes a massive federal lawsuit scheduled for October in Cleveland, Ohio, that brings together more than 2,000 separate cases. Judge Balkman’s decision that the company’s activities constituted a public nuisance opens the door for similar rulings in other state cases, and an additional legal avenue for holding companies responsible for their part in the epidemic.

Also this week, Oxycontin manufacturer Purdue Pharma pledged to pay $10 billion to $12 billion to settle thousands opioid-related claims, according to NBC News. Purdue had been part of the Oklahoma suit, but to avoid the lawsuit, Purdue agreed in March to pay a $270 million settlement to establish an addiction treatment and research center at Oklahoma State University, and provide continued funding over five years. Purdue’s owners the Sackler family also agreed to pay $75 million to the center for five years. In May, Israel-based Teva Pharmaceuticals also settled with Oklahoma for $85 million, which will further fund the state’s effort to combat opioid addiction.

Workforce Drug Positivity Rate Still Peaking

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Workforce use of illicit drugs across the board—including cocaine, marijuana and methamphetamine—remains at its highest rate in a decade, a new study by Quest Diagnostics found.

Overall positivity in urine drug testing among the combined U.S. workforce in 2017 continued to hold at 4.2%, which is still 0.7% higher than the positivity rate from 2012, which represented a 30-year low. The findings were made from analysis of more than 10 million workforce drug test results.

“It’s unfortunate that we mark 30 years of the Drug-Free Workplace Act with clear evidence that drugs continue to invade the country’s workplaces. Not only have declines appeared to have bottomed out, but also in some drug classes and areas of the country drug positivity rates are increasing,” Barry Sample, senior director of science and technology at Quest Diagnostics, said in a statement.

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“These changing patterns and geographical variations may challenge the ability of employers to anticipate the ‘drug of choice’ for their workforce or where to best focus their drug prevention efforts to ensure a safe and healthy work environment.”

The new data indicates shifting patterns of drug use, with cocaine and amphetamines positivity surging in some areas of the country and marijuana positivity rising sharply in states with newer recreational use statutes.

Opioids
The one bit of good news is that prescription opiate positivity rates declined dramatically on a national basis. Quest reported that the positivity rate for opiates in the general U.S. workforce in urine drug testing declined 17% between 2016 and 2017 (0.47% versus 0.39%). More notably, oxycodones (oxycodone and/or oxymorphone) positivity declined 12% between 2016 and 2017 (0.69% vs. 0.61%), hydrocodone positivity declined 17% (0.81% vs. 0.67%); and hydromorphone positivity declined 22% (0.59% vs. 0.46%). Opiates other than codeine were at their lowest positivity rate in more than a decade.

This data is supported by the Centers for Disease Control and Prevention (CDC), which shows that the overall national opioid prescribing rate in 2017 fell to the lowest it had been in more than 10 years, although rates vary by state and are high in some areas of the country.

The topic was explored during an educational session at RIMS 2018, where it was noted that the decrease in opioid use may be attributed to corporate initiatives like prescription drug monitoring policies (PDMP), which can limit employees’ ability to refill scripts, in addition to states that had comprehensive reforms.

“This shows that the more queries there are, the bigger the drop in opioid prescribing,” said John Ruser, president and CEO of the Workers Compensation Research Institute (WCRI), last month in San Antonio. He said WCRI used Kentucky as an example of a successful PDMP. Kentucky’s HB1 law mandated the use of the PDMP and between 2011 and 2013, WCRI information indicated a 10% decline in prescriptions in the state, whereas prescription levels were flat in others that did not have similar reforms.

Methamphetamine
Methamphetamine positivity, however, is increasing. An analysis of trends in the general U.S. workforce based on the four U.S. Census regions identified large increases of methamphetamine positivity rates. Between 2013 and 2017, methamphetamine positivity increased: 167% in the East North Central division of the Midwest (Illinois, Indiana, Michigan, Ohio, Wisconsin); 160% in the East South Central division of the South (Alabama, Kentucky, Mississippi, Tennessee); 150% in the Middle Atlantic division of the Northeast (New Jersey, New York, Pennsylvania); and 140% in the South Atlantic division of the South (Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia). The percentage increase in these four divisions ranged between 9% and 25% between 2016 and 2017.

Marijuana
Overall, marijuana positivity continued its five-year upward climb for both the general U.S. workforce and the federally-mandated, safety-sensitive workforce. Marijuana positivity increased 4% in the general U.S. workforce (2.5% in 2016 versus 2.6% in 2017) and nearly 8% in the safety-sensitive workforce (0.78% versus 0.84%).

Increases in positivity rates for marijuana were most striking in states that have enacted recreational use statues since 2016. Those states include: Nevada (43%), Massachusetts (14%) and California (11%). These three states also saw significant increases in marijuana positivity in federally-mandated, safety-sensitive workers: Nevada (39%), California (20%), and Massachusetts (11%). Federally-mandated, safety-sensitive workers include pilots, rail, bus and truck drivers, and workers in nuclear power plants, for whom routine drug testing is required by the Department of Transportation.

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“These increases are similar to the increases we observed after recreational marijuana use statues were passed in Washington and Colorado,” Sample said. “While it is too early to tell if this is a trend, our data suggest that the recreational use of marijuana is spilling into the workforce, including among individuals most responsible for keeping our communities safe.”

Prescription Opioid Risks to the Workplace Explored at RIMS 2018

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SAN ANTONIO – When the White House declared opioid use a national Public Health Emergency under federal law in 2017, businesses began reviewing their policies and making efforts to curb their employees’ abuse of the drug in its prescribed form. This escalating risk to organizations is why the business impact of prescription opioid use was such a hot topic at RIMS 2018, where a session on April 17 focused on the practical and bottom-line costs of workforce use of prescription opioids. In a session the next day, attendees learned how liability policies are responding to government-led lawsuits against opioid manufacturers, and how to prepare for similar suits brought against other industries.

New Insights into the Impact of Opioid Prescribing to Injured Workers
Data displayed on Tuesday explored opioid-related correlations between worker, industry and employer. Presenters John Ruser, president and CEO of the Workers Compensation Research Institute (WCRI) and Michael Fenlon, senior director of corporate risk management for United Parcel Service (UPS) discussed opioid-related claims and suggested evidence-based information that can encourage a return to work without the prescriptions.

The effectiveness of prescription drug monitoring policies (PDMP) was explored, and Ruser explained that a reactive shift among prescribers has meant that states obligated to adhere to these policies have fewer prescriptions written.

“This shows that the more queries there are, the bigger the drop in opioid prescribing,” he said, using Kentucky as an example of a successful PDMP. He added that Kentucky’s HB1 law mandated the use of the PDMP and has set a standard among states since it was enacted in July 2012. Between 2011 and 2013, WCRI information indicated a 10% decline in prescriptions in the state, whereas prescription levels were flat in others that did not have comprehensive opioid reforms.

Fenlon said that when he learned in recent years that opioid overdoses—almost half of which arise from prescriptions—surpassed car accidents as the number one cause of accidental death, he realized the severity of the issue and its impact on the UPS workforce.

“Once someone gets to that third or fourth script, you can see how it leads to a vicious cycle,” he said. “We need to take ownership of this—in the workers comp space as well as the healthcare side.”

He noted that UPS’ overall pharmacy spend is about 7% of its total medical costs per year for lost-time (LT) patients, with opioids comprising about 22% of that amount. UPS employs more than 454,000 workers, and Fenlon said the company continually pays close attention to the LT patients who are the higher-risk group, with three or more scripts. He added that the collaboration of drug formularies, third-party administrators and UPS case supervisors has contributed to the 44% decrease of the higher-risk group between 2013 and 2017.

Both presenters conceded, however, that injured workers will likely get the medication they need, even if it is not in the form of opioids. “Those who are worried about pain management are noticing the trend in the decline of opioid prescriptions in some areas and ask: ‘What’s the alternative?’” Ruser said. “While there was a drop in that drug, there was an increase in the amount of NSAIDs [nonsteroidal anti-inflammatory drugs]. Clearly, that’s what these prescribers are shifting to, so it’s not that these injured workers are not receiving pain meds.”

Members may access this PowerPoint presentation by logging in at the RIMS 2018 session handout page.

Opioid Lawsuits: A Tsunami of Litigation and Associated Coverage Issues
The topic shifted from boardrooms to courtrooms the next day, as current and pending multidistrict litigations filed by various governments (local, city and state) were examined. Covington & Burling LLP Partner Anna Engh and Marsh Managing Director John Denton (pictured below) discussed insurance policies’ responses to lawsuits and provided insight as to how to prepare should similar suits be brought against other industries.
Manufacturers, distributors, retailers, prescription benefit managers, doctors and clinics are all seemingly in the crosshairs of local municipalities and governmental entities, Engh noted.

“The main focus against the manufacturers is of alleged misrepresentation of the addictive nature of opioids. With respect to the distributors, it is the failure to report and detect suspicious orders, or failing to have controls in place for their diversions,” Engh said. “You’ll see negligence pled in different ways, like common-law negligence, and also pled as violations of states’ controlled substance acts.” She added that public nuisance and RICO claims (Racketeer Influenced and Corrupt Organizations Act) also appear on the dockets.

With nearly 500 claims against pharmaceutical companies, distributors and pharmacies consolidated in Ohio alone, Denton said that the volume of work involved is daunting for insurance, risk and legal professionals.

“That’s thousands of pages of pleadings coming in every month. It’s a very difficult burden,” he said. “I think a lot of companies are tendering them to as many policies as possible. Hopefully, a lot of insurance carriers will be understanding of this. And a lot of this will be sorted out later, either through discussions with the carriers or litigation.”

Denton added that because there is no federal judicial precedent on insurance suits, the progress on such matters will continue to be slow.

“Insurance coverage issues are typically an issue of state law. And with lawsuits in nearly every state, it would be nice to have a [United States] Supreme Court decision on some of these coverage issues, and that would bind everybody,” he said. “But the reality is that’s not going to happen. There will be decisions in multiple states so it may take some time before these issues get sorted out.”