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Drug companies to face first opioid trial following pandemic delays

Stock MarketsApr 16, 2021 01:15PM ET
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2/2 © Reuters. FILE PHOTO: A Teva Pharmaceutical Industries building is seen in Jerusalem 2/2

By Nate Raymond and Brendan Pierson

(Reuters) - Four drugmakers, including Johnson & Johnson (NYSE:JNJ) and Teva Pharmaceutical Industries (NYSE:TEVA) Ltd, will go to trial on Monday over claims they helped fuel an opioid crisis that has resulted in nearly 500,000 overdose deaths in the United States.

The trial is one of several looking to hold companies accountable for the overdose and abuse crisis that are set to take place this year after the coronavirus pandemic delayed litigation, putting renewed pressure on them to enter into multi-billion dollar settlements.

J&J, Teva Pharmaceutical Industries Ltd, Endo International (NASDAQ:ENDP) PLC and Abbvie's Allergan (NYSE:AGN) unit are accused by several California counties of deceptively marketing painkillers in ways that downplayed their addictive risks to boost sales.

If the companies are held liable by Orange County Superior Court Judge Peter Wilson following a trial conducted virtually, the counties say they should have to pay $50 billion to help foot the costs of abating the public nuisance they created plus penalties.

Opioids have resulted in the overdose deaths of nearly 500,000 people from 1999 to 2019 in the United States, according to U.S. Centers for Disease Control and Prevention.

"We need these companies to fund what it takes to try to undo the harms that they have caused, and the scope and scale of that is enormous," Santa Clara County Counsel James Williams (NYSE:WMB) said in an interview.

His county is suing the companies along with Los Angeles and Orange counties and the city of Oakland.

The drugmakers deny wrongdoing, arguing they acted appropriately in marketing medications approved by the U.S. Food and Drug Administration, and that the counties cannot prove their promotion of opioids caused the crisis.

J&J in a statement called its marketing of the drugs "appropriate and responsible," Israel-based Teva said it will defend itself against these "unproven allegations." Endo and Allergan declined to comment.

More than 3,400 lawsuits brought largely by states and local governments are pending against companies accused of fueling the opioid epidemic.

The state of Oklahoma in 2019 won a $465 million judgment against J&J in only such trial so far. Opioid cases that were set to go to trial in 2020 were put off as a massive new public health crisis made gathering jurors and lawyers in the same room untenable.

'DAY OF RECKONING'

Some plaintiffs' lawyers said the delays benefited the companies at the cost of states, counties and municipalities who say they need settlements to help pay for the costs of addressing a painkiller addiction epidemic that only grew worse during the coronavirus pandemic.

The nation's three largest drug distributors - McKesson Corp (NYSE:MCK), AmerisourceBergen (NYSE:ABC) Corp and Cardinal Health Inc (NYSE:CAH) - and J&J have proposed paying a combined $26 billion to resolve the cases against them.

The proposal, a version of which was first put forward in 2019, has yet to be finalized, and some plaintiffs lawyers say that only with trials will they and other companies come to the table to finalize payouts.

"They keep putting off the day of judgment," Elizabeth Chamblee Burch, a law professor at University of Georgia, said of the companies. "You really need trials to create that moment of pressure."

Next month, a closely-watched case is set to go to trial in West Virginia accusing the three drug distributors of ignoring red flags indicating the highly addictive painkillers were being diverted for improper uses. They deny the allegations.

That case will be followed in June by a jury trial in New York against several drugmakers and distributors, which was delayed on the eve of trial in March 2020 because of the pandemic.

"The day of reckoning is coming," said Hunter Shkolnik, a lawyer at Napoli Shkolnik who is representing New York's Nassau County. "They've been able to slow roll because there was no trial like looming over their heads. Now they have a trial."

Drug companies to face first opioid trial following pandemic delays
 

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