Monday, June 2, 2014

Curiouser and Curiouser

Santa Clara County and Orange County in California have filed a lawsuit against Purdue Pharma, The Purdue Frederick company, Teva Pharmaceuticals, Cephalon, Johnson and Johnson, Janssen Pharmaceuticals, Endo Health Solutions, Activis PLC, and "does 1 through 100, inclusive." The 100 (app.) page lawsuit is an interesting read. The "does" reference suggests that more defendants may be added in time.

According to one characterization, these companies are accused of "opening floodgates to epidemic of addiction."  

The lawsuit contends that the by the 1990s Defendants had the "ability to cheaply produce massive quantities of opium-like painkillers (“opioids”), but the market was small." These "opiods" are described as "well-known brand-name drugs like Oxycontin and Percocet," which the lawsuit likens to heroin in that they "work by binding to receptors on the spinal cord and in the brain, dampening the perception of pain."

Because they allegedly had production capacity that exceeded their market, the defendants allegedly engaged in a "common, sophisticated, and deeply deceptive marketing campaign that continues to the present." The purpose of this campaign alleged in the lawsuit was to "reverse the popular and medical understanding of opiods."  

The suit alleges that the manufacturers knew "that opioids were too addictive and too debilitating for long-term use for chronic non-cancer pain," and yet they "spent millions of dollars funding, assisting and encouraging doctors and front groups that would pioneer a new and far broader market for their potent and highly addictive drugs - the chronic pain market." Through this campaign, the suit alleges that the manufacturers "persuaded doctors and patients that what they had long known - that opiods are addictive drugs and unsafe in most circumstances for long-term use - was untrue, and quite the opposite, that the compassionate treatment of pain required opiods." 

The suit characterizes this marketing campaign as "wildly successful," and describes the United States as "awash in opiods" as a result. The suit alleges that 254 million opiod prescriptions were filled in 2010, "enough to medicate every adult in America around the clock for a month." The suit alleges that Opiods are now "the most prescribed class of drugs" in the country. 

Despite having 4.6% of the world's population, the United States consumes "80% of the opiods supplied around the world and 99% of the global hydrocodone supply." The plaintiff counties allege that this has generated $8 billion in revenue for pharmaceutical companies in 2010.

The lawsuit describes various detrimental effects of this success. Chief among them is the death toll. It alleges that "prescription opiod use contributed to 16,651 overdose deaths in 2010" across the United States. Orange County contends that their own death toll was about 180. 

The plaintiff counties contend that the defendant's actions violated multiple California state laws, and they seek "restitution, civil penalties and attorneys' fees costs and expenses" as well as injunctive relief to "cease their unlawful promotion of opiods, to correct their misrepresentations, and to abate the public nuisance they have created."

There will be debate about whether a company can be sued for their sale and distribution of a produce that is legal under Federal law. Some already question this. Some point specifically at recent litigation in which the makers of Zohydro successfully challenged state attempts to restrict their product's distribution. The argument for such protection from state intervention is called "preemption," where the existence of Federal regulation pursuant to some constitutionally enumerated power preempts the state from otherwise regulating. 

The California case will likely be watched with interest. If the complaint survives defense motions to dismiss and for summary judgement (that is the case is not dismissed by a judge before it can get to a jury), there is some possibility other counties or even municipalities may file similar suits in other state courts. There are 3,141 counties in the country, each filing a similar lawsuit would equate to a significant volume of litigation. 

Is the kind of behavior alleged in the current lawsuit something that a jury or juries would find inappropriate? If the California county's lawsuits are successful, might individuals or individual's estates begin to file lawsuits for damages from use of opiods? Is there any potential that the country could see litigation with similarities to the tobacco litigation that has been seen in recent years?

A jury in 2010 awarded a widow $75 million from four tobacco companies. In August 2013, another verdict awarded $37 million. These findings despite the fact that the subject of the lawsuits, tobacco, was perfectly legal under Federal law. In some of those lawsuits, the plaintiffs allege that tobacco companies engaged in marketing campaigns that were deceptive. 

The Supreme Court has declined the tobacco company's argument that they are entitled to protection from "preemption." Tobacco has faced many state law claims. There are currently some 8,000 estimated tobacco lawsuits pending in Florida alone. 

When the states first sued big tobacco, there were those who said the suits would never work. The tobacco companies settled with the states for a payout that will be at least $200 billion. Will the first two counties in the country prevail in their claims for damages related to opiods? Will their lawsuit lead to a cascade of claims as was seen in tobacco litigation? 

How many jury verdicts would it take to erase an $8 billion annual revenue from opiod sales?  Well, at 16,651 deaths alleged per year, it would only take about $481,000 in damages in each death case to erase all of that revenue (not profit, revenue). Of course this presumes that only the death cases would be pursued, but it is possible that there would be others in the marketplace who would claim damage from their use and or addiction despite not having suffered death. 

If a jury agrees that these companies opened "floodgates to epidemic of addiction," will the California litigation likewise open the floodgates of litigation against the companies that allegedly engaged in the marketing campaign to change perceptions of opioids? Will the physicians who were persuaded by that alleged marketing campaign be swept up in the flood?

Currently we hear attorney ads on the television seeking response by those injured by various medical devices, services, and medications. Will opiods be the next "big thing" in litigation? Time will tell, as the attorneys watch the developments in California. As Lewis Carroll wrote of Alice's trip down the rabbit hole, things just get "curiouser and curiouser."

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