Opioid Liability: The Pitfalls and Potential Gains of Settling
In March 2019, Purdue Pharma reached a $270 million settlement with the State of Oklahoma, amid claims that the pharmaceutical conglomerate knowingly exacerbated the opioid crisis by overinflating the number, magnitude, and duration of opiate prescriptions in pursuit of profit. With fifteen hundred open litigations against Purdue Pharma, including forty-five cases brought by state prosecutors, the case provided critical insight into the strategies adopted by both the state and Purdue. In State of Oklahoma v. Purdue Pharma L.P., the state alleged that Purdue Pharma, “took affirmative steps to overstate the efficacy of their opioid pain medications for a wide range of medical conditions, while at the same time falsely downplaying the risk of addiction to those medications.” [1] More specifically, the prosecution claimed that Purdue was guilty of Public Nuisance, Fraud (Actual and Constructive) and Deceit, and Unjust Enrichment, in addition to violation of the Oklahoma Consumer Protection Act and several statutes of state Medicaid legislation. In conjunction, these charges sought to convict Purdue and several peer corporations of deliberately exacerbating the opiate crisis.
Prior to settlement, prosecutors in ongoing trials against Purdue Pharma presented evidence that the pharmaceutical kingpin “rewarded high-prescribing doctors with coffee, ice cream, catered lunches, and cash,” and published a “Purdue-sponsored book, Responsible Opioid Prescribing, which again suggested that patients who appear to be addicted were instead ‘receiving an inadequate dose’ and needed more drugs,” in conjunction with other Purdue Pharma programs aimed to increase opiate sales. [2] Prosecutors additionally provided extensive opioid manufacture and distribution records, which indicated an astronomical rise in opiate prescription quantities, particularly for the Purdue patented schedule II analgesic OxyContin. Purdue sought exoneration on the grounds that the manufacturer could not be held accountable for drug use, asserting that the link between the company’s actions and opiate abuse was inconclusive. Despite the broad statute of limitations on public nuisance, Purdue had managed to successfully evade conviction in certain cases, including State of North Dakota v. Purdue Pharma, L.P., wherein Judge Hill wrote “the connection between the alleged misconduct and the prescription depends on multiple, independent intervening events and actors.” [3] This uncertainty compounded incentives for settlement in the State of Oklahoma v. Purdue Pharma L.P. case. Facing failure to convict, plaintiffs opted for the stability of guaranteed terms, while the settlement allowed Purdue to elude conviction and avert a possible multi-billion dollar fine and the detrimental publicity of a televised trial.
In addition to the $270 million payment, the settlement that emerged defined injunctive terms by which Purdue Pharma must abide. Purdue was barred from promoting opioids in the State of Oklahoma via sales representatives, speakers, or financial support until the end of 2026, either by itself or through a third party. Purdue was also mandated to provide “reasonable assistance to law enforcement [in] investigations of potential diversion and/or suspicious circumstances involving Purdue Opioids.” [4] Oklahoma attorney general Mike Hunter, representing the prosecution, expressed his confidence in the terms of the settlement, noting that the suit was not a criminal proceeding but “a civil action intended to redress the damages that … the state and the people of the state have suffered.” [5] Despite prior claims that opioid-related damages approached billions of dollars, Hunter cited bankruptcy concerns and the demand for a rapid resolution. [5][6]
The settlement, however, leaves much to be desired. Plaintiff attorneys draw comparisons between the opioid cases and the tobacco suits that took place in the mid 1990s, which similarly concerned public health threat obfuscation. Prosecutors in these cases accused major tobacco corporations of misconstruing the health threats of tobacco to inflate tobacco use, adopting arguments which strikingly resemble those pushed by prosecutors in the recent opiate cases. Even beyond this overlap in content, the recent opiate cases hark back to the tobacco suits of decades before in scope: the two groups of suits both involve multi-state litigations brought against numerous multi-billion dollar conglomerates.
Despite this resemblance however, the Purdue settlement falls far short of the Master Settlement Agreement (MSA) which ultimately concluded the tobacco cases. From a pure monetary perspective, the MSA included $246 billion of fines, which contextually dwarfs the fines Purdue faces from the state of Oklahoma. [7] In addition, the MSA clearly defined extensive future regulations, restructurings, and guidelines to which the defendants must adhere. [7] The MSA banned specifics from free youth tobacco samples to agreements inhibiting anti-tobacco advertising, while explicitly establishing limitations on lobbying and marketing. The MSA moreover actively attempted to remedy public health damages, creating organizations like the The American Legacy Foundation (now known as the Truth Initiative) and its “The Truth” advertising campaign publicizing the fatal risks of tobacco use. [8] The Purdue settlement is far less austere in both monetary and injunctive terms, without any requirements to actively engage in preventative measures. Purdue was nonetheless comprehensively released from all claims brought forth by the Oklahoma litigation, sealing off the possibility of further injunctive actions or fines as a result of the suit in question. The settlement extensively acquits Purdue of any guilt in the Oklahoma state case.
The proceedings in the State of Oklahoma v. Purdue Pharma L.P. case will have dramatic ramifications on the remaining opiate cases. Following the Purdue settlement, for example, Teva pharmaceuticals exited the same suit on a $85 million settlement, similarly accepting no wrongdoing in the claims brought by the attorney general. Attorneys representing Johnson & Johnson, another firm implicated in the same Oklahoma suit, are expected to point to the number of intervening agents between manufacturer and abuse, harking back to the argument adopted by Purdue. As a whole, the State of Oklahoma v. Purdue Pharma L.P. is pivotal in the treatment of the thousands of ongoing opioid cases. According to Richard Ausness, a law professor at the University of Kentucky, “[the Purdue] case will set a precedent” - one that could pivotally decide the feasibility of a final settlement akin to the MSA. [5] With looming settlements on the horizon, it is essential to reconsider the terms and fines included in the Oklahoma settlement.
[1] Oklahoma v. Purdue Pharma L.P., ___ Okla. ___ (2017). https://s3.amazonaws.com/content.newsok.com/documents/1037086440-20170630-122306-.pdf
[2] Massachusetts v. Purdue Pharma L.P., __ Mass. ___ (2018). https://int.nyt.com/data/documenthelper/569-purdue-pharma-documents/abbd666f51f9fae8bd7a/optimized/full.pdf#page=1
[3] Frankel, Allison. “Purdue finally gets a judge to toss state AG’s opiods case. Does it matter?” Reuters. May 16, 2019. https://www.reuters.com/article/otc-purdue-frankel/purdue-finally-gets-a-judge-to-toss-state-ags-opioids-case-does-it-matter-idUSKCN1SM2LD
[4] Oklahoma v. Purdue Pharma L.P., ___ Okla. ___ (2019). https://www.documentcloud.org/documents/5781735-Purdue-Pharma-s-settlement-in-Oklahoma-s-opioid.html
[5] Fortier, Jackie. “1st Major Opiod Trial Opens in Oklahoma.” NPR. May 27, 2019. https://www.npr.org/2019/05/27/724093091/this-case-will-set-a-precedent-first-major-opioid-trial-to-begin-in-oklahoma
[6] Hoffman, Jan. “First Opiod Trial Takes Aim at Johnson & Johnson.” New York Times. May 26, 2019. https://www.nytimes.com/2019/05/26/health/opioid-trial-oklahoma-johnsonandjohnson.html
[7] “Master Settlement Agreement.” Public Health Law Center. n.d. https://publichealthlawcenter.org/sites/default/files/resources/master-settlement-agreement.pdf
[8] “Master Settlement Agreement: An Overview.” Public Health Law Center. n.d. https://publichealthlawcenter.org/sites/default/files/resources/MSA-Overview-2018.pdf