The Rosenthal Report - September 2019

Rosenthal Reports

Nationwide opioid litigation appears to be entering a decisive phase, with one of the main defendants—the opioid maker Purdue Pharma—in settlement talks valued at as much as $12 billion. Purdue is among some two-dozen prescription opioid manufacturers, drug distributors and pharmacy chains being sued by state and local governments in roughly 2,000 lawsuits. The companies are accused of fueling the epidemic that has led to hundreds of thousands of opioid-related overdose deaths during the last two decades. 

While the terms of a Purdue deal remains in flux, it is clear that these companies acted in a vile and immoral way. Any settlement should reflect the magnitude of the misery they have inflicted on families and communities across the country. Equally important, the ultimate outcome of this entire wave of lawsuits will determine how we combat the epidemic over the next decade—and what resources are available to end this public health crisis.

THE Johnson & Johnson case

Momentum in the Purdue lawsuits follows last month’s resolution of an opioid case in Oklahoma against Johnson & Johnson (the only such case to go to trial). The healthcare giant—which was the leading supplier of the chemical ingredient used to make prescription opioid painkillers—was ordered to pay the state $572 million in damages for aggressive marketing tactics similar to those employed by Purdue and others. Separately, out-of-court opioid settlements ranging from $10 million to $270 million have also been reached ahead of a planned October court date in Cleveland for consolidated cases.  

These numbers are important, because a Purdue agreement could pave the way for a master opioid settlement on a scale similar to the 1998 Master Tobacco Agreement, in which cigarette companies agreed to pay $246 billion over 25 years for anti-tobacco initiatives. As such, many of the opioid plaintiffs are already disagreeing over the terms of the proposed settlement and how to divvy up the money they stand to be awarded. 

Money for drug treatment, not repairing potholes

The Johnson & Johnson decision, which the company is appealing, stipulates in vague language that the money should go to “abate the opioid crisis.” With pressure mounting to reach a deal, we must ensure that any agreement includes adequate compensation for the crime. In addition, there must be ironclad guarantees the money is used for addiction treatment—and not siphoned off by cities and states for general operating expenses, which is what happened following the tobacco settlement. 

As the opioid epidemic continues to rage on while other drug crises are escalating, the need for this money only becomes more urgent.   Although 2018 saw a slight decrease in prescription opioid misuse and cases of opioid use disorder, according to the latest findings from the National Survey on Drug Use and Health, an estimated 70,000 Americans died of drug overdose last year, three-fourths of which were opioid-related. The survey also noted troubling increases in methamphetamine use and marijuana-use disorders among young people.

Stumbling blocks to reaching a deal

The price that defendants should pay for their role in flooding America with more than 76 billion opioid painkillers while misleading patients about the addictive nature of the drugs is difficult to calculate. Some state attorneys general say the proposal in its current form falls short (prosecutors in the Johnson & Johnson case, for example, had sought $17 billion for a 30-year anti-opioid effort). Purdue sold $36 billion of OxyContin since introducing the drug in 1996 and the firm’s founding Sackler family has profited handsomely. 

The proposed settlement would see the family cede its ownership stake in Purdue and contribute $3 billion of its own money for damages, which some say is not enough and would leave the Sackler fortune largely intact. Another possible sticking point: the proposed deal is tied to potential profits that Purdue—which would be restructured as a “public beneficiary trust”—continues to earn from selling OxyContin, the prescription painkiller that contributed to the epidemic. Purdue would also donate a number of addiction treatment drugs it is developing but are not yet approved by the Food and Drug Administration.
Whether the other parties chose to fight in court or make a deal is unclear, as is any final estimate of damages. Regardless, we need to establish a national action plan to ensure any settlement windfall—however much that ends up being—isn’t diverted. By significantly expanding a wide range of affordable and accessible drug treatment options, including long-term residential and medication-assisted treatment, we can help all those struggling with substance abuse and begin to close this tragic chapter of our history. 

4th September 2019
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