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 The state's attorney general had filed the lawsuit, seeking $17
billion to address the impact of the drug crisis on Oklahoma. It had
been considered a bellwether for other litigation nationwide over
the opioid epidemic.
"The expectation was this was going to be a $1.5 billion to $2
billion fine," said Jared Holz, healthcare strategist for Jefferies
& Co. "$572 million is a much lower number than had been feared."
J&J said it would appeal the decision.
Shares of J&J were up 2% in extended trading following the decision,
after an initial gain of more than 5%. Other drugmakers that sell
opioid painkillers and are defending against similar lawsuits also
rose after-hours, including Teva Pharmaceutical Industries Ltd <TEVA.TA>
up 2.6%, and Endo International Plc <ENDP.O>, up 1.4% higher.
Opioids were involved in almost 400,000 overdose deaths from 1999 to
2017, according to the U.S. Centers for Disease Control and
Prevention. Since 2000, some 6,000 Oklahomans have died from opioid
overdoses, according to the state's lawyers.
Roughly 2,500 lawsuits have been brought by states, counties and
municipalities nationally seeking to hold drugmakers responsible for
opioid abuse nationwide. Oklahoma's case was the first to go to
trial. Some drugmakers have chosen to settle cases.
In holding J&J liable after a seven-week, non-jury trial, Judge Thad
Balkman of Cleveland County District Court in Norman, Oklahoma, said
the state proved that J&J's misleading marketing and promotion of
its Duragesic and Nucynta painkillers created a public nuisance.
"The opioid crisis is an imminent danger and menace to Oklahomans,"
Balkman said.
Oklahoma wanted J&J to help it address the epidemic for the next 30
years by funding addiction treatment and prevention programs.
Balkman said in his written ruling that the award covered only one
year of addressing the crisis because Oklahoma did not demonstrate
the time and costs needed beyond that.
Lance Lang, a 36-year-old recovering user of opioids turned activist
in Oklahoma City, said it was “short sighted” for the judge to have
only ordered funding for a year. “There’s going to be people
struggling with this for years,” he said in an interview.
J&J said it will ask that the award be put on hold during an appeal
process that could stretch into 2021. The company also said Oklahoma
failed to show that its products and activities had created a public
nuisance.
"You can't sue your way out of the opioid abuse crisis," Sabrina
Strong, a lawyer for J&J, said at a news conference after the
verdict. "Everyone must come together to address this. But J&J did
not cause the opioid crisis."
"ACCOUNTABLE FOR DEATHS AND ADDICTIONS"
The case was brought by Oklahoma Attorney General Mike Hunter, who
alleged that J&J's marketing practices helped fuel the opioid
epidemic by flooding the market with painkillers.
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"Johnson & Johnson will finally be held accountable for thousands of
deaths and addictions caused by their actions," Hunter said.
The trial came after Oklahoma had resolved claims against OxyContin
maker Purdue Pharma LP in March for $270 million and Teva in May for
$85 million, leaving J&J as the lone defendant.
The verdict came as two Ohio counties prepare for a scheduled
October trial before a federal judge in Cleveland. About 2,000
lawsuits out of some 2,500 filed nationwide are consolidated in the
case in Cleveland.
Endo International Plc <ENDP.O> and Allergan Plc <AGN.N> last week
agreed to pay $15 million to avoid going to trial in October in a
case by two Ohio counties, subject to court approval.
Some plaintiffs' lawyers have compared the opioid cases to
litigation by states against the tobacco industry that led to a $246
billion settlement in 1998.
Joe Rice, a lead plaintiff's attorney for municipalities in the
federal litigation, said if the Oklahoma award were extrapolated to
other states, it could mean an annual abatement cost of around $38
billion.
“It does indicate that if I’m in the pharmaceutical business, I’ve
got to think long and hard about annual payments of my share of
that,” he said.
The judge overseeing the federal litigation in Ohio has been pushing
for a global settlement.
J&J, which is among multiple pharmaceutical companies that are
defendants in the federal litigation, said it remains "open to
viable options" to resolve the Ohio case, including through
settlement.
During the Oklahoma trial, lawyers for the state argued that J&J
carried out a years-long marketing campaign that minimized the
painkillers' addiction risks and promoted their benefits.
The lawyers called J&J an opioid "kingpin" and argued that its
marketing created a public nuisance as doctors over-prescribed the
drugs, leading to a surge in overdose deaths.
J&J countered that its marketing claims had scientific support and
its painkillers accounted for a tiny fraction of opioids prescribed
in Oklahoma. The company said in a statement that since 2008, its
painkillers accounted for less than 1% of the U.S. market, including
generics.
Teva said the ruling supported its rationale for settling the case
before trial, and said it was preparing to defend itself in the
upcoming trial in Ohio.
Purdue, which is also among the defendants in the Ohio litigation,
did not immediately respond to a request for comment.
(Reporting by Heide Brandes in Norman, Oklahoma, and Nate Raymond in
Boston; Additional reporting by Julie Steenhuysen in Chicago and
Jonathan Stempel in New York; Writing by Tom Hals; Editing by
Noeleen Walder, Bill Berkrot and Leslie Adler)
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