April 8, 2019 / 8:46 PM / 15 days ago

Breakingviews - America’s opioid legal blitz is a smoking mess

Bottles of prescription painkiller OxyContin made by Purdue Pharma LP sit on a shelf at a local pharmacy in Provo, Utah, U.S., April 25, 2017. REUTERS/George Frey

NEW YORK (Reuters Breakingviews) - The American legal blitz over opioids is a smoking mess. Overdose deaths are mounting, Oklahoma last month won a $270 million settlement against Purdue Pharma and its owners, and thousands more lawsuits target makers, distributors and sellers of the drug. It recalls the tobacco crisis that ended with a $206 billion agreement in 1998. Yet proving liability and apportioning blame will be much harder.

There are clear parallels between Big Pharma and Big Tobacco. Over 47,000 Americans died from an opioid overdose in 2017, and about three-quarters of those who became addicted in the 2000s started with prescription pills. Manufacturers, such as Purdue and Johnson & Johnson, allegedly oversold the benefits of opioids and underplayed the risks. And they funded outside parties who pushed unproven, profitable ideas like pseudoaddiction – that patients’ showing signs of addiction just needed higher doses. Distributors ignored blatant signs of abuse – McKesson sent 3 million tablets in less than a year to one rural town with 400 inhabitants.

Tobacco lawyers had an easier job proving liability, however. Companies concealed for decades that they knew their product was addictive and harmful. Victims often stuck with the same brand until death. And a few deep-pocketed firms dominated the market.

In contrast, opioids’ addictive and deadly properties have been known for centuries. The majority of overdoses involve illegal drugs like heroin and occur years after the initial prescription. Much of the fight will center on novel legal theories claiming these firms created a public nuisance, and therefore should pay to clean up the mess.

In the Oklahoma settlement, Purdue and the Sackler family that owns the firm agreed to establish a center for studying and treating addiction. That covers only one firm and about 1 percent of the U.S. population, suggesting far bigger deals could follow. One Ohio judge is presiding over some 2,000 suits and the first trials are scheduled to begin in October.

Both sides have reason to negotiate. Companies fear the uncertainty and giant damages that could come in court. Municipalities worry they may not be able to prove their case, or that a disorderly process could lead to bankruptcies and uneven payouts. But there’s no ready prescription for getting this many parties to agree on who owes what. The legal quagmire, like the underlying social crisis, looks set to endure.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


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