KGOU

Johnson & Johnson Ordered To Pay Oklahoma $572 Million In Opioid Trial

Aug 26, 2019
Originally published on August 27, 2019 1:34 pm

Updated at 7:04 p.m. ET

An Oklahoma judge has ruled that drugmaker Johnson & Johnson helped ignite the state's opioid crisis by deceptively marketing painkillers, and must pay $572 million to the state.

Oklahoma sought $17.5 billion, blaming Johnson & Johnson for fueling the crisis that has claimed the lives of more than 6,000 people in the state.

It's the first ruling to hold a pharmaceutical company responsible for one of the worst drug epidemics in American history.

Judge Thad Balkman delivered his decision from the bench, after presiding over a seven-week civil trial in the college town of Norman, Okla.

"The defendants caused an opioid crisis that is evidenced by increased rates of addiction, overdose deaths and neonatal abstinence syndrome in Oklahoma," Judge Balkman said in a statement.

Johnson & Johnson immediately released a statement saying that the company "plans to appeal the opioid judgment in Oklahoma."

Oklahoma Attorney General Mike Hunter's suit alleged that Johnson & Johnson, through its pharmaceutical subsidiary Janssen, helped ignite a public health crisis that has killed thousands of state residents.

Balkman's ruling affirmed the key legal argument of the state's case, that the drugmaker had created a "public nuisance."

"The state met its burden," Balkman said in his comments, proving the company acted improperly with its "misleading marketing and promotion of opioids."

"This is a temporary public nuisance that can be abated and the proper remedy for the public nuisance is equitable abatement," he said.

The amount Balkman ordered Johnson & Johnson to pay falls far short of the $17.5 billion state officials requested, but in his ruling he acknowledged the cost of the recovery effort will be much larger.

Indeed, according to estimates detailed in this decision, the company's $572 million payment would only only fund Oklahoma's opioid recovery plan for a single year.

"Though several of the state's witnesses testified that the plan will take at least 20 years to work," Judge Balkman wrote, "the state did not present sufficient evidence of the amount of time and costs necessary beyond year one to abate the opioid crisis."

That portion of the ruling took some observers by surprise.

"If Johnson & Johnson is responsible for the opioid epidemic as a long-term problem, why only provide enough money for one year?" says Richard Ausness who teaches law at the University of Kentucky and follows opioid litigation closely.

Judge Balkman declined to answer questions about the ruling.

Johnson & Johnson argues that the facts don't support the judge's finding.

"This judgment is a misapplication of public nuisance law that has already been rejected by judges in other states," said Michael Ullmann, executive vice president, general counsel for Johnson & Johnson, in a statement. "The unprecedented award for the state's 'abatement plan' has sweeping ramifications for many industries and bears no relation to the company's medicines or conduct."

Attorney General Hunter celebrated the state's win, despite the discrepancy between the $572 million award and the billions the state had asked for.

"It's going to be an important step forward in dealing with the epidemic," he told reporters. "Certainly we would have liked to walk out of here with $17 billion, but realistically we've been able to get together almost a billion dollars to help Oklahoma."

Initially, Hunter's lawsuit included Purdue Pharma, the maker of OxyContin. In March, Purdue Pharma settled with the state for $270 million. Soon after, Hunter dropped all but one of the civil claims, including fraud, against the two remaining defendants.

Just two days before the trial began, another defendant, Teva Pharmaceuticals of Jerusalem, announced an $85 million settlement with the state.

Both companies deny any wrongdoing.

Johnson & Johnson marketed the opioid painkillers Duragesic and Nucynta. Lawyers for the company say its products were highly regulated by the Food and Drug Administration, among other agencies, and that the state did not provide any evidence showing the company's sales practices helped fuel the crisis. It argued these branded opioid products made up less than 1% of total opioid prescriptions in Oklahoma.

As NPR reported in July, during the trial the state's expert witness, Dr. Andrew Kolodny, testified that Johnson & Johnson also profited by manufacturing raw ingredients for opioids and then selling them to other companies, including Purdue, which makes Oxycontin.

Speaking on behalf of Janssen and Johnson & Johnson Monday, attorney Sabrina Strong told reporters that "litigation is not the answer" to the opioid crisis.

"Johnson & Johnson did not cause the opioid crisis. Although it includes some diversion of prescription medicine, it's largely driven by illegally manufactured drugs that are coming into the country from Mexico and elsewhere," she said.

The case is being closely watched by plaintiffs in other opioid lawsuits, particularly the roughly 2,000 cases in the National Prescription Opiate Litigation which is pending before a federal judge in Ohio. That consolidated lawsuit includes 22 defendants — opioid manufacturers and distributors, including Johnson & Johnson.

In a statement, the co-lead plaintiff attorneys of the Ohio litigation called today's ruling a "milestone," saying the ruling in favor of Oklahoma's public nuisance claims is a "critical step forward" for the communities they represent.

"The ruling in favor of the State of Oklahoma's public nuisance claims confirms what communities have been saying for some time: the opioid epidemic significantly interfered with public health," said the attorneys, Paul T. Farrell Jr., Paul J. Hanly, Jr., and Joseph F. Rice.

This story is part of a reporting partnership that includes StateImpact Oklahoma, other member stations and Kaiser Health News.

Copyright 2019 NPR. To see more, visit https://www.npr.org.

MARY LOUISE KELLY, HOST:

The first court ruling in a wave of lawsuits against the drug industry was decided today. A state judge in Oklahoma ruled that Johnson & Johnson should pay more than $570 million to help ease that state's opioid addiction crisis. The state had asked for as much as 17 billion from the company.

North Country Public Radio's Brian Mann joins me now via Skype to talk about this decision.

Hi, Brian.

BRIAN MANN, BYLINE: Hi, Mary Louise.

KELLY: So the judge here, Judge Balkman - what did he say about Johnson & Johnson? How did he explain this ruling?

MANN: You know, he was very measured, very professional in tone but, at the same time, really laid out a devastating view of Johnson & Johnson's behavior here, concluding that the company used misleading marketing pushing the sale of these addictive opioid medications. Here he is speaking from the bench.

(SOUNDBITE OF ARCHIVED RECORDING)

THAD BALKMAN: Defendants caused an opioid crisis that is evidenced by increased rates of addiction, overdose deaths and neonatal abstinence syndrome in Oklahoma.

MANN: And so he concluded that it's the company's responsibility to pay roughly half a billion dollars to help solve this public health crisis.

KELLY: So half a billion dollars - obviously a lot less than the $17 billion Oklahoma was looking for. Is there some way to view this as at least a partial win for Johnson & Johnson?

MANN: Yeah. Johnson & Johnson signaled that that's not how they view it by announcing immediately that they'll appeal this decision. And the reason it's not good - a good sign for the company is, first, that this ruling is, for one, relatively small, a relatively low-population state. So when you multiply their possible liability over the entire U.S. that's been hit by this addiction epidemic, the dollar figures could run into many billions of dollars.

Another problem for Johnson & Johnson is that their argument here that government regulators and doctors were the ones more directly at fault in this epidemic - you know, those arguments just didn't work in this courtroom. And so it's going to be interesting to see how that plays going forward. But, again, Johnson & Johnson says they will keep fighting this going forward.

KELLY: Do we know, in the meantime, how Oklahoma plans to spend the money?

MANN: So there was a new state law pushed through in Oklahoma just this summer that basically mandates that any money - if this does survive appeal, any money will go into the state's general fund, and that means lawmakers and the governor will decide how it's spent.

And this could get messy, you know, and controversial. People worry that this opioid money could be diverted in the same way that tobacco money was often diverted back in the 1990s. Addiction advocates, of course, hope to see a lot of this money go to communities and to families that have been hit hard by this epidemic.

KELLY: And in the short moments we have left, Brian, you flagged there what this might mean for Johnson & Johnson going forward. What about, you know, all these 2,000 local and state governments that have filed similar lawsuits? What signal might this send about liability across the industry?

MANN: Yeah. This is really a powerful moment when all of these companies have to really look at what their potential exposure could be. This has been a devastating year for the pharmaceutical industry. A lot of information has come out about their practices, much of it really unsavory.

And there are a lot more of these trials just kind of queued up to the horizon, including a big federal trial in Oklahoma (ph). The federal judge there, Dan Polster, has been pushing the industry to try to reach a big national settlement.

KELLY: And we will see what happens there. Brian Mann, I'm going to have to leave it there.

Thanks so much.

MANN: All right, thank you.

KELLY: Brian Mann with North Country Public Radio. Transcript provided by NPR, Copyright NPR.