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Jun092017

Ohio Attorney General Sues Pharmaceutical Companies Over Opioid Marketing - Yet Another Sign of Government Focus on Recovering Financial Cost of Opioid Epidemic

Last week, Ohio Attorney General Mike DeWine filed a lawsuit against multiple pharmaceutical companies, including Purdue, Teva, Johnson & Johnson, and Janssen.  The suit alleges that, beginning in the late 1990’s, the companies disseminated false information about the risks and benefits of long-term opioid use through million dollar marketing schemes intended to de-stigmatize opioids and increase their use for chronic pain. 

The complaint describes direct marketing campaigns targeting doctors, as well as reliance on prestigious physicians in the pain management field and front groups—who held themselves out as independent patient advocacy organizations, yet received almost all of their funding from pharmaceutical industry sources—to spread misinformation and to make false statements that the CDC and the FDA had proven to be untrue.  One example of the alleged misinformation was the assertion that opioid users showing signs of addiction, like requesting drugs by name, manipulative behavior, seeing more than one doctor to obtain opioids, and hoarding, were actually being undertreated and should be prescribed higher dosages of opioids.  According to the complaint, pharmaceutical companies and the doctors associated with them referred to this phenomenon as “pseudoaddiction,” and falsely claimed that it was supported by scientific evidence.  This deceptive marketing, the Ohio AG claims, caused Ohio doctors to overprescribe opioids for chronic pain conditions, directly resulting in the dramatic increase in opioid addiction, overdose, and death.

The financial burden associated with the opioid epidemic in Ohio, and across the nation, has been astronomical.  Costs include the more obvious expenses, like the costs of the prescriptions themselves, and for treatment and counseling that are paid for by government health programs.  The epidemic carries extremely costly collateral consequences as well, including higher expenditures relating to unemployment, the increased need for child protection services, and medical care for babies born with opioid addiction.  For example, the Ohio complaint alleges that the state spends an estimated $45 million per year for placement costs of children in custody because their parents abuse opiates, and that Ohio’s child protection agencies experienced a nine percent increase in the number of children in foster care between 2011 and 2015.

Ohio is not the first state hit hard by the opioid epidemic to sue pharmaceutical companies.  West Virginia, which has the highest rate of fatal opioid overdoses in the country, reached a $36 million settlement in January related to a 2012 lawsuit alleging that drug companies knowingly sold millions of pills to pharmacies that distributed the medication without proper oversight and inundated the state with painkillers.  Mississippi has also filed a similar lawsuit, as have counties in Illinois, New York, and California; the cities of Everett, Washington, and Chicago, Illinois; and the Cherokee Nation.  These states and local municipalities hope to use litigation to recover costs associated with rampant opioid abuse from the pharmaceutical industry. 

The Ohio complaint states causes of action under Ohio’s Product Liability Act, the public nuisance law, the Ohio Consumer Sales Practices Act, Medicaid Fraud, and common law fraud.  Several of the defendants are also named in a cause of action under the Ohio Corrupt Practice Act, akin to a federal RICO claim.  Among other relief, Ohio demands damages for the funds paid by its Department of Medicaid and Bureau of Workers’ Compensation for excessive opioid prescriptions as well as restitution for Ohio consumers who paid for excessive prescriptions of opioids for chronic pain.

As the opioid epidemic continues, pharmaceutical companies and their individual executives, as well as sales and marketing staff, could face criminal charges if evidence shows that they intentionally lied about the safety of their products.  In 2007 for example, Purdue Pharma, the maker of painkiller OxyContin, pleaded guilty to criminal charges alleging that it misled regulators, doctors and patients about the risk of becoming addicted to the drug.  Three of the company’s top executives also pleaded guilty individually to related charges.  It is possible that the recent civil litigation against pharmaceutical companies could spawn similar criminal investigations.

Doctors who prescribe painkillers, as well as the pharmacies that distribute them, are also likely to continue to face increased scrutiny as the federal and state governments struggle to control the opioid crisis.  A review of Department of Justice press releases found that, so far this year at least 26 medical professionals have already been convicted, charged or sentenced in federal courts in Ohio, Pennsylvania, and West Virginia for offenses relating to unlawful distribution of prescription drugs. 

The epidemic could also be leading to increased oversight of government funded treatment facilities and anti-drug programs to ensure that such entities comply with regulations and do not abuse the heightened demand for their services.  For example, the former CEO of a company contracted to provide substance abuse treatment to California students pleaded guilty to federal charges relating to allegations that the company submitted more than $50 million in fraudulent claims for treatment services that it never provided.  Similarly, the New York State Attorney General has also targeted treatment programs in its state, and recently indicted the owners of multiple Medicaid-enrolled drug treatment centers and three-quarter houses in an illegal kickback scheme, which included money laundering and grand larceny charges.  It is likely that similar prosecutions will continue to result from law enforcement efforts to combat opioid abuse and increased national attention on the issue.

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