{"id":10758,"date":"2017-08-22T17:36:14","date_gmt":"2017-08-22T17:36:14","guid":{"rendered":"https:\/\/dominiclevent.com\/blog\/?p=10758"},"modified":"2019-04-17T17:17:11","modified_gmt":"2019-04-17T17:17:11","slug":"drug-industry-faces-tidal-wave-of-litigation-over-opioid-crisis-financial-times","status":"publish","type":"post","link":"https:\/\/dominiclevent.com\/blog\/drug-industry-faces-tidal-wave-of-litigation-over-opioid-crisis-financial-times\/","title":{"rendered":"Drug industry faces ‘tidal wave’ of litigation over opioid crisis – Financial Times"},"content":{"rendered":"


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Companies that make or distribute opioid painkillers are facing a \u201ctidal wave\u201d of litigation as US officials seek to raise funds to fight the country’s addiction epidemic and punish those they accuse of fuelling the crisis.\u00a0<\/p>\n

The number of government officials launching legal action against drugmakers and wholesalers has soared in the past year in what some lawyers see as a harbinger of a settlement that could echo the more than $200bn extracted from the tobacco industry in 1998.\u00a0<\/p>\n

At least 30 states, cities and counties have either filed lawsuits or are formally recruiting lawyers using a process that tends to prelude full-blown legal action, according to a Financial Times analysis.<\/p>\n

The snowballing litigation comes as President Donald Trump has pledged to officially declare the opioid crisis a\u00a0national emergency<\/a> in a move that would allow Washington to direct funds to affected communities.\u00a0<\/p>\n

In 2015, 33,000 Americans died after overdosing on opioids such as heroin and fentanyl \u2014 a large proportion of whom ended up becoming addicted to the illegal drugs after first abusing prescription painkillers. Recent government figures suggest the total for 2016 could be even higher.<\/p>\n

The barrage of legal action tends to target\u00a0manufacturers<\/a>, distributors or pharmacy chains \u2014 or companies from all three sectors. Those most commonly named as defendants include drugmakers such as Purdue Pharmaceuticals, Johnson & Johnson, Allergan and Teva<\/a>; distributors such as McKesson<\/a>, AmerisourceBergen<\/a> and Cardinal Health<\/a>; and drugstore operators such as Walgreens and CVS.\u00a0<\/p>\n

In the majority of cases, the lawsuits argue that manufacturers used aggressive sales tactics to boost revenues from the drugs while downplaying the risks, or that wholesalers and pharmacies did too little to identify large numbers of pills that were being diverted to black market dealers.\u00a0<\/p>\n

\u201cIt\u2019s a tidal wave,\u201d said Jodi Avergun, a lawyer at Cadwalader, Wickersham & Taft. \u201cIf I were an executive, I would be asking how many more of these are there going to be. At every level of government in almost every state there is a potential plaintiff.\u201d\u00a0<\/p>\n

This week, the state of New Hampshire\u00a0joined Ohio<\/a> and Oklahoma in filing a lawsuit, which in its case was directed at Purdue, the privately held group that is the biggest maker of opioid medications.\u00a0<\/p>\n

The list of attorneys-general pursuing companies that have profited from opioids is expected to grow, after three sent out a tender document known as a \u201crequest for proposals\u201d, which invites law firms to bid for contracts to manage the litigation.\u00a0<\/p>\n

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At every level of government in almost every state there is a potential plaintiff<\/p>\n<\/div>\n<\/blockquote>\n

The District of Columbia is offering law firms up to $45m in fees to support an investigation and possible litigation against\u00a0distributors and \u201cother potentially liable parties\u201d like drugmakers, according to a copy of a document seen by the FT. <\/p>\n

Any fees would be subtracted from a successful settlement. Final bids are due on Tuesday.\u00a0<\/p>\n

\u201cThe District and its residents have expended millions of dollars combating the opioid epidemic, the crime related to it, and drug treatment and rehabilitation,\u201d the document says. \u201cThe Office of the Attorney General has initiated an investigation into these practices and will determine whether litigation should be brought to protect district residents and the public interest.\u201d\u00a0<\/p>\n

A spokesperson for the DC attorney-general said the contract was for \u201cinvestigating and potentially litigating against distributors, with an option to expand to manufacturers\u201d.\u00a0<\/p>\n

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President Donald Trump says he will declare an epidemic of opioid addiction to be a national emergency, unlocking federal funds for treatment \u00a9 AP<\/figcaption><\/figure>\n

Attorneys-general in Kentucky and Delaware have sent out similar requests to lawyers, while last week a county in Oregon launched its own lawsuit.\u00a0<\/p>\n

Ms Avergun, chair of Cadwalader’s white collar defence group, said many officials were hoping to use settlement funds to pay for treatment centres and extra police to cope with the crisis, adding: \u201cThe costs of drug treatment are astronomical and have threatened to bankrupt a lot of counties.\u201d<\/p>\n

Most of the litigation is being led by firms on a so-called contingent fee basis, she pointed out, meaning lawyers will only be paid if the lawsuits result in a settlement \u2014 a structure that insulates officials from the financial risk of losing in court.\u00a0<\/p>\n

Ms Avergun said she put the odds of the litigation snowballing into the kind of \u201cglobal settlement\u201d agreed with Big Tobacco at \u201cmore than 50\/50\u201d.\u00a0<\/p>\n