Oklahoma Pegs J&J with $527 Million Opioid Verdict
Johnson & Johnson will only have to pay a fraction of what it could have regarding the sale of its opioid pain treatments following Monday’s ruling in an Oklahoma courthouse that the life sciences giant and its subsidiaries bore some responsibility for the state’s opioid addiction crisis.
Johnson & Johnson was ordered to pay $572 million in damages, more than double what Purdue Pharma agreed to pay earlier this year. Between J&J, Purdue ($270 million), and Israel-based Teva Pharmaceuticals ($85 million), Oklahoma will garner about $927 million – a far cry from the $20 billion the state had been seeking in damages related to the opioid crisis.
The $572 million in damages was a sigh of relief to J&J and its shareholders. The company’s stock prices climbed following the announcement of the ruling to close at $127.80. Share prices have continued to climb in premarket trading today to $130.30. The company plans to appeal the ruling.
Throughout the watershed trial, Oklahoma has argued that the aggressive marketing tactics of J&J and the other companies, contributed to an avalanche of opioid prescriptions in the state. Over a 10-year period, from 2007 to 2017, Oklahoma Attorney General Mike Hunter said opioid overdoses killed 4,653 people in the state, the Associated Press reported. Johnson& Johnson, Hunter said, was a “kingpin company motivated by greed,” according to the report. During arguments before the court, Hunter specifically called out two former J&J subsidiaries, Noramco and Tasmanian Alkaloids, which produced a significant amount of the raw opium used by J&J and other companies in the manufacture of the opioid drugs.
During the arguments before the court, the AP noted that many Oklahoma families who lost loved ones to opioid overdoses were in the courtroom. The state had pursued the case against J&J and the other companies under its public nuisance statutes. The state argued that it would cost public coffers nearly $20 billion over the course of 30 years to abate the opioid crisis, the AP said.
In its defense, Johnson & Johnson said those numbers were exaggerated. The company plans to appeal the $527 million verdict. In a statement issued following the verdict, J&J said the ruling disregards the company’s compliance with state and federal laws, as well as the unique role that its pain treatments have played in helping patients suffering from acute and chronic pain. J&J said its drugs accounted for less than 1% of the total opioid prescriptions sold in Oklahoma. The company also said the judgment is not consistent with the public nuisance statute and noted that the claims “violate fundamental principles of due process by seeking to hold a company liable for conduct permitted under federal law and regulations.”
Michael Ullmann, J&J’s general counsel, said J&J subsidiary Janssen did not cause the opioid crisis in Oklahoma. Ullmann said the former subsidiaries the Oklahoma attorney general cited in his arguments complied with the law in its supplying of the raw ingredients for opioid drugs. Ullmann also pointed out that those companies did not engage in any marketing practices, nor did they sell their products to the public.
“This judgment is a misapplication of public nuisance law that has already been rejected by judges in other states,” Ullmann said 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.”
The U.S. Chamber of Commerce agreed with Ullmann and sharply rebuked the ruling as well. In a brief statement, the Chamber said the ruling is based on “questionable legal claims from an ill-conceived lawsuit” that will do little to address the state’s opioid addiction crisis. The Chamber said if the case is not overturned, then the state’s public nuisance laws could be used to target any industry.
“Oklahoma’s case hinged on the specious legal claim of public nuisance meant to address property disputes, not large-scale policy issues,” the Chamber said in its statement.
Ullmann added that the opioid crisis is a complex issue and said the life sciences giant is working with its partners to “find ways to help those in need.” J&J said it has sponsored substance abuse education programs for healthcare workers and is also working with practitioners to combat the opioid crisis at the community level.