Closing Arguments in Oklahoma Opioid Trial

By Jackie Fortier, StateImpact Oklahoma

A global megacorporation best known for Band-Aids and baby powder may have to pay billions for its alleged role in the opioid crisis. Johnson & Johnson was the sole defendant in a closely watched trial that wrapped up in Oklahoma state court this week, with a decision expected later this summer.

The ruling in the civil case could be the first that would hold a pharmaceutical company responsible for one of the worst drug epidemics in American history.

Oklahoma Attorney General Mike Hunter’s lawsuit alleges Johnson & Johnson and its subsidiary Janssen Pharmaceuticals helped ignite the opioid crisis with overly aggressive marketing, leading to thousands of overdose deaths over the past decade in Oklahoma alone.

The trial took place over seven weeks in the college town of Norman. Instead of a jury, a state judge heard the case. During closing arguments Monday, Hunter called the company the “kingpin” of the opioid crisis.

“What is truly unprecedented here is the conduct of these defendants on embarking on a cunning, cynical and deceitful scheme to create the need for opioids,” Hunter said.

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The state urged Judge Thad Balkman, who presided over the civil trial, to find Johnson & Johnson liable for creating a “public nuisance” and force the company to pay more than $17 billion over 30 years to abate the public health crisis in the state.

Driving the opioid crisis home has been a cornerstone of Oklahoma’s lawsuit. In closing arguments Monday, one of the state’s attorneys, Brad Beckworth, cited staggering prescribing statistics in the county where the trial took place.

“What we do have in Cleveland County is 135 prescription opioids for every adult,” Beckworth said. “Those didn’t get here from drug cartels. They got here from one cartel: the pharmaceutical industry cartel. And the kingpin of it all is Johnson & Johnson.”

Johnson & Johnson’s attorney Larry Ottaway, rejected that idea in his closing argument, saying the company’s products, which had included the fentanyl patch Duragesic and the opioid-based pill Nucynta, were minimally used in Oklahoma.

He scoffed at the idea that physicians in the state were convinced to unnecessarily prescribe opioids due to the company’s marketing tactics.

“The FDA label clearly set forth the risk of addiction, abuse and misuse that could lead to overdose and death. Don’t tell me that doctors weren’t aware of the risks,” Ottaway said.

Ottaway played video testimony from earlier in the trial, showing Oklahoma doctors who said they were not misled about the drugs’ risks before prescribing them.

“Only a company that believes its innocence would come in and defend itself against a state, but we take the challenge on because we believe we are right,” Ottaway argued.

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. The money will be used for litigation costs and an undisclosed amount will be allocated “to abate the opioid crisis in Oklahoma,” according to a press release from Hunter’s office.

Both companies deny any wrongdoing.

The Legal Liability of ‘Public Nuisance’

Most states and more than 1,600 local and tribal governments are suing drugmakers who manufactured various kinds of opioid medications, and drug distributors. They are trying to recoup billions of dollars spent addressing the human costs of opioid addiction.

“Everyone is looking to see what’s going to happen with this case, whether it is going to be tobacco all over again, or whether it’s going to go the way the litigation against the gun-makers went,” says University of Georgia law professor Elizabeth Burch.

But the legal strategy is complicated. Unlike the tobacco industry, from which states won a landmark settlement, the makers of prescription opioids manufacture a product that serves a legitimate medical purpose, and is prescribed by highly trained physicians — a point that Johnson & Johnson’s lawyers made numerous times during the trial.

Oklahoma’s legal team based its entire case on a claim of public nuisance, which refers to actions that harm members of the public, including injury to public health. Burch says each state has its own public nuisance statute, and Oklahoma’s is very broad.

“Johnson & Johnson, in some ways, is right to raise the question: If we’re going to apply public nuisance to us, under these circumstances, what are the limits?” Burch said. “If the judge or an appellate court sides with the state, they are going to have to write a very specific ruling on why public nuisance applies to this case.”

Burch said the challenge for Oklahoma has been to tie one opioid manufacturer to all of the harms caused by the ongoing public health crisis, which includes people struggling with addiction to prescription drugs, but also those harmed by illegal street opioids, such as heroin.

University of Kentucky law professor Richard Ausness agreed that it’s difficult to pin all the problems on just one company.

“Companies do unethical or immoral things all the time, but that doesn’t make it illegal,” Ausness said.

If the judge rules against Johnson & Johnson, Ausness said, it could compel other drug companies facing litigation to settle out of court. Conversely, a victory for the drug giant could embolden the industry in the other cases.

Oklahoma’s Paid Expert Witness

Earlier in the trial, the state’s paid expert witness, Dr. Andrew Kolodny, testified that Johnson & Johnson did more than push its own pills — until 2016, it also profited by manufacturing raw ingredients for opioids and then selling them to other companies, including Purdue, which makes Oxycontin.

“Purdue Pharma and the Sacklers have been stealing the spotlight, but Johnson & Johnson in some ways, has been even worse,” Kolodny testified.

Kolodny said that’s why the company downplayed to doctors the risks of opioids as a general class of drugs, knowing that almost any opioid prescription would benefit its bottom line.

(Editor’s note: Kolodny received upwards of $500,000 for his testimony. His work as a paid consultant for at least two law firms pursuing opioid litigation was not publicly disclosed until the Oklahoma trial. (See “How Opioid Critics and Law Firms Profit From Litigation”).

DR. ANDREW KOLODNY

DR. ANDREW KOLODNY

The state’s case also focused on the role of drug sales representatives. Drue Diesselhorst was one of Johnson & Johnson’s busiest drug reps in Oklahoma. Records discussed during the trial showed she continued to call on Oklahoma doctors who had been disciplined by the state for overprescribing opioids. She even continued to meet with doctors who had patients who died from overdoses.

But Diesselhorst testified she didn’t know about the deaths, and no one ever instructed her to stop targeting those high-prescribing physicians.

“My job was to be a sales rep. My job was not to figure out the red flags,” she said on the witness stand.

Johnson & Johnson’s Defense

Throughout the trial, Johnson & Johnson’s defense team avoided many of the broader accusations made by the state, instead focusing on the question of whether the specific opioids manufactured by the company could have caused Oklahoma’s high rates of addiction and deaths from overdose.

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Johnson & Johnson’s lawyer, Larry Ottaway, argued the company’s opioid products had a smaller market share in the state compared to other pharmaceutical companies, and he stressed that the company made every effort when the drugs were tested to prevent abuse.

He also pointed out that the sale of both the raw ingredients and prescription opioids themselves are heavily regulated.

“This is not a free market,” he said. “The supply is regulated by the government.”

Ottaway maintained the company was addressing the desperate medical need of people suffering from debilitating, chronic pain — using medicines regulated by the Food and Drug Administration and the Drug Enforcement Administration. Even Oklahoma purchases these drugs, for use in state health care services.

Judge Thad Balkman is expected to announce a verdict in August.

If the state’s claim prevails, Johnson & Johnson could, ultimately, have to spend billions of dollars in Oklahoma helping to ease the epidemic. State attorneys are asking that the company pay $17.5 billion over 30 years, to help abate the crisis in the state.

Balkman could choose to award the full amount, or just some portion of it, if he agrees with the state’s claim.

“You know, in some ways I think it’s the right strategy to go for the $17 billion,” Burch, the law professor, said. “[The state is saying] look, the statute doesn’t limit it for us, so we’re going to ask for everything we possibly can.”

In the case of a loss, Johnson & Johnson is widely expected to appeal the verdict. If Oklahoma loses, the state will appeal, Attorney General Mike Hunter said Monday.

This story is part of a partnership that includes StateImpact Oklahoma, NPR and Kaiser Health News. KHN is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Liability Trial of Opioid Drug Maker Could Set Precedents

By Jackie Fortier, Kaiser Health News

All eyes will be on Oklahoma this week when the first case in a flood of litigation against opioid drug manufacturers begins. Oklahoma Attorney General Mike Hunter’s suit alleges Johnson & Johnson, the nation’s largest drugmaker, helped ignite a public health crisis that has killed thousands of state residents.

With just two days to go before the trial, one of the remaining defendants, Teva Pharmaceutical, announced an $85 million settlement with the state on Sunday. The money will be used for litigation costs and an undisclosed amount will be allocated “to abate the opioid crisis in Oklahoma,” according to a press release from Hunter’s office.

In its own statement, Teva said the settlement does not establish any wrongdoing on the part of the company, adding Teva “has not contributed to the abuse of opioids in Oklahoma in any way.”

That leaves Johnson & Johnson as the sole defendant.

Court filings accuse the company of overstating the benefits of opioids and understating their risks in marketing campaigns that duped doctors into prescribing the drugs for ailments not approved by regulators.

The bench trial — with a judge and no jury — is poised to be the first of its kind to play out in court.

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Nora Freeman Engstrom, a professor at Stanford Law school, said lawyers in the other cases and the general public are eager to see what proof Hunter’s office offers the court.

“We’ll all be seeing what evidence is available, what evidence isn’t available and just how convincing that evidence is,” she said.

Most states and more than 1,600 local and tribal governments are suing drugmakers and distributors. They are trying to recoup billions of dollars spent on addressing the fallout tied to opioid addiction.

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 remaining defendants. Teva settled for $85 million in May, leaving Johnson & Johnson as the only opioid manufacturer willing to go to trial with the state.

But he still thinks the case is strong.

“We have looked at literally millions of documents, taken hundreds of depositions, and we are even more convinced that these companies are the proximate cause for the epidemic in our state and in our country,” Hunter said.

The companies involved have a broad concern about what their liability might be, said University of Kentucky law professor Richard Ausness.

“This case will set a precedent,” he said. “If Oklahoma loses, of course they’ll appeal if they lose, but the defendants may have to reconsider their strategy.”

With hundreds of similar cases pending — especially a mammoth case pending in Ohio — Oklahoma’s strategy will be closely watched.

“And of course lurking in the background is the multi-state litigation in Cleveland, where there will ultimately be a settlement in all likelihood, but the size of the settlement and the terms of the settlement may be influenced by Oklahoma,” Ausness said.

Rx Opioids ‘Useful Products’

The legal case is complicated. Unlike tobacco, where states won a landmark settlement, Ausness pointed out that opioids serve a medical purpose.

“There’s nothing wrong with producing opioids. It’s regulated and approved by the Food and Drug Administration, the sale is overseen by the Drug Enforcement Administration, so there’s a great deal of regulation in the production and distribution and sale of opioid products,” Ausness said. “They are useful products, so this is not a situation where the product is defective in some way.”

It’s an argument that has found some traction in court. Recently, a North Dakota judge dismissed all of that state’s claims against Purdue, a big court win for the company. In a written ruling that the state says it will appeal, Judge James Hill questioned the idea of blaming a company that makes a legal product for opioid-related deaths.

“Purdue cannot control how doctors prescribe its products and it certainly cannot control how individual patients use and respond to its products,” the judge wrote, “regardless of any warning or instruction Purdue may give.”

Now the Oklahoma case rests entirely on a claim of public nuisance, which refers to actions that harm members of the public, including injury to public health.

“It’s sexy you know, ‘public nuisance’ makes it sound like the defendants are really bad,” Ausness said.

If the state’s claim prevails, Big Pharma could be forced to spend billions of dollars in Oklahoma helping ease the epidemic. “It doesn’t diminish the amount of damages we believe we’ll be able to justify to the judge,” Hunter said, estimating a final payout could run into the “billions of dollars.”

Hunter’s decision to go it alone and not join with a larger consolidated case could mean a quicker resolution for the state, Ausness said.

“Particularly when we’re talking about [attorneys general], who are politicians, who want to be able to tell the people, ‘Gee this is what I’ve done for you.’ They are not interested in waiting two or three years [for a settlement], they want it now,” he said. “Of course, the risk of that is you may lose.”

Oklahoma has the second-highest uninsured rate in the nation and little money for public health. Of the $270 million Purdue settlement, $200 million is earmarked for an addiction research and treatment center in Tulsa, though no details have been released. An undisclosed amount of the $85 million Teva settlement will also go to abating the crisis.

This story is part of a partnership that includes StateImpact Oklahoma, NPR and Kaiser Health News. KHN is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Legal Battles Brew Over High Cost of Arthritis Drugs

By Julie Appleby, Kaiser Health News

Early last winter, Pfizer launched its new rheumatoid arthritis treatment, Inflectra, pricing it 15 percent below the $4,000-a-dose wholesale price of Remicade, the drug for which it is a close copy.

Pfizer figured its lower price would attract cost-conscious insurers.

A year later, though, its drug has barely scratched the market and Pfizer has filed an antitrust suit against its rivals, alleging they are thwarting lower-priced competition through “exclusionary contracts” and rebates.

The outcome of the case — filed in September in U.S. District Court against Johnson & Johnson, the maker of Remicade, and Janssen Biotech — could affect the future of biosimilars, a new class of drugs. Some policy experts say these near-copies of biologics are key to slowing spending on complex and expensive specialty medications like those used to treat rheumatoid arthritis.

At the heart of the case are rebates, which are discounts off the wholesale price of drugs.

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Manufacturers offer them to help keep their products on insurers’ lists of covered drugs. The money mainly goes back to insurers and pharmacy benefit managers, who say the rebates help reduce health care spending.

But Pfizer alleges that those rebates are being used to thwart biosimilars’ entry into the marketplace.

“This is the first antitrust case we’ve seen like this around biosimilars,” said Michael Carrier, a Rutgers Law School professor “Pfizer is claiming that one form of anti-competitive behavior involves withholding rebates from insurers.”

Biosimilars are costly to produce, so they are not likely to trigger the same sharp pricing drop triggered by generics. Still, their manufacturers say they could bring consumers some relief to rival biologics’ high price tags.

Pfizer’s Inflectra is one of the first biosimilars to hit the market since Congress passed legislation in 2010 to pave the way.

According to Pfizer, weeks after Inflectra gained Food and Drug Admininstration approval, J&J moved to stake out its biologic turf.

J&J began requiring insurers and PBMs to sign “exclusionary contracts … designed to block both insurers from reimbursing and hospitals and clinics from purchasing Inflectra or other biosimilars of Remicade despite their lower pricing,” alleges the case filed in federal district court in Philadelphia.

If insurers don’t agree to the J&J contracts, the loss of rebates could “for some insurers, run into the tens of millions of dollars annually,” the Pfizer case alleges.

Even with its lower price, Pfizer faced an uphill battle to win market share.

Remicade is the fifth-biggest-selling drug by revenue in the U.S., reaping more than $4.8 billion in 2016 for makers J&J and Janssen, the suit said. Often, patients are reluctant to switch once they are established on an RA drug that is working for them.

Still, Pfizer thought it would pick up newly diagnosed patients and gain ground that way. But its lawsuit says the drug accounted for only about 4 percent of total sales, with Remicade getting the rest, by early September.

“We stand by our contracts,” said J&J and Janssen Biotech in a written statement. The firms also defend rebates as “competition that is doing what competition is meant to do: driving deeper discounts that will lead to overall lower costs.”

Yet the price of Remicade has not fallen, the Pfizer case says.

Since approval of Inflectra, J&J has raised the list price of Remicade by close to 9 percent, the lawsuit alleges. As of September, Remicade’s average sales price –after discounts and rebates — is more than 10 percent higher than Inflectra.

“This case is a big deal, because it has the potential to bring to light some of the anti-competitive contracting practices at work to keep … prices extremely high,” said Jaime King, a professor at University of California-Hastings College of the Law.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.