Johnson & Johnson Found Liable for Fueling Oklahoma's Opioid Crisis and Will Pay $572 Million

"Johnson & Johnson executives made the calculated and coldblooded decision that they were going to produce a mutant strain of poppy, corner the market and supply massive amounts of the active ingredients for other companies to manufacture opioids," Oklahoma AG Mike Hunter says.

Johnson & Johnson shares rose as much as 5% after an Oklahoma judge ordered the company to pay far less than some investors expected in the first trial by a state seeking compensation for the public-health crisis spawned by opioid painkillers.

Oklahoma Judge Thad Balkman ruled Monday that J&J created a temporary public nuisance by duping doctors into overprescribing its opioid-based medications, and ordered the company to pay $572 million to the state. Oklahoma had sought as much as $17.5 billion. J&J said it would appeal the ruling.

The ruling was seen as an important benchmark for pharmaceutical executives facing thousands of similar lawsuits across the U.S. from cities, counties and states. While several companies have reached settlements in a few cases, some analysts predict opioid makers and distributors may have to pay a total of $100 billion to resolve their liability for the crisis.

J&J and others, including Teva Pharmaceutical Industries Ltd. and McKesson Corp., face their next courtroom test two months from now when the first federal cases targeting their marketing of opioid painkillers are set for trial in Cleveland.

Judge Balkman heard the case without a jury during almost eight weeks of trial testimony that ended in mid-July.

Oklahoma Attorney General Mike Hunter accused J&J and other opioid makers of overstating the painkillers’ benefits and understating their risks in relentless marketing campaigns that duped doctors into prescribing the drugs for ailments not approved by regulators. Hunter claimed J&J was a “kingpin” of the crisis because it once owned companies that grew poppies used to make the painkillers. J&J sold its Tasmania-based unit that processed opium in 2016.

Hunter told Balkman in court J&J has accepted “zero responsibility” for its central role in fueling the public-health crisis tied to opioids. He said the company -- rather than Oklahoma taxpayers -- should pick up the tab for the epidemic.

Bad Acts

J&J argued it was being blamed for the bad acts of others, including Purdue Pharma LP and Teva. New Brunswick, New Jersey-based J&J says the state was overreaching in asking for $17.5 billion in reimbursement. While originally named as defendants in the case, Purdue agreed to a $270 million settlement before the trial began in May and Teva agreed to pay $85 million to resolve the state’s allegations.

J&J’s lawyers derided Oklahoma’s claims that the company flooded the state with sales reps eager to use flawed studies to tout the effectiveness of their opioid-based pain patches and pills.

“The state would have you believe we marshaled an army to come here to mislead doctors about risks and benefits of opioids,” J&J attorney Larry Ottaway said. “Not true.”

Opioids were involved in 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. During that same period, more than 4,000 Oklahomans died from opioid abuse and thousands were left hooked on pills, according to the state.

The case is State of Oklahoma v. Purdue Pharma LP, CJ-2017-816, Cleveland County, Oklahoma, District Court (Norman).

Subscribe to our YouTube channel

TICTOC ON SOCIAL:

Follow TicToc on Twitter

Like TicToc on Facebook

Follow TicToc on Instagram

Watch all of TicToc’s videos

Listen to TicToc’s podcast

Subscribe to our newsletter

TicToc by Bloomberg is global news for the life you lead. We are a 24/7 news network that covers breaking news, politics, technology, business and entertainment stories from around the globe, supported by a network of Bloomberg’s 2,700 journalists across 120 countries.