Johnson & Johnson ordered to pay $794m in opioid case

Lawyer Sabrina Strong, for Johnson & Johnson and its subsidiaries, told the media after the judgment on Monday that her clients did not cause the opioid abuse crisis. PHOTO: ASSOCIATED PRESS
Lawyer Sabrina Strong, for Johnson & Johnson and its subsidiaries, told the media after the judgment on Monday that her clients did not cause the opioid abuse crisis. PHOTO: ASSOCIATED PRESS

Judgment drives up drugmaker's share price as market had expected a much higher award

BOSTON/NORMAN (Oklahoma) • An Oklahoma judge has ordered Johnson & Johnson (J&J) to pay US$572.1 million (S$794.2 million) to the state for its part in fuelling an opioid epidemic by deceptively marketing addictive painkillers.

Monday's court award was substantially less than investors had expected, driving up J&J's shares.

The state's attorney-general had filed the lawsuit, seeking US$17 billion to address the impact of the drug crisis on Oklahoma. It had been considered a bellwether for other litigation nationwide over the opioid epidemic.

"The expectation was this was going to be a US$1.5 billion to US$2 billion fine," said healthcare strategist Jared Holz of Jefferies & Co.

Still, J&J said it would appeal against the decision.

Opioids were involved in almost 400,000 overdose deaths from 1999 to 2017, according to the US Centres for Disease Control and Prevention. Since 2000, some 6,000 Oklahomans have died from opioid overdoses, the state's lawyers said.

About 2,500 lawsuits have been brought by states, counties and municipalities nationally seeking to hold drugmakers responsible for opioid abuse nationwide.

Oklahoma's case was the first to go to trial. Some drugmakers have chosen to settle cases out of court.

In holding J&J liable after a seven-week, non-jury trial, Judge Thad Balkman of Cleveland County District Court in Norman, Oklahoma, said the state proved that J&J's misleading marketing and promotion of its Duragesic and Nucynta painkillers created a public nuisance.

 
 

Oklahoma wanted J&J to help it address the epidemic for the next 30 years by funding addiction treatment and prevention programmes.

Judge Balkman said in his written ruling that the award covered only one year of addressing the crisis because Oklahoma did not demonstrate the time and costs needed beyond that.

J&J said it will ask that the award be put on hold during an appeal process that could stretch into 2021. It also said Oklahoma failed to show that its products and activities had created a public nuisance.

"You can't sue your way out of the opioid abuse crisis," Ms Sabrina Strong, a lawyer for J&J, said at a news conference after the verdict. "Everyone must come together to address this. But J&J did not cause the opioid crisis."

The case was brought by Oklahoma Attorney-General Mike Hunter, who alleged that J&J's marketing practices helped fuel the opioid epidemic by flooding the market with painkillers.

Some plaintiffs' lawyers have compared the opioid cases to litigation by states against the tobacco industry that led to a US$246 billion settlement in 1998.

J&J, which is among multiple pharmaceutical companies that are defendants in the federal litigation, said it remains "open to viable options" to resolve the Ohio case, including through settlement.

During the Oklahoma trial, lawyers for the state argued that J&J carried out a years-long marketing campaign that minimised the painkillers' addiction risks and promoted their benefits.

The lawyers said its marketing created a public nuisance as doctors over-prescribed the drugs, leading to a surge in overdose deaths.

J&J countered that its marketing claims had scientific support and its painkillers accounted for a tiny fraction of opioids prescribed in Oklahoma.

REUTERS

A version of this article appeared in the print edition of The Straits Times on August 28, 2019, with the headline 'J&J ordered to pay $794m in opioid case'. Print Edition | Subscribe