September 2, 2019 BARRON’S 11
Whilearecent$572millionrulingagainstJohnson&
Johnsonsetsnoprecedent,pressureappearstobe
growingondrugmakerstosettlelitigation.
The Opioid Reckoning
ByJoshNathan-Kazis
THE DOMINOES ARE STARTING TO FALL IN
theopioidlitigation,andthelatestdevel-
opmentsshouldn’tmakedrugmakersfeel
goodabouttheirchanceswhenthecases
start going to trial.
On Aug. 26, a state court ordered
Johnson&Johnson (ticker:JNJ)topay
Oklahoma$572million,citingmisleading
marketingofpainkillers.Whilethatrul-
ing has little legal applicability to thou-
sandsofotheropioidlawsuits,someex-
pertssayitneverthelesscouldpersuade
other drug producers to settle.
“IfJohnson&Johnson,whichhasthe
reputationofbeingthetoughestlitigator
around, can’t prevail, I think [other de-
fendants] have to really seriously con-
sider”theirposition,saysCarlTobias,a
lawprofessorattheUniversityofRich-
mond School of Law.
Johnson & Johnson says the ruling
“doesnothaveabindingimpactonother
courts” and would not affect how it ap-
proaches federal litigation and lawsuits
in other states.
The Oklahoma decision comes just
over a month before the first scheduled
trial in a sprawling federal court pro-
ceedingoverseenbyJudgeDanPolster
inCleveland,whereahandfulofcompa-
nies are set to face two Ohio counties.
“You’re seeing a flurry of activity,”
saysAndrewPollis,aprofessoroflawat
Case Western Reserve University.
Generic drugmaker Endo Interna-
tional (ENDP)recentlysettledwiththe
twocountiesinthefirstOhiotrial,asdid
Allergan (AGN). Recently, reports
emerged that Purdue Pharma, the fam-
ily-owned seller of OxyContin, had of-
feredtofileforbankruptcy andstrikea
settlementworthupto$12billion.(Pur-
duesaysthata“constructiveglobalreso-
lution is the best path forward.”)
Pollis warns against extrapolating
fromtheOklahomarulingtothemultidis-
trictlitigationoverseenbyPolster,which
pullstogethermorethan2,000individual
cases. The Johnson & Johnson trial was
decidedonthebasisofOklahoma’spublic
nuisance law, which has no bearing on
nearlyallotheropioidcases.“It’sreallya
square peg in a round hole,” Pollis says.
Yet,ColinScarola,asenioranalystat
CFRA Research, argues that the Okla-
homa decision could push defendants to
settle,especiallywiththeOhiotrialsetto
start soon. Scarola says that the Okla-
homajudge’swillingnesstoholdJohnson
&Johnsonliablefortheopioidepidemic,
despitethecompany’spositionthatitfol-
lowedthelawandoperatedwithinastrict
regulatory environment, could spook
other pharmaceutical companies.
It’s as “if you’re a coach, and you’re
planning to play the No. 1 team in a
weekandyou’replanningtousethezone
[defense], and you see another team
playedthemandthezonegotblownup,”
Scarolasays.“Thisprobablynudgesto-
ward a settlement.”
Pollis says the October trial itself
mightnothappenonschedule,especially
ifPurduedoesfileforbankruptcy,which
could throw the multidistrict litigation
proceedings off track. And on Friday,
Ohio’sattorneygeneralpetitionedanap-
peals court to “halt or delay” the trial.
Ifmoresettlementsdocomedownin
the next few weeks, the big question is
which claims they cover, and how much
the companies will pay. Those answers
remainhazy,andareprobablythesource
ofheatedargumentsthisweekbetween
plaintiffs’ lawyers and drug companies.
Therestofusneedtowaitandsee.
The defeat of J&J, one of the drug in-
dustry’s toughest litigators, may make
other opioid makers wary of a trial.
Tomaz Levstek/Getty Images/iStockphoto
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