The Economist UK - 31.08.2019

The EconomistAugust 31st 2019 55

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n 2015 richard sackler, from the bil-

lionaire family that controls Purdue

Pharma, was deposed in a case related to

his company’s alleged use—which it stout-

ly denies—of deceptive marketing to un-

derstate the addictive potential of OxyCon-

tin, its powerful opioid painkiller. The

transcript of that testimony was unearthed

this February, fuelling outrage over Pur-

due’s role in America’s growing opioid epi-

demic. On August 27th the video of Dr

Sackler defending his firm’s flogging of Ox-

yContin and other opioids finally emerged.

This time, though, public fury was soothed

by events of the previous day in Oklahoma.

Judge Thad Balkman found Johnson &

Johnson (j&j) guilty of creating a “tempo-

rary public nuisance” by contributing to

the opioid epidemic which has claimed the

lives of some 6,000 Oklahomans since

2000. He ordered it to pay $572m towards a
      plan to abate the crisis.
      Critics of the opioid-pushers cheered.
      As long ago as 2004, Purdue settled a case
      alleging inappropriate marketing of Oxy-
      Contin with regulators in West Virginia for
      $10m, without admitting guilt. Since then,

observes Elizabeth Burch of the University

of Georgia Law School, nearly all such cases

have been settled, with details of the litiga-

tion remaining under seal. The landmark

trial in Oklahoma, which began in May, has

already revealed the industry’s unsavoury

practices. The prosecutors’ victory throws

open the floodgates to strong legal action

and potentially massive financial penal-

ties. It could do to Opioids Inc what law-

suits over cigarettes did to Big Tobacco.

And the pain may extend beyond drugmak-

ers to distributors and retailers involved in

the opioid trade.

Oklahoma’s attorney-general spent

months locked in a fierce battle with j&jin

a state court over its responsibility for the

local opioid crisis. Yet victory for the prose-

cutors seemed unlikely—which is why j&j

punted on a trial instead of settling with

the state like Purdue and Teva, an Israeli ge-

neric-drug manufacturer, which paid out

$270m and $85m, respectively. Some

scholars were sceptical of the prosecu-

tion’s novel interpretation of what counts

as a public nuisance, a misdeed typically

associated with polluters or owners of

brothels. Moreover, j&jaccounted for only

a tiny share of opioid sales in the state.

Judge Balkman’s verdict therefore came

as a surprise to many. It may discourage

other companies accused of complicity in

the crisis from taking a chance in the court-

room, predicts David Maris of Wells Fargo,

a bank. The first test of this hypothesis will

be a federal case in Ohio, which is due to go

to trial in October. It brings together claims

from around 2,000 local governments and

Native-American tribes. They are gunning

for manufacturers such as j&jand Purdue,

as well as lesser-known but much bigger

opioid producers such as SpecGx and Acta-

vis Pharma (see chart). But they are also go-

ing after big distributors and retailers, in-

cluding upstanding household names like

Pharmaceuticals

Opioids Inc in the dock

NEW YORK

Companies accused of fuelling America’s opioid crisis face a legal reckoning

Opium for the masses

Sources: DEA;Washington Post

United States, number of prescription-opioid

pills sold, 2006-12, bn

Manufacturers

Distributors

SpecGx

28.9

Actavis Pharma

26.5

Par Pharmaceutical

12.0

Purdue Pharma 2.5

Others

6.7

McKesson

14.1

Walgreens

12.6

Cardinal Health

10.7

AmerisourceBergen

9.0

Others

30.3

Business

56 Big Tobacco wants to be bigger

56 EU dr eams of a Vision Fund

57 Bartleby: Management magic

58 Orsted’s tailwinds

59 Schumpeter: Shopify v Amazon

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