Johnson & Johnson Ordered to Pay $572 Million in Landmark Opioid Trial

Oklahoma pursued the first case against a drug manufacturer for the national public health disaster, and the ruling may point to what lies ahead in 2,000 more lawsuits.

New York Times By: Jan Hoffman

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A judge in Oklahoma on Monday ruled that Johnson & Johnson had intentionally played down the dangers and oversold the benefits of opioids, and ordered it to pay the state $572 million in the first trial of a drug manufacturer for the destruction wrought by prescription painkillers.

The amount fell far short of the $17 billion judgment that Oklahoma had sought to pay for addiction treatment, drug courts and other services it said it would need over the next 20 years to repair the damage done by the opioid epidemic.

Still, the decision, by Judge Thad Balkman of Cleveland County District Court, heartened lawyers representing states and cities — plaintiffs in many of the more than 2,000 opioid lawsuits pending across the country — who are pursuing a legal strategy similar to Oklahoma’s. His finding that Johnson & Johnson had breached the state’s “public nuisance” law was a significant aspect of his order.

Judge Balkman was harsh in his assessment of a company that has built its reputation as a responsible and family-friendly maker of soap, baby powder and Band-Aids.

In his ruling, he wrote that Johnson & Johnson had promulgated “false, misleading, and dangerous marketing campaigns” that had “caused exponentially increasing rates of addiction, overdose deaths” and babies born exposed to opioids.

Sabrina Strong, a lawyer for Johnson & Johnson, one the world’s biggest health care companies, said, “We have many strong grounds for appeal and we intend to pursue those vigorously.”

Johnson & Johnson, which contracted with poppy growers in Tasmania, supplied 60 percent of the opiate ingredients that drug companiesused for opioids like oxycodone, the state argued, and aggressively marketed opioids to doctors and patients as safe and effective. A Johnson & Johnson subsidiary, Janssen Pharmaceuticals, made its own opioids — a pill whose rights it sold in 2015, and a fentanyl patch that it still produces.

Judge Balkman said the $572 million judgment could pay for a year’s worth of services needed to combat the epidemic in Oklahoma.

“We would have liked to walk out of here with $17 billion, but we’ve been able to put together a billion dollars,” Oklahoma’s attorney general, Mike Hunter, said at a news conference on Monday. He was referring to the cumulative amount from the Johnson & Johnson judgment and previous settlements with two other drug manufacturers that produce opioids. Earlier this year, Purdue Pharma and Teva Pharmaceuticals agreed to pay $270 million and $85 million, respectively.

As a consequence of the settlements, Oklahoma faced the steep climb of pinning the blame for its opioid crisis mainly on just one defendant.

“We’ve shown that J & J was at the root cause of this opioid crisis,” said Brad Beckworth, the lead attorney for the state. “It made billions of dollars from it over a 20-year period. They’ve always denied responsibility and yet at the same time they say they want to make a difference in solving this problem. So do the right thing: Come in here, pay the judgment.”

The case was also closely watched by some two dozen opioid makers, distributors and retailers that face more than 2,000 similar lawsuits around the country. Also on Monday, the health news website STAT said that the Kentucky Supreme Court let stand an earlier ruling to release documents related to Purdue Pharma’s marketing of the opioid OxyContin. STAT had filed a motion in March 2016 to unseal the documents.

In a statement about the Oklahoma case, Michael Ullmann, the general counsel and executive vice president of Johnson & Johnson, referring to the company’s pharmaceutical subsidiary, said that “Janssen did not cause the opioid crisis in Oklahoma, and neither the facts nor the law support this outcome.

“We recognize the opioid crisis is a tremendously complex public health issue,” he said, “and we have deep sympathy for everyone affected.”

[“The Weekly,” our new TV show, examines why a confidential government document containing evidence so critical it had the potential to change the course of the opioid crisis was kept in the dark for more than a decade.]

The stocks of Johnson & Johnson and other opioid manufacturers rallied briefly in after-hours trading after the news, perhaps because some had anticipated a judgment of $1 billion or more. Johnson & Johnson stock was up about 4 percent in after-hours trading on Monday evening, and the stocks of Endo International, Mallinckrodt and Teva Pharmaceutical Industries all briefly spiked after the decision, although some fell again.

Oklahoma has suffered mightily from opioids. Mr. Hunter has said that between 2015 and 2018, 18 million opioid prescriptions were written in a state with a population of 3.9 million. Since 2000, his office said, about 6,000 Oklahomans have died from opioid overdoses, with thousands more struggling with addiction.

To calculate the Oklahoma award, Judge Balkman relied on the state’s detailed estimates of what it would cost to remediate the effects of the opioid epidemic. The state said it would need $893 million a year, or about $17 billion over 20 years.

The state’s case was argued by private lawyers whose sense of urgency was driven by personal tragedy — among them, they had seen a son, a business partner and friends succumb to opioids.

On the eve of trial, the lead attorney, Mr. Beckworth, of Austin, Tex., almost dropped out because his wife had just begun chemotherapy for breast cancer, but he said she urged him to stick with the case he “had been born to try.” “If you have an oversupply,” he said in his opening argument, “people will die.”

Reading a summary of his decision in court in Norman, Okla., Judge Balkman said Johnson & Johnson had an outsize impact on the state’s epidemic, though its share of opioid sales was scarcely 1 percent of the market.

“The critical finding is that Johnson & Johnson engaged in false, deceptive and misleading marketing,” said Abbe R. Gluck, who teaches health policy and law at Yale Law School.

From 2000 through 2011, members of Johnson & Johnson’s sales staff made some 150,000 visits to Oklahoma doctors, focusing in particular on high-volume prescribers, the state said. In addition, the pharmaceutical giant supplied most of the nation’s opioid material to other drug manufacturers, refined by one of its companies from a variety of poppy that Johnson & Johnson developed and grew in Tasmania.

Johnson & Johnson, represented by Larry D. Ottaway, an Oklahoma lawyer, argued its case with an eye toward appellate courts. Indeed whether Judge Balkman’s verdict will survive scrutiny is uncertain: State and possibly federal appeals judges may take a skeptical view of the state’s legal theory and the extent of the company’s liability.

During the trial, Johnson & Johnson said blame for the epidemic could not fairly be placed on one company with such modest sales, whose drugs were approved and strictly regulated by state and federal agencies.

Johnson & Johnson said that the state could not show how Oklahoma’s problems, which the company said arose from the diversion of hydrocodone and oxycodone, could be linked to Janssen, which did not make those drugs. It cited black-box warnings on Duragesic, its fentanyl patch, which cautioned about the potential for abuse and addiction. And it said the state had not identified any doctor who had been misled by the company about the dangers of opioids.

But Judge Balkman wrote that he was persuaded by the state’s legal theory. The judge found that Johnson & Johnson perpetuated a “public nuisance,” substantially contributing to an ongoing public health crisis that could take decades to abate.

Public nuisance laws are usually applied in cases where something interferes with a right common to the general public, traditionally roads, waterways or other public areas. Recently, plaintiffs have used the laws to press claims involving lead paint, guns or water or air pollution, with mixed results. Oklahoma’s public nuisance statute is relatively broad, and the state argued that Johnson & Johnson substantially interfered with public health.

Johnson & Johnson’s lawyers contended that the state was contorting public nuisance law to the point of being unrecognizable.

Lawyers representing more than 2,000 cities, counties and other jurisdictions with opioid cases pending in federal court were cheered by Judge Balkman’s ruling. In a statement, they said: “While public nuisance laws differ in every state, this decision is a critical step forward.”

Judge Balkman’s ruling comes only two months before the first federal opioid trial is to begin in Cleveland, brought by two Ohio counties against an array of manufacturers, distributors and pharmacies.

Now that the value of the Oklahoma case has been determined, settlement negotiations may quicken between industry defendants and two large groups of plaintiffs — one, representing thousands of cities and counties, consolidated in federal court in Cleveland, and the other, a coalition of states.

But the nearly two-month Oklahoma trial, which began on May 28, was also singular in some ways. Judge Balkman, an elected jurist and former state legislator, presided over the case. By contrast, much of the forthcoming Ohio trial, which includes other claims, will be heard by a jury.

Also, the pending federal case in Ohio involves numerous defendants, while Oklahoma made its case in court against just Johnson & Johnson.

The level of proof required by the state to back up its allegation that Johnson & Johnson was the “kingpin” of the opioid epidemic required that it demonstrate that the company was responsible for most of the opioid-related damage — from criminal justice to health care, foster care and treatment facilities.

The state said that the company aggressively promoted the safety of opioids generally, through campaigns tailored for women, teenagers and veterans. It said the company engaged with “front groups” of pain patients and pain medicine specialists, who insisted the drugs were effective for quotidian pain and minimized the risk of addiction.

“Judge Balkman has affirmed our position that Johnson & Johnson maliciously and diabolically created the opioid epidemic in our state,” Mr. Hunter said.

Katie Thomas contributed reporting.