NORMAN, Okla./BOSTON (Reuters) – An Oklahoma decide on Monday ordered Johnson & Johnson (JNJ.N) to pay $572.1 million to the state for its half in fueling an opioid epidemic by deceptively advertising addictive painkillers, a sum that was considerably lower than traders had anticipated, driving up J&J’s shares.
The state’s legal professional common had filed the lawsuit, in search of $17 billion to handle the influence of the drug disaster on Oklahoma. It had been thought of a bellwether for different litigation nationwide over the opioid epidemic.
“The expectation was this was going to be a $1.5 billion to $2 billion wonderful,” stated Jared Holz, healthcare strategist for Jefferies & Co. “$572 million is a a lot decrease quantity than had been feared.”
J&J stated it might attraction the choice.
Shares of J&J had been up 2% in prolonged buying and selling following the choice, after an preliminary achieve of greater than 5%. Different drugmakers that promote opioid painkillers and are defending in opposition to comparable lawsuits additionally rose after-hours, together with Teva Pharmaceutical Industries Ltd (TEVA.TA) up 2.6%, and Endo Worldwide Plc (ENDP.O), up 1.four% greater.
Opioids had been concerned in nearly 400,000 overdose deaths from 1999 to 2017, in keeping with the U.S. Facilities for Illness Management and Prevention. Since 2000, some 6,000 Oklahomans have died from opioid overdoses, in keeping with the state’s attorneys.
Roughly 2,500 lawsuits have been introduced by states, counties and municipalities nationally in search of to carry drugmakers liable for opioid abuse nationwide. Oklahoma’s case was the primary to go to trial. Some drugmakers have chosen to settle instances.
In holding J&J liable after a seven-week, non-jury trial, Choose Thad Balkman of Cleveland County District Court docket in Norman, Oklahoma, stated the state proved that J&J’s deceptive advertising and promotion of its Duragesic and Nucynta painkillers created a public nuisance.
“The opioid disaster is an imminent hazard and menace to Oklahomans,” Balkman stated.
Oklahoma needed J&J to assist it tackle the epidemic for the subsequent 30 years by funding dependancy therapy and prevention packages.
Balkman stated in his written ruling that the award lined just one yr of addressing the disaster as a result of Oklahoma didn’t display the time and prices wanted past that.
Lance Lang, a 36-year-old recovering consumer of opioids turned activist in Oklahoma Metropolis, stated it was “quick sighted” for the decide to have solely ordered funding for a yr. “There’s going to be individuals scuffling with this for years,” he stated in an interview.
J&J stated it’s going to ask that the award be placed on maintain throughout an attraction course of that might stretch into 2021. The corporate additionally stated Oklahoma failed to indicate that its merchandise and actions had created a public nuisance.
“You’ll be able to’t sue your approach out of the opioid abuse disaster,” Sabrina Robust, a lawyer for J&J, stated at a information convention after the decision. “Everybody should come collectively to handle this. However J&J didn’t trigger the opioid disaster.”
“ACCOUNTABLE FOR DEATHS AND ADDICTIONS”
The case was introduced by Oklahoma Legal professional Normal Mike Hunter, who alleged that J&J’s advertising practices helped gasoline the opioid epidemic by flooding the market with painkillers.
“Johnson & Johnson will lastly be held accountable for hundreds of deaths and addictions brought on by their actions,” Hunter stated.
The trial got here after Oklahoma had resolved claims in opposition to OxyContin maker Purdue Pharma LP in March for $270 million and Teva in Could for $85 million, leaving J&J because the lone defendant.
The decision got here as two Ohio counties put together for a scheduled October trial earlier than a federal decide in Cleveland. About 2,000 lawsuits out of some 2,500 filed nationwide are consolidated within the case in Cleveland.
Some plaintiffs’ attorneys have in contrast the opioid instances to litigation by states in opposition to the tobacco business that led to a $246 billion settlement in 1998.
Joe Rice, a lead plaintiff’s legal professional for municipalities within the federal litigation, stated if the Oklahoma award had been extrapolated to different states, it might imply an annual abatement price of round $38 billion.
“It does point out that if I’m within the pharmaceutical enterprise, I’ve bought to assume lengthy and onerous about annual funds of my share of that,” he stated.
The decide overseeing the federal litigation in Ohio has been pushing for a worldwide settlement.
J&J, which is amongst a number of pharmaceutical corporations which can be defendants within the federal litigation, stated it stays “open to viable choices” to resolve the Ohio case, together with via settlement.
In the course of the Oklahoma trial, attorneys for the state argued that J&J carried out a years-long advertising marketing campaign that minimized the painkillers’ dependancy dangers and promoted their advantages.
The attorneys referred to as J&J an opioid “kingpin” and argued that its advertising created a public nuisance as docs over-prescribed the medicine, resulting in a surge in overdose deaths.
J&J countered that its advertising claims had scientific help and its painkillers accounted for a tiny fraction of opioids prescribed in Oklahoma. The corporate stated in a press release that since 2008, its painkillers accounted for lower than 1% of the U.S. market, together with generics.
Teva stated the ruling supported its rationale for settling the case earlier than trial, and stated it was making ready to defend itself within the upcoming trial in Ohio.
Purdue, which can be among the many defendants within the Ohio litigation, didn’t instantly reply to a request for remark.
Reporting by Heide Brandes in Norman, Oklahoma, and Nate Raymond in Boston; Further reporting by Julie Steenhuysen in Chicago and Jonathan Stempel in New York; Writing by Tom Hals; Enhancing by Noeleen Walder, Invoice Berkrot and Leslie Adler