Pharmaceutical Companies Are Paying for the Effects of the Opioid Crisis

By: Sari Richmond

edited by: Jack Pacconi and Clark Mahoney

From 1991-2021, the opioid crisis killed almost 645,000 people through both illicit means and through prescriptions.[1] Earlier in the epidemic from 2007-2017, suits were geared against opioid manufacturers like Purdue Pharma, responsible for the creation of OxyContin. These cases were mainly personal injury suits created by addicted users who overdosed; legal representation would often argue that packaging and advertising were misleading, there were no tamper-resistant mechanisms, and companies were purposefully withholding information about how the drugs were designed to be used.[2] However, these personal injury suits were often difficult to win, especially when juries were used to assess whether the drug and drug company itself was at fault versus the user. Many jurors found it difficult to convict a drug company or distribution company if the Food and Drug Administration (FDA) had approved the drug, and often the consensus was that doctors and prescribers were responsible for arming patients with information about the prescription opioid drugs to prevent addiction. Moreover, jurors found it difficult to convict a company over singular addicts whose lifestyles were unsympathetic or who had risky behaviors in the past.[2] Over time, as the population impacted by the crisis grew and more cases were documented across a more diverse range of people, jurors found more plaintiffs to sympathize with—coupled with the emergence of babies being born with health issues by parents addicted to opioids. Following this upturn was a myriad of suits filed by the federal government, cities, states, and districts across the country.[2]

An example of larger government suits aimed at holding opioid manufacturers, distributors, and pharmacy dispensing companies accountable for their role in the epidemic is the recent settlement agreement between The City of Philadelphia and Walgreens. In April 2024, the city announced that a $110 million settlement would be paid by Walgreens in response to the 2021 suit filed. The original suit claimed that Walgreens had not adequately monitored suspicious orders for prescribed pain medication and had freely dispensed highly addictive substances without ensuring that the prescriptions were valid.[3] The official settlement agreement claims that Walgreens broke the law for “failing to monitor, report, and abstain from shipping allegedly suspicious orders of opioid pain medications, and dispensing opioid pain medications without confirming those prescriptions were issued for a legitimate medical purpose.”[4] Walgreens denied any wrongdoing, and both parties agreed to settle in order to avoid the expense and confusion of litigation.[4] Philadelphia plans to use the $110 million in a variety of ways to help the city heal from the impact of the crisis. At least $88.3 million will be "compensatory remediation" to directly address the damage allegedly caused by Walgreens’ mishandling of drugs in the case. The remaining $21.7 million will reimburse the city for its costs in pursuing the case.[5] 

Prior to this settlement, many other states and cities have settled with companies including CVS and drug makers Teva and Allergan.[3] San Francisco, Illinois, Texas, Florida, and Nevada have received the most substantial payouts from assortments of drug companies and distribution chains. Similar to the plans announced by Philadelphia, each state and city has its own ideas of how to best use the settlement funds to benefit members of the community and restore funds to the government. In Nevada, about $98.1 million will be used to help finance opioid recovery programs through the state Department of Health and Human Services.[6]  

Throughout these cases, similar approaches were used when governments filed cases against firearm and tobacco companies.[2] The first strategy was often used in firearm cases when it was alleged that oversaturation of the market by a product without implementing proper control over distribution would lead to black market sales being made. This was argued in tandem with the idea that drug companies must have known that the volume of drugs being produced could not only be satiating rightfully prescribed patients.[2] The second approach used was a frequent fraud claim that deemed drug companies’ business practices deceptive, a proven effective strategy when battling tobacco companies. Under consumer protection laws, governments alleged that these companies made misleading comments about how addictive these drugs truly were, and that this was done purposefully to mislead prescribers and consumers alike. Alongside this idea of poor business practices, governments argued that these drug companies failed to adhere to the federal Controlled Substances Act, which requires tracking and appropriate reporting for suspicious orders. Though this strategy was eventually successful, it was considerably more difficult to prove than in previous tobacco suits where leaked evidence showed high-level employees explicitly seeking to understate its addictiveness and manipulate nicotine levels in the product. In the opioid cases, lawyers were mainly working with evidence obtained through investigative reporting, some statements from previous smaller settlements, and the idea that marketing strategies remained consistent despite increasing evidence of opioids’ addictive and harmful properties.[2] Finally, it was argued that the practices of these companies actively cost city, county, and state governments excessive amounts of money. This strategy was wildly more successful in this instance than in cases concerning tobacco or firearm companies because it was easier to show the government was burdened with medical and law-enforcement costs. Moreover, government funding for unnecessary prescriptions under public insurance programs directly fed into drug companies’ profits.[2] 

Overall, the evolution of suits against drug production and distribution companies as well as distribution facilities like pharmaceutical chains has morphed as the impact of the opioid epidemic has morphed. Starting from personal injury cases that struggled to gain traction against juries who oftentimes had issues discerning fault between consumers, prescribers, producers, and distributors, legal success against drug companies has come a long way. Employing strategies used in cases against tobacco and firearm companies to prove the drug companies’ purposeful misleading of the public throughout the crisis, failure to monitor oversaturation and unnecessary prescription of the products, and impact on government funds, payouts have begun to settle across many cities, counties, and states. These settlements have begun funding programs to repair communities on multiple levels and repay governments for losses accrued throughout the past few decades.    

Notes:

1. “Understanding the Opioid Overdose Epidemic | Opioids | CDC.” n.d. Centers for Disease Control and Prevention. Accessed April 21, 2024.

2. “Drug Companies' Liability for the Opioid Epidemic.” 2020. NCBI.

3. “Philadelphia to Receive 110 Million Settlement from Walgreens in Lawsuit Over Opioid Crisis.” Accessed April 21, 2024. Gazett Extra. 

4. n.d. Wikipedia. Accessed April 21, 2024.

5. “Walgreens Inks 110M Deal to End Philly Opioid Crisis Suit.” 2024. Law360.

6. “Nevada secures $285 million opioid settlement with Walgreens, bringing total settlements to $1 billion.” 2023. PBS. 

Bibliography:

n.d. Wikipedia. Accessed April 21, 2024. https://www.phila.gov/media/20240419103742/Complete_with_DocuSign_Execution_Copy_Philad.pdf.

“Drug Companies' Liability for the Opioid Epidemic.” 2020. NCBI. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7479783/.

“Nevada secures $285 million opioid settlement with Walgreens, bringing total settlements to $1 billion.” 2023. PBS. https://www.pbs.org/newshour/health/nevada-secures-285-million-opioid-settlement-with-walgreens-bringing-total-settlements-to-1-billion.

“Philadelphia to Receive 110 Million Settlement from Walgreens in Lawsuit Over Opioid Crisis.” Accessed April 21, 2024. Gazett Extra. https://www.gazettextra.com/news/nation_world/philadelphia-to-receive-110-million-settlement-from-walgreens-in-lawsuit-over-opioid-crisis/article_99146e33-7847-5ac3-9277-25854299eb41.html.

“Understanding the Opioid Overdose Epidemic | Opioids | CDC.” n.d. Centers for Disease Control and Prevention. Accessed April 21, 2024. https://www.cdc.gov/opioids/basics/epidemic.html.

“Walgreens Inks 110M Deal to End Philly Opioid Crisis Suit.” 2024. Law360. https://www.law360.com/articles/1827618/walgreens-inks-110m-deal-to-end-philly-opioid-crisis-suit.