Opioid Suppliers Rebut Claims in Jury Trial Over Epidemic

(Bloomberg) -- Opioid suppliers including Teva Pharmaceutical Industries Ltd. and McKesson Corp. began their defense of claims the industry is liable for an epidemic of addiction by telling a New York jury there's no proof they did anything wrong.

Drug makers and distributors are accused of misleading doctors and consumers about the health risks of opioid painkillers, or ignored red flags of suspiciously large orders and signs of abuse. The trial of claims by New York state and two Long Island municipalities is the first of thousands of such damage lawsuits filed by governments across the U.S. to be heard by a jury.

“You won't hear evidence from a single doctor that they were duped” about the medicines' risks of addictions, Nancy Patterson, an attorney for Israel-based drugmaker Teva, said in opening comments to jurors Wednesday. “The evidence will show my clients' marketing statements were truthful and consistent with” federal and state law, she said. Teva's opioid-based painkillers, Actiq and Fentora, were made by its Cephalon subsidiary, which it acquired in 2011.

McKesson, a distributor of medications made by others, did “everything they're supposed to do,” the company's lawyer, Paul Schmidt, told the jury. The company didn't market any of the drugs it sold, and only supplied to customers the quantities of opioids that had been approved by government regulators, he said.

New York state and the counties of Suffolk and Nassau are seeking reimbursement for what they spent dealing with the fallout from overdoses and addictions. The public-health crisis has claimed the lives of nearly 500,000 Americans over the last 20 years.

“Everyone in our county has been affected by the corporate greed you are going to see in this trial,” Hunter Shkolnik, Nassau County's lawyer, said during opening statements on Tuesday. The companies “turned a blind eye” to the suffering they caused, he said.

The New York trial poses a big risk for the industry. Analysts predict opioid companies will ultimately be forced to spend tens of billions of dollars combined to resolve thousands of claims. But so far, only one trial has been concluded, when a judge in Oklahoma ruled against Johnson & Johnson and ordered it pay $465 million. That decision is on appeal.

J&J was initially a defendant in the New York case, but agreed on Saturday to pay $263 million to settle the claims.

The companies point the finger at others as the real cause of the epidemic, as they have in other trials. The culprits include drug cartels, pill-mill doctors and lax government enforcement of drug laws, the firms say.

McKesson's Schmidt told the jury that New York officials found in 2016 that the drug distributor “operated a system to identify suspicious orders” as part of a licensing inspection. “They told us we should keep doing what we're doing,” he said.

No Evidence

Teva's Patterson challenged government lawyers to prove by “clear and convincing evidence” that the company's pill-monitoring system failed to pick up questionable opioid orders. The plaintiffs won't be able to show “a single suspicious order” that was shipped by Teva in violation of state or federal law, she said.

While Patterson touted Teva's truthfulness in marketing opioids, its Cephalon unit agreed in 2008 to pay $425 million to resolve a federal probe into illegal marketing of some its drugs, including Actiq. The government alleged Cephalon's off-label marketing campaigns for the medicines prompted a flood of false claims for payment to federal health-insurance programs.

In their opening statements, lawyers for the plaintiffs said drugmakers including Allergan Plc and Endo International Plc sought to capitalize on the buzz created by Purdue Pharma's 1996 introduction of the painkiller OxyContin. That pill is credited by critics including Massachusetts Attorney Maura Healey with helping to spark the U.S. opioid epidemic. Purdue, which sought bankruptcy protection in 2019 to deal with a host of opioid suits targeting its OxyContin marketing, isn't a defendant in the New York case.

Mike Brock, a lawyer for an Allergan unit, said his client didn't get control of its Kadian painkiller until its 2008 merger with Activis Plc and didn't engage in any illegal marketing of the pills. “So we didn't climb on any bandwagon,” he told jurors.

The case is In Re Opioid Litigation, Index no. 40000/2017, Supreme Court of New York, Suffolk County