Post Authored by Yara Mroueh
Purdue Pharma reached a tentative settlement worth billions of dollars to settle thousands of cases brought against it by state and municipal governments alleging that the company was an active participant in the growing opioid crisis. The pending settlement pauses a complicated pending trial which has approximately 2,300 state and municipal governments requesting monetary restitution from Purdue Pharma. Should the settlement go through, Purdue Pharma will file for bankruptcy and divest all of its holdings worldwide.
Three additional major drug distributors and an opioid manufacturer have recently reached a $260-million-dollar settlement with two Ohio counties for their role in fueling the opioid crisis. The settlement avoids what would have been the first federal opioid trial, which would have taken place in the Northern District of Ohio on Monday, October 28th. Following this deal, state’s attorneys representing North Carolina, Pennsylvania, Texas and Tennessee announced that they were close to reaching similar billion-dollar settlements with three drug distributors, and two drug manufacturers.
As seen from these last-minute million and billion-dollar settlements, pharmaceutical companies are in a rush to avoid the risks of a federal trial. Being the first to defend the business practices that led to the current nationwide opioid crisis would have set a precedent, most likely a losing one, on the pharmaceutical industry’s liability. No one wants to be the test case for the legal arguments and evidence launched against it by thousands of municipalities and counties across the country.
So what are the legal arguments being hurled at dozens of pharmaceutical companies? There are 2 major ones:
1. Starting in the mid-1990s, opioid manufacturers pushed a misleading marketing campaign dismissing the concerns and risks of opioid painkillers and embellishing its benefits. The pharmaceutical industry encouraged doctors to overprescribe the pills, which led to patients believing the pills were safe and effective. The lawsuits argue that this marketing push was false advertising, resulting in deadly consequences for hundreds of thousands of vulnerable citizens. The companies knew or should have known that their products weren’t safe and would lead to addiction, yet they continue to market them as safe and effective.
2. Following the misleading marketing push of the 1990s by opioid manufacturers, the opioid distributors ignored data showing that the pills were getting overprescribed and continued to supply massive quantities of opioids. Data shows that counties in Ohio, Pennsylvania, and Indiana were prescribing more bottles of opioids than there were residents. The lawsuits point out that federal and state laws require distributors to manage and control the supply chain to ensure that products aren’t falling into the wrong hands. They argue that opioid distributors knew the opioid crisis was rampant but continued to let the drugs proliferate in the name of profit.
These lawsuits and settlements are not only forcing opioid makers like Purdue Pharma to pay for the opioid crisis they helped cause but are also forcing distributors like CVS and Walgreens to pay up. While we still don’t know how a trial like this would play out, it is clear from the recent flurry of settlements that the pharmaceutical industry is not ready to play its bet and gamble. Thousands of claims are still pending–we are sure to see a landmark trial in the coming years.
About the Author:
Yara Mroueh is an associate attorney at Gordon & Rees, where she focuses her practice primarily in the areas of products and premises liability, insurance defense, toxic tort, and commercial litigation. Yara is active in all phases of litigation, from investigating the facts, settlement negotiations, and pre-trial preparation. As part of her practice, Yara enjoys taking depositions and drafting complex motions in state and federal matters. Yara’s bilingual skills provide her a unique opportunity to connect with clients and achieve the best possible outcome.