Judging the judgment
Johnson & Johnson wins by losing
The recent decision by a state judge to hit Johnson & Johnson with more than a half-billion dollar fine for its part in Oklahoma’s opioid epidemic had something in it for everyone … not to like.
Judge Thad Balkman ruled Monday that J&J created a “temporary” public nuisance by duping doctors into overprescribing its opioid-based medications, and ordered the company to pay $572 million to the state. Oklahoma had sought as much as $17.5 billion in reimbursements for tax dollars spent dealing with an epidemic of addiction and overdoses. (Time)
To put this in perspective, the award is about 3 percent of what the state was demanding—or, considering the more than 6,000 Oklahomans who have died from opioid use since 2000, not to mention the thousands more with horrid, addicted lives because of such drugs, it’s a slap in the face.
Unless it wasn’t.
We’ll get back to that.
Moments after the award was announced, Johnson & Johnson shares rose as much as 5.4 percent, proving that America is still the land of the free and the home of the rapacious.
Read that again. Its shares went up.
In corporate terms, especially for a company like J&J, the penalty was the equivalent of you or me finding two dimes, a penny and some stale Cheetos between the sofa cushions.
Mitigating factors notwithstanding—doctors handing opioids out like candy, patients legitimately needing them for pain—J&J was part of an obscene deluge.
In 2016, enough opioids were prescribed in Oklahoma for every adult in the state to have more than 100 pills. (Integris)
There are about 4 million people in Oklahoma—that’s 400 million pills.
How did all those pills get here?
According to Johnson & Johnson, it was just good, standard marketing.
Mike Hunter, Oklahoma’s attorney general, who brought the suit against J&J (and should be commended for doing so) wasn’t buying it. He believes the company sent an army of sales agent to flood the state to tout not only hyperbolic and false claims about opioids, but also to minimize the risks and convince doctors to over-prescribe them.
Of course, J&J, like every other company involved with the making, distribution and marketing of such drugs, denied doing anything wrong; nevertheless, two other companies, Purdue and Teva, unlike J&J, offered to settle with the state.
Since that state settlement, Purdue—which should have changed its logo to a skull and crossbones—has apparently come to the conclusion its reign of opioid terror is about to end and is trying to find a way out nationally.
The Sackler family would give up ownership of Purdue Pharma, the company blamed for much of the opioid epidemic, and pay $3 billion of their own money under terms of a settlement proposal to resolve thousands of federal and state lawsuits, according to a person familiar with the negotiations. (New York Times)
Why would the Sacklers agree to pay between $10-12 billion (the company would kick in the remaining money) while still maintaining their innocence?
Maybe this is why.
Purdue Pharma has earned more than $35 billion from the sale of OxyContin. (CNBC)
The crisis, nationwide, has cost the United States half a trillion dollars, about 2.8 percent of GDP. More than 33,000 Americans have died due to opioids since 2015, alone—400,000 since 1999—so $12 billion is quite a bargain from that perspective, especially if you get to keep the majority of your wealth and don’t have to spend any time cracking boulders in a hoosegow.
In March of this year, as mentioned, Purdue settled with Oklahoma for $270 million, which seems paltry now, especially when there’s good evidence it pushed its OxyContin brand, the mother of all opioids, with all the subtlety of a carnival barker hawking corn dogs at the state fair.
One could argue—and it’s not a bad argument—that it makes little sense Purdue was allowed to settle for a fine half as large as Johnson & Johnson’s, especially considering J&J’s actual footprint in the state and Purdue’s decades-long lies about what a beast OxyContin was. So horrendous, in fact, was its sleight of corporate hand that more than a decade ago, justice department officials recommended the company not only pay a hefty fine but that its executives spend time in the slammer.
Based on their findings after a four-year investigation, the prosecutors recommended that three top Purdue Pharma executives be indicted on felony charges, including conspiracy to defraud the United States, that could have sent the men to prison if convicted. (New York Times)
Officials in the Bush Administration decided not to pursue criminal charges and, instead, settled the case.
In the world of pharmaceutical campaign contributions—and it wasn’t just to Republicans these millions went—money talks and benzodiazepines walk.
Overall, the family has favored Republican and conservative causes which have received 52 percent of the family’s total contributions. Some family members mostly favor Republicans, while others support Democrats. The overall top recipient of the 12 family members’ contributions was the Republican National Committee (RNC) with $252,700. (OpenSecrets.org)
How unconscionable was Purdue?
“We have in fact picked up references to abuse of our opioid products on the internet,” Purdue Pharma’s general counsel, Howard R. Udell, wrote in early 1999 to another company official. That same year, prosecutors said, company officials learned of a call to a pharmacy describing “OxyContin as the hottest thing on the street — forget Vicodin.” (New York Times)
Another pharmaceutical company, Teva, also settled with Oklahoma—for $85 million—just hours before going to trial. Hunter said Teva created a “public nuisance” through its production and marketing of generic opioids—that public nuisance charge was also levied against J&J. Teva, by the way, is the largest generic opioid manufacturer in the world, so it agreeing to pay $85 million to avoid trial and a possible larger judgement was a particular no-brainer.
It took Teva officials, though, about 14 milliseconds to deny it had done anything wrong.
In a statement announcing the settlement, Teva said the agreement “does not establish any wrongdoing on the part of the company.” Teva also said it “has not contributed to the abuse of opioids in Oklahoma in any way.” (NPR)
Of course it hasn’t.
Considering, then, that Hunter got Oklahoma almost $600 million from Johnson & Johnson is one reason to cheer this settlement.
The question before the judge was how unabashedly J&J pushed its two drugs—the Duragesic pain patch and Nucynta opioid painkiller through its subsidiary, Janssen Pharmaceuticals—to doctors in the state.
Balkman, in his decision, wrote the company downplayed the risks of opioid addiction, and “the state met its burden that the defendants Janssen and Johnson & Johnson’s misleading marketing and promotion of opioids created a nuisance as defined by [the law].”
This was the real kicker:
“Specifically, defendants caused an opioid crisis that’s evidenced by increased rates of addiction, overdose deaths and neonatal abstinence syndrome.”
He ruled against the state, however, in its claim that J&J should pay, and how much, to offset future costs related to treatment and education.
“The state did not present sufficient evidence of the amount of time and costs necessary, beyond year one, to abate the opioid crisis,” the ruling says. (CNBC)
Part of that was perhaps because J&J accounted for less than one percent of the painkillers consumed in Oklahoma. The state responded that while that may have been technically true, the company provided 60 percent of the ingredients in the painkillers it sold to others—like Purdue and Teva.
Unlike those companies, J&J decided not to settle in advance. (One imagines it would have gotten a better deal if it had.) After the verdict was announced, in a surprise to nobody, the company, like Teva, let its dickitude fly.
“We have sympathy for those who suffer from opioid use disorder,” Strong added. “But Johnson & Johnson did not cause the opioid abuse crisis here in Oklahoma or anywhere in this country.” (Washington Post)
Its concern is touching, don’t you think?
We should treat Purdue, Teva, and J&J officials who pushed these drugs on an unsuspecting, if willing, public as harshly as we do the guy arrested behind the BOK for selling three grams of coke. Having said that, what’s up with the physicians who were so ignorant, lazy, and/or seduced by pharmaceutical swag they couldn’t throw the slick-talking, mendacious opioid salesmen out of their clinics for the past decade?
In 2017, Oklahoma providers wrote 88.1 opioid prescriptions for every 100 persons. (National Institute on Drug Abuse)
That’s not the worst part. This is: That figure is an improvement.
[That’s] a 30 percent decline since 2012, when the rate was 127 opioid prescriptions per 100 persons (CDC).
You can’t blame all of that on the spinelessness of doctors and the slick advertising campaigns that featured women in sweatpants looking to rejoin their families again on the beach, if only they could do something about their pain.
Something else has to be going on.
In Psychiatric Times, Dr. Steven A. King writes the problem (and blame) may be even more complicated than presently thought.
In Shakespeare’s Julius Caesar, Cassius says to Brutus, “The fault, dear Brutus, is not in our stars but in ourselves.” When it comes to the opioid epidemic, the fault is not primarily in pharmaceutical companies, unethical physicians, or pain being the fifth vital sign, as many would have us believe. Rather the fault lies primarily in the medical education system that has chosen to place money over science in deciding how and by whom pain management should be taught.
As for the Johnson & Johnson settlement, depending on your level of cynicism, the vial is either half full or half empty. The $17 billion dollars sought by Hunter was always a bit fanciful—even though he’s right about the scope of the future problem—meaning the half-billion dollar judgment he got, if it holds up, is not a bad haul. The second view, much more troubling, is that these awards, especially since they’re not accompanied by criminal prosecution, will be viewed simply as the cost of doing business. American pharmaceutical executives, minus the buried hydrocarbons, often exhibit the moral compass of OPEC oil ministers.
For them, the value of a life—your life—is pennies on the dollar.
And there was this. Of course there was this.
Johnson & Johnson said it would appeal the decision.