Monte L. MannIn a closely watched case, an Ohio jury found that the nation’s three largest pharmacy chains contributed to the opioid abuse crisis by failing to properly monitor prescriptions. The verdict against CVS Health Corp., Walgreens Boots Alliance Inc. and Walmart Inc. marks a broadening of opioid litigation targets beyond drug manufacturers and distributors to include those involved in the disbursement of medication. In addition to its potential legal repercussions for other cases against retail pharmacies, the verdict may portend a groundswell of lawsuits against health care providers and health systems. 

The Opioid Crisis

The opioid crisis continues to grow. The Centers for Disease Control reported 100,306 drug overdose deaths in the United States for the 12-month period ending in April 2021, a record for a 12-month period. More than 75 percent (75,673) of those deaths were caused by opioids, which over the past two decades have killed more than 500,000 Americans.

The opioid crisis dates to the late 1990s, when health care providers began prescribing painkillers like Purdue Pharma’s OxyContin at significantly higher rates amid claims by drug companies that they carried a low addiction risk. The U.S. Department of Health and Human Services declared a national emergency in 2017, when more than 47,000 Americans died of an opioid overdose. 

Litigation Against Manufacturers, Distributors

Thousands of lawsuits have been filed against manufacturers and distributors, claiming they put profits ahead of safety and engaged in deceptive marketing practices in touting the benefits of opioids while downplaying the associated risks.  

More than 3,300 lawsuits have been filed by states and other municipalities, leading to billions of dollars in settlements. In most lawsuits, the governments have alleged that the defendants were liable under public nuisance statutes for using false, misleading and dangerous marketing tactics to flood their communities with opioids.

However, drugmakers recently scored two significant wins in the opioid litigation arena. In November, a California judge said several of the state’s counties had failed to prove their $50 billion opioid case against Johnson & Johnson, Teva Pharmaceutical Industries Ltd, Endo International PLC and AbbVie Inc's Allergan.

“There is simply no evidence to show that the rise in prescriptions was not the result of the medically appropriate provision of pain medication to patients in need,” Orange County Superior Court Judge Peter Wilson found, in rejecting claims that the manufacturers were legally liable for creating a public nuisance. The judge noted that since California and the federal government determined at the time that the benefit of medically appropriate prescriptions outweighed their harm, the case failed to meet the standard for a legal public nuisance. 

Also in November, the Oklahoma Supreme Court tossed out a $465 million verdict against Johnson & Johnson, which had stemmed from a 2017 lawsuit filed by the state alleging that the company was liable under Oklahoma’s public nuisance statute. In overturning the verdict, the Oklahoma Supreme Court said the lower court erred in allowing the expansive application of the state’s public nuisance law, which is intended for property and land use matters and had never been extended to the manufacturing or sale of products. Such an expansion of public nuisance law could cause widespread litigation against companies for any public health problem. 

Case Against Pharmacies

The public nuisance claim was also used in the case against the pharmacies, which was brought by two Ohio counties and represented the first jury verdict in an opioid case. The jury agreed with the counties, who claimed that, over several years, Walmart, CVS and Walgreens turned a blind eye to red flags and failed to create legally mandated monitoring systems to detect fraudulent prescriptions that could have stopped the flood of opioids into those communities, which resulted in hundreds of deaths and cost the counties about $1 billion apiece. Compensation to the counties will be decided at a later date. 

The repercussions of the decision against the major pharmacies will likely extend beyond other lawsuits against retailers that are currently in progress around the country. The verdict will spur the plaintiff’s bar to eye deep-pocketed health care providers and health systems that wrote a high volume of opioid prescriptions as fertile targets for future litigation. The successful argument that the pharmacies should have had better systems in place to identify red flags and help curtail the public opioid crisis could potentially be employed in cases against organizations responsible for issuing large numbers of prescriptions. 

 

Novack and Macey LLP’s health care practice represents health care providers, insurance agencies, pharmaceutical and medical device manufacturers, and others in complex disputes and litigation. To contact the author, please email Monte L. Mann at mmann@novackmacey.com or call 312.419.6900.