Drug maker to pay $1.6 billion to settle claims over its big role in opioids crisis


The civil justice system has scored a win in curtailing what once was a major maker of much abused and lethal prescription painkillers: Mallinckrodt, a global drug making giant, has agreed to send its opioids-making generics division into bankruptcy as part of a $1.6 billion settlement to settle thousands of opioid damage claims by state and local governments.

As the New York Times reported of the hefty deal:

“The agreement was endorsed by 47 states and U.S. territories along with a committee of lawyers representing thousands of cities and counties … The money, to be paid into a cash trust over eight years, will be used to underwrite the costs of opioid addiction treatments and related efforts across the country … Under the terms of the agreement, the United States division of Mallinckrodt that produces generic opioids would file for Chapter 11 bankruptcy. After a bankruptcy judge approves the restructuring plan, an initial payment of $300 million would be disbursed to plaintiffs to alleviate the opioid crisis, with the remaining $1.3 billion to be paid out over eight years. Other divisions of the company, which has its headquarters abroad and also produces branded drugs, are not filing for bankruptcy. Mallinckrodt is the first opioid company to reach even a tentative national settlement agreement with municipal governments and most of the states.”

Mallinckrodt became a target in the opioid-overdose crisis because of the less-known but huge volumes of generic prescription painkillers its subsidiaries made and shipped, the Associated Press reported:

“[The company] produced the vast majority of painkillers during the height of the overdose epidemic. While they may not have been sending sales representatives to encourage prescribing like Purdue [Pharmaceuticals, makers of oxycontin], they were filling more and more orders for the drugs — so many that Mallinckrodt couldn’t always produce enough to fill them all. Nationwide distribution data released in a sprawling federal court case and analyzed by The Associated Press shows that Mallinckrodt’s U.S. subsidiary, SpecGX, and another generic drug maker, Actavis Pharma, produced the vast amount of prescription opioids distributed throughout the country. From 2006 to 2014, Mallinckrodt’s subsidiary shipped more than 2.2 billion high-potency oxycodone pills, nearly one-third of its total in that time period, according to the data analysis … The court records made public last year by the U.S. District Court in Cleveland showed some Mallinckrodt employees were more focused on sales than public safety.”

In announcing the deal with the drug maker, California Attorney General Xavier Beccera also emphasized this aspect of the settlement: The firm “also agrees that its future generic opioid business will be subject to stringent injunctive terms that, among other things, will prohibit marketing of its opioid products and ensure systems are in place to prevent the drugs from falling into the wrong hands.”

Even with the Mallinckrodt package pending, it is becoming clear, as the New York Times reported separately, that bringing Big Pharma to a full reckoning in the civil justice system will be a bigger challenge, and likely a more sizable disappointment, than some advocates had hoped:

“As talks escalate to settle thousands of opioid-related lawsuits nationwide, a harsh reality is emerging: The money the pharmaceutical industry will pay to compensate ravaged communities will likely be far less than once envisioned. Lawyers on all sides have been stepping up efforts to reach a national agreement before the start of a New York trial next month. But even plaintiff lawyers now believe the payout from dozens of opioid makers, distributors and retailers is likely to be less than half of what the four Big Tobacco companies agreed to pay more than 20 years ago in a landmark settlement with states over costs associated with millions of smoking-related deaths. Whatever the final amount, it will certainly fall well short of what public health experts say is needed to heal the long-term effects of the opioid crisis.”

The newspaper quoted experts as reporting the Big Tobacco payout, a deal struck in 1998, amounted to $206 billion over 25 years, while the total sums to try to address the opioid crisis will be in the range of $75 billion to $100 billion over a span that’s yet to be determined.

That’s far from what would be needed, the newspaper reported:

“Estimates vary wildly over just how much money it would take to finance the treatment and prevention programs, emergency services, law enforcement and other measures needed to fix the problems created by opioids. In October, the federal Council of Economic Advisers said that during the four-year period from 2015 through 2018, the economic toll from opioids was more than $2.5 trillion, including the cost of health care and law enforcement, and estimates of lost productivity.”

Unlike Big Tobacco, where the problem products and the firms making them were few, Big Pharma’s roles and responsibilities — legally speaking — in the opioid crisis were and are many and complex. It will be tougher to assign blame, because so many companies throughout the industry contributed to making many different types and brands of prescription painkillers a leading killer of Americans 55 and younger. Experts have faulted not only drug makers but also distributors, as well as those who were supposed to be corporate watchdogs.

Indeed, though experts have estimates of opioids’ toll, research suggests that the staggering numbers may be understated due to differences in the training and scrutiny of officials across the country who make decisions on issues like the cause of individual deaths.

The New York Times reported this:

“The Centers for Disease Control and Prevention said that from 1999 to 2017, almost 218,000 people died in the United States from overdoses related to prescription opioids. The opioid-related deaths were five times higher in 2017 than they were in 1999, according to the CDC.”

But Elaine Hill and Andrew Boslett, economists at the University of Rochester, have published a new study that suggests that that toll may be too low, partly because of undercounting by coroners as opposed to medical examiners, the Atlantic Magazine reported. Coroners are public officials who may be responsible for deciding an individual’s cause of death, without the training, experience, and expertise, say, of a medical examiner. (The New York Times magazine reports that official agencies dealing with the dead have significant problems that need attention, what the publication calls an “autopsy crisis”).

With modeling based on what researchers know are likely characteristics of opioid abusers, they have run reliable computer studies that show far higher opioid deaths:

“In fact, they estimate in a new study in the journal Addiction, there were more than 99,000 additional opioid deaths from 1999 to 2016 than had been previously documented, raising the national death toll by about 28%, to 453,300. What’s more, the discrepancies varied widely by state. In Alabama, Mississippi, Pennsylvania, Louisiana, and Indiana, Hill and her team estimated that the number of deaths from opioid overdoses was actually double the previous estimates.”

In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damage that can be inflicted on them and their loved ones by dangerous drugs. The opioid crisis took time to develop, and history will show that doctors, nurses, hospitals, insurers, Big Pharma, regulators, politicians, and many others in the health care system deserve their share of the blame for carnage that resulted — and still destroys and takes lives today.

Americans should not and cannot get distracted and numb to the opioid and overdose crisis, even as it morphs into destructive and lethal abuse of synthetic and illicit drugs. The problems have not gone away. They’re destroying families, towns, and swaths of the nation, fed, too, by untreated mental health problems and an inequitable economy that contributes to debilitation and “deaths of despair.”

The opioid crisis also provides what should be the persistent, shocking reminder of how Big Pharma — with its relentless lobbying, advertising, and marketing bankrolled with huge sums extracted from all of us patients — does what it wants, with insufficient and inappropriate checks and balances from regulators or political forces of the small-d democratic kind.

In Washington, D.C., the Trump Administration, federal regulators, and Republicans in Congress have shown either their ineptitude or how they roll over for Big Pharma, not only as officials try to deal with the opioid crisis but also in helping tens of millions of Americans with skyrocketing costs of prescription drugs.

Yet more parties have come forth with evidence how price-gouging harms patients’ health, with as many as a third of respondents in multiple surveys finding that they forego potentially beneficial medications due to costs.

This is unacceptable, as is the unending opioid and overdose crisis. We’ve got a lot of work to do, with much of it likely occurring in the secrecy of polling places for crucial elections in November.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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