Will Fines Change Corporate Culture That Caused Opioid Crisis?

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An Oklahoma judge order Johnson & Johnson (J&J) subsidiary Janssen Pharmaceuticals to pay a $572 million fine to the state for fueling the opioid crisis. This was the first case of its kind to go to trial and could influence similar claims by more than 40 states against the pharmaceutical industry. 

“As a matter of law, I find that defendants’ actions caused harm, and those harms are the kinds recognized by [state law] because those actions annoyed, injured or endangered the comfort, repose, health or safety of Oklahomans,” Judge Thad Balkman wrote in his decision.

NBC news has also reported Purdue Pharma and the Sackler Family have proposed a $10 – 12 billion settlement. In the settlement the Sackler Family would give up ownership of the company and no longer be involved. Purdue Pharma would continue to sell its painkiller OxyContin and an opioid addiction treatment drug approved by last  year. The Sackler Family would pay at least $3 billion of the settlement personally.

Despite the seemingly significant dollar amounts there are those who denounce J&J’s fine and the Purdue/Sackler Family settlement as significant.

In an LA Times Opinion piece, Journalist Kathleen Sharp decries J&J’s fine of $572 million as ”the cost of doing business” compared to the $80 billion the pharmaceutical giant brings in revenue each year. She argues the fine will do nothing to change the company culture of greed which has fueled the opioid epidemic.

On PBS Newshour Jackie Fortier reports that although the multimillion dollar settlement was a significant win, it still fell short of the $17.5 billion the state of Oklahoma was seeking.

A Washington Post article claims the Sacklers could hold on to most of their fortune in the proposed settlement, keeping billions of dollars. The Sackler Family is worth approximately $13.5 billion according to Bloomberg News, making them the 19th richest families in the United States. The family proposed raising the $3 million in which they are personally responsible from the settlement by selling their international drug conglomerate Mundipharma, leaving most of their fortune intact. While Purdue’s $10 billion settlement is less than 1/3 of the estimated $35 billion revenue from OxyContin sales.

“No one is going to be happy after this,” said Adam J. Levitin, a Georgetown Law School professor who studies bankruptcy. “People are going to be mad that the Sacklers aren’t going to jail, that they will have money left.”

The Sackler’s are pressuring plaintiffs to take the settlement or risk Purdue Pharma filing bankruptcy. Plaintiffs would risk receiving a considerably lower settlement if this were to happen. Purdue and the Sackler Family also requires that the settlement covers all possible litigation, not just the consolidated suits set to go to trial in October 2019. Skeptics believe this would be a hard sell to get all the plaintiffs to agree to the settlement.

Sheller PC founder Stephen Sheller and partner Lauren Sheller are honored to be among the private law firms asked to assist the Philadelphia’s Law Department in a lawsuit against opioid manufacturers for the cost the opioid epidemic has had on the city.

Purdue Pharma offers $10-12 billion to settle opioid claims, NBC, Aug 27, 2019

Johnson & Johnson ordered to pay $572 million for its role in Oklahoma’s opioid crisis, Washington Post, August 26, 2019

Sacklers could hold on to most of personal fortune in proposed Purdue settlement, Washington Post, August 31, 2019

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