Oxycontin - Opioid Nightmare Haunts Corporate America
Opioid Nightmare Haunts Corporate America
A new drugs crisis looks set to repeat the drama of the Big Tobacco legal battles of the 1990s
The opioid epidemic has taken hold across the United States, adding another layer to the problem of drug addiction rather than easing pain for cancer patients
All too often, Cleveland is overlooked. Sitting unobtrusively on the banks of Lake Erie, it suffers many of the inner-city woes of the struggling, creaking, industrial Midwest, its fortunes summed up somehow by the miserable travails of the Browns, its NFL team that failed to win even a single game last season and became a laughing stock. Yet suddenly corporate America is taking Cleveland very seriously indeed.
More precisely, it is thinking of the city’s drug addicts. Cleveland is the focal point, the template, for a national opioid addiction that across the United States has cost the lives of an estimated 200,000 people since 1999 while generating billions of dollars in sales for manufacturers, distributors and retailers. That, in turn, has put the city at the centre of a potential re-run of the showdown with Big Tobacco in the 1990s.
The central allegation against opioid manufacturers is that they aggressively and deceitfully marketed their drugs to doctors by playing down their serious addiction risks. Distributors and retailers are accused of selling vast quantities of opioids without raising the alarm to the authorities.
The legal set-to has embroiled some of America’s biggest companies. The likes of Johnson & Johnson, the $330 billion healthcare giant, Walmart, the $250 billion retailer, and Walgreens Boots Alliance, the $64 billion owner of Boots in Britain, are linked with a mammoth opioid addiction case that is playing out in Cleveland.
Last week, Glaxosmithkline, Britain’s biggest drugs maker, was dragged into the furore when it emerged that one of its directors was being sued by the state of Massachusetts over allegations connected with the crisis. Judy Lewent, 69, served on the board of Purdue Pharma, the maker of the opioid Oxycontin and one of the companies at the centre of the scandal, between 2009 and 2014. For this she was paid “hundreds of thousands of dollars”, the state said in a court filing.
Opioids are synthetic drugs derived from the opium poppy and many are more powerful than morphine. Initially they were prescribed only for cancer patients experiencing severe pain, such were doctors’ fears about their addictiveness, but in the mid-1990s manufacturers began marketing opioids aggressively as treatments for moderate to severe chronic pain, such as backache. In 2012, at the peak of the boom, American doctors wrote 282 million prescriptions for opioid painkillers.
Although opioids helped with pain, many patients experienced severe withdrawal symptoms between doses and became hooked. In 2016 alone, 42,000 people died from opioid overdoses, according to the US Centers for Disease Control and Prevention. Last year, President Trump declared a public health emergency.
The Massachusetts lawsuit accuses Purdue, its owners and several directors of creating the opioid addiction epidemic and of profiting from it. “Even when Purdue knew people were addicted and dying, Purdue treated patients and their doctors as ‘targets’ to sell more drugs,” the state alleges. “At the top of Purdue, a small group of executives led the deception and pocketed millions of dollars.”
Massachusetts brought the case after similar claims were filed in May by the states of Nevada, Texas, Florida, North Carolina, North Dakota and Tennessee. All could soon be consolidated into a monster lawsuit in Cleveland.
Judge Dan Polster has been given the task of overseeing a global opioids settlement. In time it could resemble the master settlement agreement with America’s four largest tobacco companies, which in 1998 agreed to pay $206 billion over 25 years and to curtail advertising to settle claims from 46 states for tobacco-related healthcare costs.
The opioid lawsuit ties together at least 433 claims brought by cities, counties, states and Native American tribes against manufacturers, distributors and retailers. Doctors who were paid by manufacturers to be “key opinion leaders” on opioids are also listed as defendants. The first trial is scheduled to take place in March next year, unless an agreement is reached before then.
As well as Johnson & Johnson, manufacturers named in the lawsuit or boasting subsidiaries that are involved in the case include Allergan, the $58 billion Dublin-headquartered American drugs maker, Teva, of Israel, worth $25 billion, and Purdue itself, which is privately owned. America’s “Big Three” distributors, through which an estimated 80 per cent of America’s opioids have flowed, are named in the lawsuit or have subsidiaries that are involved. They are Amerisource Bergen, McKesson and Cardinal Health, which are worth $19 billion, $27 billion and $15 billion, respectively. Then there are the retailers. As well as Walmart and Walgreens, CVS, the $67 billion pharmacy chain, and Kroger, the $24 billion grocery chain operator, are named or have subsidiaries that are involved.
Meanwhile, the makers of opioid addiction treatments are launching new products in the country. Indivior, a FTSE 250 company, makes Suboxone Film and Sublocade. Suboxone Film, an oral treatment, accounts for 80 per cent of Indivior’s $1 billion revenue and had a market share of 57 per cent last year.
Yet even here there is controversy. Some manufacturers of opioid addiction treatments have been accused of lifting prices to profit from the crisis. A study by The New England Journal of Medicine last year found that the price of one injectable treatment had soared from $690 in 2014 to $4,500 in 2016.
Philanthropist family who left their name in the frame
It was only last month that the Sacklers, a family of noted philanthropists, found themselves named in an opioid addiction case for the first time. Several members of the family own and run Purdue Pharma, the maker of Oxycontin, an opioid that has become synonymous with the crisis. The drug is the source of most of the Sacklers’ estimated $13 billion wealth, a fortune that makes them the 19th richest family in America, according to Forbes.
Between 1996 and 2002, Purdue more than doubled its sales force and in 2001 alone spent $200 million marketing and promoting Oxycontin. This helped to push the number of US prescriptions for the drug from 670,000 a year in 1996 to about six million in 2002. One estimate puts total Oxycontin sales at $35 billion.
Mortimer and Raymond Sackler, who died in 2010 and 2017, respectively, each served as chief executive of Purdue. Three of Mortimer’s children — Ilene, Kathe and Mortimer Jr — have served on Purdue’s board. Two of Raymond’s children — Jonathan and Richard — and his grandson David also have served as Purdue directors. All six are named in the Massachusetts claim filed in June, as are Theresa Sackler, Mortimer’s wife, and Beverly Sackler, Raymond’s wife.
Philanthropic donations by Sackler family members have given them naming rights at public spaces across the world. In London there is the Serpentine Sackler Gallery in Kensington Gardens and Sackler Studios at Shakespeare’s Globe, among others. In New York there is the Sackler Wing at the Metropolitan Museum of Art and the Sackler Center for Arts Education at the Guggenheim, among others. There is also the Sackler Wing at the Louvre in Paris.
In 2007, Purdue pleaded guilty to federal criminal charges that it had misled regulators, doctors and patients about Oxycontin’s addiction risk. The Massachusetts claim alleges that Purdue continued its misleading marketing after 2007.
Purdue said in February this year that it would stop marketing its opioids to doctors.
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