A judge in Oklahoma ruled that Johnson & Johnson is liable for intentionally overselling opioid benefits and ordered the company to pay a total of $572 million in the first trial. The state of Oklahoma pursued the first case against multinational corporation Johnson & Johnson following a national public health mishap.
The ruling is pivotal to what lies ahead for 2,000 more lawsuits against Johnson & Johnson from across the country. The company is said to be liable for decades of opioid addiction and even opioid-related deaths in the United States.
The state of Oklahoma was expecting to receive $17.2 billion. However, the amount awarded fell shorter than what the state needs for addiction treatment, rehabilitation, drug courts, and further services that would course through the next 20 years to mend long term damages.
“We would have liked to walk out of here with $17 billion, but we’ve been able to put together a billion dollars,” said Oklahoma Attorney General, Mike Hunter.
A healthcare strategist for Jefferies & Co named Jared Holz said: “The expectation was this was going to be a $1.5 billion to $2 billion fine, $572 million is a much lower number than had been feared.”
Despite the controversy, Johnson & Johnson’s stock rose by 1.44% to $129.64 a share. The $17 billion deficit in the Oklahoma case is minuscule compared to its $81.6 billion sales in 2018.
Judge Thad Balkman of the Cleveland County District Court encouraged lawyers representing states and cities across the country to pursue the legal strategy similar to that of Oklahoma’s. The strategy involved citing a breach in the public nuisance law, which is considered a significant aspect of the trial.
The judge also highlighted the company’s marketing methods. Sales representatives of Johnson & Johnson were trained to avoid mentioning the negative aspects of the drug such as addiction and dependence. They also encouraged physicians to prescribe opioids for patients with moderate to severe pain.
“We’ve shown that J & J was at the root cause of this opioid crisis. It made billions of dollars from it over 20 years. They’ve always denied responsibility and yet at the same time they say they want to make a difference in solving this problem. So do the right thing: Come in here, pay the judgment,” said the lead attorney for the state, Brad Beckworth.
According to the U.S. Centers for Disease Control and Prevention, opioid was responsible for 400,000 overdose deaths from 1997 to 2017. In Oklahoma, some 6,000 residents have died from opioid overdose since 2000.
Since the 1980s, Johnson & Johnson needed a significant amount of opium for its acclaimed pharmaceutical product, Tylenol with Codeine. Later on, the company operated on the island of Tasmania in Australia to grow and process opium.
In 2015, during the height of the opioid epidemic, Johnson & Johnson was the lead supplier in the United States for its raw ingredients for painkillers.
The company has even developed a high strain of poppy called Norman. This strain produced Oxycontin, an effective strain of painkiller. Later on, it became the superstar drug of Purdue Pharma. Purdue Pharma and other major distributors were also blamed for the opioid crisis.
Apart from cases involving opioids, Johnson & Johnson faced lawsuits involving its talcum brand and other flawed products like Xarelto. It was alleged that the former was a precursor to ovarian cancer and the latter caused excessive bleeding in patients.
Johnson & Johnson described the decision in the Oklahoma trial as flawed as it was not able to present satisfactory evidence that the company has indeed violated the public nuisance law.
The company has also defended itself as an opium supplier, stating that it followed state and federal regulations. Moreover, its subsidiaries were sold in 2016 and had no role in marketing the said products.
In a conference after the ruling, a lawyer for Johnson & Johnson, Sabrina Strong said: “You can’t sue your way out of the opioid abuse crisis. Everyone must come together to address this. But J&J did not cause the opioid crisis.”