Judgements and settlements are starting in Oklahoma against various pharmaceutical companies for their alleged roles in that state’s opioid crisis. During these judgements and negotiations with three major companies, the financial liability potentially ranged from a judgement for more than $500 million in this single state case to negotiations that might reach $10 billion for each company to resolve national claims. In this most recent Oklahoma case, the judge stated that one company “engaged in false and misleading marketing of both their drugs and opioids generally, and the law makes clear that such conduct is more than enough to serve as the act or omission necessary to establish the first element of Oklahoma’s public nuisance law.”
Several aspects of this ruling seem remarkable and perhaps contradictory. From a conventional understanding of a “public nuisance,” this bland-sounding civil offense seems relatively minor and hardly the basis for a significant financial judgement. Police officers may issue fines for a public nuisance offense, which is a ticket with a payable fine that ranges from $100 to $300. From an international perspective, the Indian Penal Code states that a public nuisance “. . . shall be punished with a fine, which may extend to two hundred rupees,” which is equivalent to about $3. Is the severity of the alleged pharmaceutical manufacture’s public nuisance offense consistent with the magnitude of the financial liability in this judgement?
Compared with the tobacco smoking settlement amounts for hundreds of billions of dollars or to the Wall Street analysts’ expectation of a fine up to $5 billion for this case in Oklahoma, this $500 million seems a relatively modest amount to pay. The importance of this initial landmark case is of course significant; however, we need to recognize that nationally more than 2000 additional court cases are still pending. Moreover, the recent Purdue offer to settle its 2000 pending opioid related lawsuits for $10 to $12 billion needs to be recognized.
Since most major pharmaceutical companies and wholesale distributors are defendants in these nationally pervasive cases, how large could the ultimate pool of funds be? If each of these 20 to 30 companies was required to pay even $500 million over 2000 lawsuits the national settlement would be about $10 billion each. The $10 billion from a single company would lead to about $6 million for each of the municipal plaintiffs, which, when multiplied by the 20 to 30 companies with pending lawsuits, would result in hundreds of billions of dollars to distribute.
What is the implication of having hundreds of billions of dollars available for addiction disorders, mental health, and other health care services? Would these be the only beneficiaries of these funds? In 2017, the White House Council of Economic Advisors estimated the national health care costs related to the opioid epidemic to be about $500 billion, but that estimate is of money already spent and does not offer a framework for spending new funds from a settlement with the pharmaceutical companies.
Dr Kosten is Jay H. Waggoner Endowed Chair, Co-Founder, Institute for Clinical and Translational Research, and Professor of Psychiatry, Neuroscience, Pharmacology, and Immunology, Baylor College of Medicine, Houston, TX.
1. Campaign for Tobacco Free Kids. A State-by-State Look at the 1998 Tobacco Settlement 20 Years Later; 2018. https://www.tobaccofreekids.org/what-we-do/us/statereport.