State lawmakers quickly changed the law so that any future settlements would go to the state treasury, to be allocated by the legislature

Here’s What Happened to $829M Oklahoma Was Awarded to Treat Opioid Addiction

The legal fight over who is responsible, and who should pay for the national opioid crisis that has killed thousands of Americans will likely take years.

In 2017 alone, more than 48,000 Americans fatally overdosed on opioids, according to data from the Centers for Disease Control and Prevention — accounting for more than two-thirds of all drug overdose deaths nationwide that year.

States, tribes, and municipalities across the nation, have joined a 2,500 case multidistrict litigation. Oklahoma’s leaders took a different tactic. Rather than join the larger federal litigation state Attorney General Mike Hunter chose to take opioid manufacturers and more recently distributors to state court.

As a result, the state is entitled to $829 million from settlements with drug companies or court orders. But so far, none of the money has been spent on opioid addiction treatment. Here’s where the money stands for each company or group.

Johnson & Johnson
At the conclusion of a seven week-long trial in Norman, Oklahoma District Judge Thad Balkman found Johnson & Johnson liable for helping fuel the state’s opioid crisis and ordered the company to pay $572 million to help meet health and addiction costs incurred by the state. The amount was based on what state lawyers claimed one year of abating the opioid crisis in Oklahoma would cost.

But in a motion filed with the court, lawyers for Johnson & Johnson pointed out that the judge inadvertently added three zeros in one portion of the calculation. They said one category, which would fund neonatal abstinence syndrome treatment evaluation standards, should be $107,600 not the $107.6 million in the judge’s August decision. At a hearing in October, the judge agreed.

Balkman decreased the amount the company owed the state to a one-time payment of $465 million.

His decision could mean the judgment amount will be cut, but the total amount that Johnson & Johnson will ultimately have to pay Oklahoma is unclear.

That’s because both sides have appealed.

Attorneys for the state argue that the judge should maintain jurisdiction over the case and annually review whether the public nuisance has been resolved. That proposed process could result in additional payments to Oklahoma from Johnson & Johnson that could be in the billions of dollars.

Johnson & Johnson’s defense team focused on the question of whether the specific opioids manufactured by the company could have caused Oklahoma’s high rates of addiction and deaths from overdose.

Johnson & Johnson’s lawyer, Larry Ottaway, argued the company’s opioid products had a smaller market share in the state compared to other pharmaceutical companies, and he stressed that the company made every effort when the drugs were tested to prevent abuse. He also pointed out that the sale of both the raw ingredients and prescription opioids themselves are heavily regulated.

“This is not a free market,” he said. “The supply is regulated by the government.”

Ottaway maintained the company was addressing the desperate medical need of people suffering from debilitating, chronic pain — using medicines regulated by the Food and Drug Administration and the Drug Enforcement Administration. Even the state of Oklahoma purchases these drugs, for use in health care services.

The Oklahoma Supreme Court will hear the appeals beginning in spring. The court could overturn Balkman’s order and find in favor of the company, or if they side with the state, the amount the company owes could change significantly, but the state won’t be paid until litigation of the case has ceased.

Purdue Pharma
Oklahoma Attorney General Mike Hunter filed suit in 2017, alleging Purdue helped ignite the opioid crisis with aggressive marketing of the blockbuster drug OxyContin and deceptive claims that downplayed the dangers of addiction.

The drug giant settled with the state in March, about two months before the trial began. The drug giant agreed to pay the state $270 million and Hunter agreed unilaterally to a plan for how the money would be spent.

The vast majority of the settlement about $200 million would pay for an addiction research and treatment center at Oklahoma State University in Tulsa.

Oklahoma lawmakers were furious.

“Rose petals were not strewn in my path,” Hunter acknowledged in a speech before the Bipartisan Policy Council in Washington DC in May. “There was a great consternation with me going around the appropriations process.”

State lawmakers quickly changed the law so that any future settlements would go to the state treasury, to be allocated by the legislature.

The settlement also included $20 million for medicines to be used by patients in the center, $12.5 million for counties and municipalities in Oklahoma and $60 million for legal fees.

Purdue Pharma has paid the state $102.5 million, and the Sackler family has made it’s first of five $15 million payments, but that money isn’t being spent.

OSU officials say that a board is still being formed to head the organization, with no start date in place.

Meanwhile, the federal government is seeking its slice of the settlement. In a June letter, the Centers for Medicaid and Medicare Services

(CMS) stated that because the state relied on decades of Medicaid claims data to help determine the amount of opioid-related damages, the agency is entitled to its share.

Initial documents sent from the state to CMS and obtained by StateImpact estimate that the federal government could be entitled to around $60 million of the Purdue settlement. The state and CMS are continuing discussions.

Hunter’s office claims that the $12.5 million designated for cities and counties will be distributed at a later date after a board has been formed to allocate it.

Teva Pharmaceuticals
The Israel-based pharmaceutical company became the second to settle, just days before they were headed to trial. Teva agreed to an $85 million settlement, leaving Johnson & Johnson as the sole defendant.

Lawyers hired by the state were entitled to $13 million under the terms of their agreement with Hunter’s office.

Because Teva settled after legislators hurriedly changed the law, the remaining $72 million Teva settlement is in the state treasury, waiting to be allocated by lawmakers.

Endo International
In January 2020, Endo International agreed to an $8.75 million settlement to keep them out of court in the state. Oklahoma had threatened litigation, claiming the drugmaker contributed to the opioid crisis by inappropriately marketing its addictive painkillers.

Hunter’s office says the Endo settlement will join the Teva settlement in the state treasury after lawyer’s fees have been deducted.

Opioid Distributors
In January 2020, Hunter announced Oklahoma’s lawsuit suing some of the nation’s largest pharmaceutical drug distributors. The state contends that some of the industry’s titans — McKesson, Cardinal Health, and AmerisourceBergen — helped fuel that state’s opioid crisis by ignoring red flags. Hunter said at a press conference that the companies are liable for an unspecified amount of damages because they should have known big orders of pills were being diverted and abused.

“These companies made billions of dollars by supplying massive and unjustifiable quantities of opioids leading to oversupply diversion addiction and overdose deaths,” he said. “They have blood on their hands.”

The drug distributors have already paid hundreds of millions in settlements to counties and states so far.

Oklahoma is seeking a jury trial, with no trial date set.

7 Responses

  1. anyway, even if all the $$$$$ went to treatment centers, their success rate is what, 5%? Big frigging deal. It’d come to about $50 million per success.

  2. I’m waiting for the billions of dollars that the alcohol makers have to start paying to every state: that crap (which has NO positive use, unlike pain meds) kills a helluva lot more people than ALL opioids (legal & illegal) combined.

    And I’ll be waiting til I make Methuselah look like a youngster.

  3. Our governments allowed both the predatory marketing and the huge financial windfall made by pharmaceutical manufacturers.

    Going after the opioid manufacturers is going to have predictable and catastrophic results. First, very little, if any, of the legal settlements will actually go to help defray the the financial burden associated with treatment of addiction. The move to have costs paid out by the pharmaceutical companies placed in state treasuries was completely forseeable. These legal actions won’t change the fact of addiction, and the resulting impact and limitations on access to opioids will do nothing but harm.

    Yes, Big Pharma preyed on the public with aggressive marketing strategies. But they didn’t create addiction, and the numbers for people struggling with Substance Use Disorders (8-12% of the general population) has remained static for decades.

    We all know that alcohol doesn’t cause alcoholism and that prohibition does not work. Holding the opioid manufacturers responsible for SUD is inaccurate, and is never going to solve the overdose crisis or prevent abuse.

    Our society has to acknowledge that addiction is not caused by substances, but by an unhealthy cilture. Until we provide our children and youth with safe, stable, nurturing, trauma-free environments in which to develop and thrive, substance use to manage severe chronic emotional pain will never change.

    The conflation of Substance Use Disorders and Chronic Pain Conditions continues to do incalculable harm and injury for persons suffering with medical conditions that respond well to opioid therapy. The misdiagnosis, discrimination, medical abandonment, and Human Rights obliteration regarding access to health care and pain management is literally killing the most vulnerable of our population .

    Clearly, the legal financial maneuvering between our governments and the pharmaceutical companies won’t solve the overdose crisis, and not one cent is going to be seen in aid to anyone suffering with the pain and disability of chronic, degenerative, and/or terminal medical conditions.

    I want to hold the parties truly responsible for the “opioid crisis”, and the harm it has caused millions of innocent persons, accountable for their choices and actions. We are not and never have been “unintended consequences”. What is being done to those of us in the greatest need of help us fully known and intentionally dismissed.

    Where is a lawyer with courage who will fight to get the multi-million dollar settlements out if the greedy hands of our political base, and into the hands of the people who have been most harmed and genuinely need and deserve the financial aid… those of us with chronic pain.

    #opioidmyths #PailKills #OpioidsSaveLives #CPASS

    • Well said. It’s just a ‘copy cat’ of tobacco, for the money that will disappear in the exact same way, into selected individual pockets.

  4. IMO Cpps should be expert witnesses for pharmacuetical companies that ma ufacture the meds that provide our QOL!!

  5. What a tangled web we weave when we first practice to deceive.
    So that is how the ‘laundering’ into individual pockets begins.

    “neonatal abstinence syndrome”? Ya give the little Little Tike a maintenance dose for a while and get on with it. It’s not optimal but ya can’t give them Tylenol or make them go ‘cold turkey’.

    Addiction, Diversion and “over-prescribing” are amazingly RARE.

    The PROPER increase in the treatment of severe pain merely paralleled the flood of illicits and dose variable fentanyl.

  6. Im going to try and refrain from profanity but this is bull shit! Im not a lawyer thank god but I want to know how they come up with this figure of 48000 ODs in 2017? Im to believe every overdose was caused by a prescription pill? If the truth mattered im sure out of the 480000 deaths 47500 were caused by heroin fentanyl along with illegal pills. These dirtbags in suits saw another “tobacco windfall” and thats all that mattered. To top off all of this its like chump change to these pharmaceutical companies. Why am I pissed at this you may ask? Because after serious work injury I got 85% of my quality of life back thanks to this drug. Now I get thrown aside,the ones who caused this have carte blanche to drugs,needles rehab god only knows what else..Me? Im back on my couch in pain again. I cant see how the govt could have any chance of winning any of these cases,if the defense of these companies chose to fight this instead of folding like a cheap 3 piece suit

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