Judge rules state’s fraud case against opioid manufacturers can proceed

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The ruling means that discovery can now begin in the case, which is likely to include the state subpoenaing internal company documents and records and taking depositions of company officials and employees. DYLAN GOFORTH/The Frontier

NORMAN — A Cleveland County judge ruled Tuesday that most of the state’s civil case against several opioid manufacturing companies can proceed, allowing the state to subpoena internal company documents and take depositions from company officials.

District Judge Thad Balkman ruled against most of the companies’ motions to dismiss the case, which was brought by Oklahoma Attorney General Mike Hunter on June 30 against 18 opioid manufacturing companies and corporate subsidies. Hunter’s case alleges that the companies knowingly fueled the state’s opioid crisis with an aggressive marketing campaign that made false and misleading claims about the dangers of the drugs.

Balkman dismissed one of the state’s claims alleging the companies’s actions violated the Oklahoma Consumer Protection Action on the basis that activities regulated by other government entities are not subject to OCPA claims, but let stand the state’s claims under the Medicaid False Claims Act and the Oklahoma Medicaid Program Integrity Act as well as claims of fraud and unjust enrichment.

The ruling means that discovery can now begin in the case, which is likely to include the state subpoenaing internal company documents and records and taking depositions of company officials and employees.

On Thursday, Balkman declined the state’s request to schedule a trial date for May 2019, but did order a scheduling conference by attorneys to be held on Jan. 11, 2018. Attorneys for the pharmaceutical companies are wanting a trial date set three to four years from now, the state’s lead attorney in the case Michael Burrage said.

Burrage called the ruling a “victory” for the state in its case.

The opioid manufacturers in the case are:

  • Purdue Pharma LP (as well as Purdue Pharma, Inc. and the Purdue Frederick Company).
  • Teva Pharmaceuticals USA Inc (as well as Cephalon, Inc., which was acquired by Teva).
  • Johnson & Johnson (as well as Janssen Pharmaceuticals, Inc. and its related companies, which are under Johnson & Johnson).
  • Allergan, PLC (as well as the associated company Actavis Pharma).

The companies also face similar lawsuits in other jurisdictions that are also in the discovery phase, though Burrage said the state is planning to do its own discovery in the case. The state is also in settlement talks with Allergan, Burrage said.

The state is suing the companies for an unspecified amount, though Hunter has said he hopes the funds from the suit or a settlement will be put in a trust fund similar to the state’s Tobacco Settlement Endowment Trust and used to pay for addiction treatment.

During Tuesday’s four-hour hearing, attorneys for the pharmaceutical companies took issue with the initial petition the state filed in the case and tried to focus Balkman’s attention on issues with it, and the state attempted to rebut those arguments while simultaneously addressing the bigger picture of the companies alleged contributions to the nationwide and state opioid epidemic.

Attorneys for the pharmaceutical companies argued that the claims brought by the state failed to show specific examples where the companies caused Oklahoma doctors to irresponsibly increase opioid prescribing habits for pain management, the state’s jurisdiction was preempted by the Food and Drug Administration’s regulation of the medications and their marketing, that a doctor’s independent judgement and FDA-required labeling warning of addiction risk breaks any chain of causation by the companies, and that the state did not show any specific examples of the company directly convincing doctors to prescribe the drug in an irresponsible manner.

The state’s attorneys, meanwhile, pointed to the large and simultaneous increase in marketing of opioid pain medication beginning with Purdue Pharma and OxyContin in 1996, the increase in treatment using opioids and the number of overdose deaths from opioid drugs in the state and country. In 2016, Oklahoma ranked first in number of milligrams of opioids distributed per adult, said Reggie Whitten, one of the attorneys representing the state.

The state also showed in its exhibits a photo of a poppy field in Tasmania owned by Tasmanian Alkaloids, a subsidiary of Johnson & Johnson (where Whitten said around 85 percent of the world’s opium for prescription medication comes from), a marketing video for OxyContin Whitten said makes a false statement about addiction risk and charts showing payments from the defendants to advocacy organizations acting “front groups” and medical opinion leaders to promote the drugs.

“We allege they acted as a group — they conspired to create a market that wasn’t there and shouldn’t have been there,” Whitten said, regarding pharmaceutical company marketing of opioids for non-cancer pain treatment. “In all these pages of pleading, we’ve answered every question they’ve asked. We’ve alleged they jointly did unbranded marketing, encouraged prescribing when it was not needed, we’ve alleged they funded these front-groups, we’ve alleged they funded these key opinion leaders who told the same lies about opioids. All of these things jointly caused this epidemic.”

When asked by Balkman who exactly was misled by the alleged false statements about opioids, Whitten replied “Every doctor in the state of Oklahoma was lied to.”

Sanford Coats, attorney for Purdue Pharmaceutical, said the wide scope of the state’s filings are not sufficient.

“The state is basically saying every doctor was lied to, every prescription was somehow written as a result of fraud or misrepresentation,” Coats said. “If that’s true, it should be very easy to identify one, two, one hundred.”

Whitten said he expects the companies to try and blame the epidemic on doctors and patients, but that opioid drugs, doctors and addicts have been around for many years, and the opioid epidemic only began relatively.

“Opioids have been around forever,” Whitten said. “They want to blame addicts and sick people — they’ve been around forever. Doctors have been around forever. But we had no epidemic. And the reason we had no epidemic is the American public and the Oklahoma public and Oklahoma doctors had never been lied to like this.

“This was an unprecedented campaign of lies.”

One of the exhibits introduced by Whitten was a letter to the editor of the New England Journal of Medicine written in 1980 by two medical doctors describing a lack of addiction to opioids by a narrow population of specific pain management patients but was cited in more than 800 subsequent scientific papers as solid scientific evidence that addiction to opioid medication is rare.

Steven Reed, attorney for Teva Pharmaceuticals seized on the lack of specifics in the state’s filing, and said the evidence in the state’s petition was not enough to satisfy pleading requirements and the case should be dismissed.

“Which one of us used that study? When did we use it in Oklahoma? To whom did we show it?” Reed asked. “Let them tell us which sales rep for which company showed it to which doctors at what time and, in the case of Cephalon, which of those 245 perceptions (paid for by the state’s Medicaid program) were caused by that letter to the editor.”

“Nobody is disputing the statistics and the seriousness of the epidemic. But this is what they’re required to meet and they simply haven’t done it. They throw around statistics, put up charts that show people are dying. It does not satisfy their pleading,” Reed told the judge.

As Reed spoke, Whitten’s final slide — an animated map of the United States showing the evolving number of opioid deaths (with higher levels reflected in dark red on the map) between 1979 and 2015 — remained on the court’s overhead projector, turning certain points on the map bright red every time the animation reached the “1999-2003” slide, with those red points spreading across the map and turning deep crimson as time progressed.

The map was captioned by the state “Delay = Death for Oklahoma = $ for Defendants.”

Reed said the state was “irresponsible to put this up, put these charts up, and accuse these companies that are developing and selling pain medications approved by the FDA, and used every day hospitals in Oklahoma and around this country … and label us criminals” without supporting specific evidence in the filing.

Additional reading

Opioid drug company at center of national doctor bribery scandal gave tens of thousands to Oklahoma physicians

For opioid crisis in Oklahoma, some look to telemedicine

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Clifton Adcock

Senior Staff Writer

A veteran investigative reporter who has covered eastern Oklahoma for more than 15 years, Clifton joined The Frontier in April 2017. A native of southeastern Oklahoma, he has covered numerous issues from criminal justice to politics for publications including the Tulsa World, the Oklahoma Gazette, and Oklahoma Watch. Clifton holds a master’s degree in journalism from the University of Oklahoma. Clifton can be reached at clifton@readfrontier.com. Follow him on Twitter @cliftonhowze
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