An Oklahoma judge ruled against Johnson & Johnson in the state’s opioid case.

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Johnson & Johnson hit by landmark ruling

An Oklahoma judge ruled against Johnson & Johnson in the state’s opioid case, forcing the company to pay $572 million in the first ruling in the U.S. holding a drugmaker accountable for helping fuel the epidemic.

Calling the opioid crisis an “imminent danger and menace,” District Judge Thad Balkman said, “the state met its burden that the defendants Janssen and Johnson & Johnson’s misleading marketing and promotion of opioids created a nuisance as defined by [the law],” including a finding that those actions compromised the health and safety of thousands of Oklahomans.

“Specifically, defendants caused an opioid crisis that’s evidenced by increased rates of addiction, overdose deaths and neonatal abstinence syndrome,” he added.

 Johnson & Johnson hit by landmark ruling

The $572 million judgment against J&J covers one year of costs under the state’s plan to combat the crisis, even though the attorney general’s office presented several witnesses who said it would take at least 20 years to carry out. “The state did not present sufficient evidence of the amount of time and costs necessary, beyond year one, to abate the opioid crisis,” the ruling says. The fine was significantly less than the penalties sought by Oklahoma, sending J&J’s stock up by about 2% in post-market trading after the verdict was read. Investors were expecting J&J to be fined between $500 million and $5 billion, according to Evercore ISI analyst Elizabeth Anderson. The outcome of the case is being closely watched by plaintiffs in about 2,000 opioid lawsuits due to go to trial in Ohio in October, unless the parties can reach a settlement.

How did Johnson & Johnson defend itself?

The state’s case rested on a “radical” interpretation of the state’s public nuisance law, Johnson & Johnson said. The company said in a statement that since 2008, its painkillers had accounted for less than 1% of the US market, including generics. “The decision in this case is flawed. The State failed to present evidence that the company’s products or actions caused a public nuisance in Oklahoma,” it said. “This judgement is a misapplication of public nuisance law that has already been rejected by judges in other states.”

 Johnson & Johnson hit by landmark ruling

“We do not believe that the facts or the law supports the decision today. We have many strong grounds for appeal, and we intend to pursue those vigorously.”

The company added that it wants the fine to be put on hold during its appeal process, which could last until 2021.

What reaction has there been to the verdict?

The Oklahoma case was brought by the state’s Attorney General, Mike Hunter. “Johnson & Johnson will finally be held accountable for thousands of deaths and addictions caused by their actions,” he said after the ruling. “There’s no question in my mind that these companies knew what was going on at the highest level, they just couldn’t quit making money from it and that’s why they’re responsible.”

One Oklahoma state attorney, Reggie Whitten, told US reporters: “This is very personal to all of us. My partner lost a niece to this opioid epidemic. I lost my firstborn son to the opioid epidemic.”The company’s share price rose following the ruling because investors had been expecting a much bigger fine

 

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