There is a lesson to be learned from the tobacco industry.
This article was first published on Monday, May 13, 2019 in MedPage Today.
By Joyce Frieden, News Editor, MedPage Today
WASHINGTON -- Ensuring that drug companies don't have an economic incentive to push their products on patients is one of the big lessons to be learned from the tobacco industry in the wake of the opioid crisis, an expert said here Monday during an opioid litigation event.
"We know that under pressure of profits or the pressure of greed, some people became billionaires selling tobacco and some people became billionaires over-prescribing opioids. How do you change the mindset that says, 'That's a risk worth taking?' That's a place where the political calculus gets the hardest," Matthew Myers, president of the Washington-based Campaign for Tobacco-Free Kids, said during the Bipartisan Policy Center–sponsored event. "But we have to recognize that there is that pressure, and [even] under the best case, there will be people in those corporations who say, 'It's worth it for me.'"
In the first 25 years of the tobacco settlement, companies paid somewhere from $175 billion to $225 billion, he continued, yet it had no impact on shareholders whatsoever. "Profits went up, not down, and therefore, did you really change the incentives of those companies?" Myers said. "Not a single executive was held responsible, so does it change the mentality of an executive as you move forward?"
One of the places where the the tobacco and opioid situation diverge is that the people who caused the opioid crisis are still alive, he said. "In some cases, they're still in the companies making money off of it," Myers said. "In tobacco, by the time these cases came around, the people who made the initial decisions by and large were gone."
While legal tactics can include the creation of guardrails and injunctive relief, Myers said the "most challenging debate that we never have" is figuring out how to change the mindset of companies so they say, "That's not a risk worth taking in the future."
The Bankruptcy Issue
Several lawsuits against opioid manufacturers are currently in process, including one in Oklahoma. That case is scheduled to go to trial on May 28, said Oklahoma Attorney General Mike Hunter. Defendants in that lawsuit include Johnson & Johnson, Allergan, and Teva Pharmaceuticals, but not Purdue Pharma -- maker of oxycodone (OxyContin) -- which settled out of court with the state for $270 million.
Hunter explained how that settlement came about. "As we spent a lot of time with Purdue Pharma, it became clear we had a tough decision to make. Purdue Pharma being a privately held company, bankruptcy was a much simpler, much more elementary proposition for them than for publicly traded companies, and their admonition to us was, 'We are not going to go to trial in Oklahoma.' If I was their lawyer I would have given them the same advice," given all the legal exposure the company would have and their desire to limit their liability, said Hunter.
"There began to be sort of an opportunity; we didn't want to force Purdue Pharma into bankruptcy; that would have stayed our lawsuit and the consequence would have been zero [dollars] for the state," he said. Hunter and his colleagues knew that Purdue didn't want to settle with the state -- since that would have created a precedent for other state lawsuits -- so they came up with an alternative. "What if we were to craft a settlement that would allow you to invest in Oklahoma and a national asset?"
The $270 million settlement included roughly 22% in legal fees but also $200 million toward an endowment to the Center for Wellness and Recovery Program at Oklahoma State University's (OSU) Health Science Center in Tulsa, Hunter explained, which deals with both the opioid epidemic and addiction overall.
"Where we ended up is something we really feel good about," he said.
Hunter said his office chose to stay with an in-state lawsuit, rather than joining in an ongoing multi-state federal lawsuit in Ohio, because "of the very favorable law we have in Oklahoma with regard to abating a public nuisance ... It's a very expansive power that gives [us] the ability as attorney general to go to court, to identify what the nuisance is, and to work with the judge to determine a series of approaches that abates the nuisance."
Big Suit in Ohio
The multi-district federal litigation taking place in Ohio involves nearly 1,600 actions by 200 municipal governments who are suing drugmakers Purdue Pharma and Mallinckrodt, CVS Rx Services, and drug distributor Cardinal Health.
Judge Dan Polster of the U.S. District Court for the Northern District of Ohio in Cleveland, who is presiding over the case, "has been upfront about his view that litigation for years is not the way to resolve this crisis; he has made many comments to the effect that he's [instead] seeking a very aggressive settlement," said Abbe Gluck, JD, faculty director of the Solomon Center for Health Law and Policy at Yale University in New Haven, Connecticut.
"But he's not the only game in town; there are about 400 other cases filed by cities and states, and pending [state] attorney general investigations beyond the state of Oklahoma. Judge Polster doesn't have control over those cases, although he has invited them into his courtroom to negotiate a global settlement," said Gluck.
Oklahoma's case is interesting as it puts pressure for a quick settlement of the federal case (perhaps before May 28), said Gluck, who noted that the monetary "pie" these companies have is limited.
"[Judge Polster] wants to get his hands around that pie, and get as many different parties into that settlement as possible," she added.
What to Do With the Money?
If a settlement is decided on in either of these cases, how should that money be spent? A group of addiction-related organizations, including the Center on Addiction and the Partnership for Drug-Free Kids, has put together a list of recommendations in that area, said Marcia Lee Taylor, MPP, the Center for Addiction's executive vice president for external and government relations. They include:
- Enhancing public and professional education to create a demand for evidence-based solutions to the epidemic. Examples of investment areas include a public education campaign for families to understand the risk factors for kids, creating a consumer guide for opioid treatment, and informing the public about the Parity Act of 2008, which requires insurers to offer mental health and substance abuse benefits that are equivalent to those offered for physical health. "It's important to make sure that gets out there so people can challenge their insurance companies if they're denied coverage they're likely entitled to," she said.
- Increasing activity around prevention and early intervention. Priorities here include consideration of taxation and marketing restrictions for legal opioid products, furthering screening interventions, and referral to treatment -- including educating and incentivizing healthcare professionals -- and taking prevention programs really seriously. "Prevention is too often an afterthought in schools," Taylor said. "Oftentimes, it is a day or two in health class and not using evidence-based approaches."
- Expanding access to evidence-based treatment and integrating treatment into the mainstream healthcare system. "Instead of just pouring dollars into a system that isn't providing quality care, [we need to] make sure we're transforming the system," said Taylor. Examples of solutions in this area include increasing treatment capacity by making sure every healthcare professional has a working knowledge of addiction, and making sure all prescribers have the training required to prescribe medication-assisted treatment, as well as using licensing requirements and payment models to drive quality in care.
"With these recommendations, we really can transform the system and make sure going forward we're better equipped as a country to better handle addiction," she concluded.
“What if we were to craft a settlement that would allow you to invest in Oklahoma and a national asset?”
Oklahoma Attorney General Mike Hunter
Photo credit: northlight / Shutterstock
In the first 25 years of the tobacco settlement, companies paid somewhere from $175 billion to $225 billion, yet it had no impact on shareholders whatsoever.
One of the places where the the tobacco and opioid situation diverge is that the people who caused the opioid crisis are still alive.