• U.S. opioid-related deaths are
occurring at a rate of more than
160 per day.
• Criminal charges for pharma
manufacturers are not out of the
• Opioid addiction liability
cases are already being tried in
The opioid epidemic devastated families and flattened entire communities. The Yale School of Medicine estimates that deaths are nearly doubling annually: “Between 2015 and 2016, drug overdose deaths went from 33,095 to 59,000, the largest annual jump ever recorded in the United States. That number is expected to continue unabated for the next several years.”
That’s roughly 160 deaths every day — and it’s a count that’s increasing daily.
In addition to deaths, the number of Americans struggling with an opioid
disorder disease (the official name for opioid addiction) is staggering.
The National Institute on Drug Abuse (NIDA) estimates that 2 million people
in the United States suffer from substance use disorders related to prescription
opioid pain relievers, and roughly one-third of those people will “graduate” to
heroin addiction. Conversely, 80 percent of heroin addicts became addicted to
opioids after being prescribed opioids.
As if the human toll wasn’t devastating enough, NIDA estimates that
addiction costs reach “$78.5 billion a year, including the costs of health care, lost
productivity, addiction treatment, and criminal justice involvement.”
With numbers like that, families are not the only ones left picking up the
pieces. Municipalities, states, and the federal government are strained with heavy
demand for social services and crushing expenditures related to opioid addiction.
Despite the amount of money being spent, services are inadequate and too short
in duration. Wait times are so long that some people literally die waiting.
Public sector leaders saw firsthand the range and potency of the epidemic,
and were among the first to seek a legal reckoning with the manufacturers of
Seeking redress for their financial burden, some municipalities, states and
the federal government filed lawsuits against big pharmaceutical companies and
manufacturers. To date, there are more than 100 lawsuits on court dockets.
States such as Ohio, West Virginia, New Jersey, Pennsylvania and
Arkansas have been hit hard by the epidemic.
In Arkansas alone, 72 counties, 15 cities, and the state filed suit, naming 65
defendants. In Pennsylvania, 16 counties, Philadelphia, and Commonwealth
officials have filed lawsuits.
Forty one states also have banded together to subpoena information from
some drug manufacturers.
Pennsylvania’s Attorney General, Josh Shapiro, recently told reporters that the
banded effort seeks to “change corporate behavior, so that the industry can no
longer do what I think it’s been doing, which is turning a blind eye to the effects
of dumping these drugs in the communities.”
The volume of legal actions is growing, and some of the Federal cases have
been bound together in what is called multidistrict litigation (MDL). These cases
will be heard by a judge in Ohio. Plaintiffs hope for a settlement that will provide
funding to be used to help thwart the opioid epidemic.
“From a societal perspective, this is obviously a big and impactful issue,”
said Jim George, a managing director and global claims head with Swiss Re
Corporate Solutions. “A lot of people are suffering in connection with this, and it
won’t go away anytime soon.
“Insurance, especially those in liability, will be addressing this for a long time.
This has been building over five or six years, and we are just now seeing the
beginning stages of liability suits.”
BASIS FOR LAWSUITS
The lawsuits filed to date are based on allegations concerning: What pharma
knew or didn’t know; what it should have known; failure to monitor size and
frequency of opioid orders, misrepresentation in marketing about the addictive
nature of opioids; and false financial disclosures.
Opioid manufacturers, distributors and large drugstore chains together
represent a $13;billion-a-year industry, meaning the stakes are high, and the
pockets deep. Many have compared these lawsuits to the tobacco suits of the ’90s.
But even that comparison may pale. As difficult as it is to quit smoking, that
process is less arduous than the excruciating and often impossible-to-overcome
Francis Collins, a physician-geneticist who heads the National Institutes of
Health, said in a recorded session with the Washington Post: “One really needs
to understand the diabolical way that this particular set of compounds rewires
the brain in order to appreciate how those who become addicted really are in
a circumstance where they can no more [by their own free will] get rid of the
addiction than they can get free of needing to eat or drink.”
The addiction creates an absolutely compelling drive that will cause people to
do things against any measure of good judgment, said Collins, but the need to do
them is “overwhelming.”
Documented knowledge of that chemistry could be devastating to insureds.
“It’s about what big pharma knew — or should have known. A key allegation
is that opioids were aggressively marketed as the clear answer or miracle cure for
pain,” said Shep Tapasak, managing principal, Integro Insurance Brokers.
These cases, Tapasak said, have the potential to be severe. “This type of
litigation boils down to a “profits over people” strategy, which historically has
resonated with juries.”
As suits progress, all sides will be waiting and watching to see what case law
stems from them. In the meantime, insurance watchers are predicting that the
scope of these suits will broaden to include other players in the supply chain
including manufacturers, distribution services, retail pharmacies, hospitals,
physician practices, clinics, clinical laboratories and marketing agencies.
Litigation is, to some extent, about who can pay. In these cases, there are
several places along the distribution chain where plaintiffs will seek relief.
Nancy Bewlay, XL Catlin’s global chief underwriting officer for casualty, said
that insurers and their insureds need to pay close attention to this trend.
“Pharma and its supply chain need
to know that this is here now. It’s not
emerging, it’s here, and it’s being tried.
It is a present risk,” she said.
“We, as insurers who identify
emerging risks, have to communicate
to clients. We like to be on the
forefront and, if we can, positively
influence the outcome for our
clients in terms of getting ahead of
In addition to all aspects of the
distribution chain, plaintiffs could
launch suits against directors and
Opioids were supposed to help.
Instead, their addictive power
harmed many, and calls for
accountability are broadening.
By Mercedes Ott