There are multiple media reports that Purdue Pharma, the company whose actions fuelled the opioids crisis, is poised to settle federal and state lawsuits in the United States in a deal worth as much as US$12-billion.
News of the settlement (albeit far from a done deal) comes just days after consumer giant Johnson & Johnson was ordered to pay the state of Oklahoma US$572-million in penalties for overstating the effectiveness and understating the risk of addiction from opioids.
After years of soaring death counts and mounting health and social costs related to opioids, it looks like the reckoning has begun.
But before we get too excited about justice being done, we should ask ourselves some important questions:
- Will the settlement money go to those who need it most?
- Will consumers of prescription drugs – and pain medication in particular – be better off?
- Do multibillion-dollar settlements actually deter evil-doing?
In other words, will ordering opioid-makers to pay the price (or at least a small price) for the carnage wrought actually prevent similar public-health disasters in the future?
The proposed settlement does not mean the Sacklers – the family that owns Purdue – will end up in jail or in the poor house.
Purdue will not even cease operations. Rather, the private company would declare bankruptcy and become a “public beneficiary trust” in which the family is no longer involved.
Purdue would continue to sell drugs – including the painkiller OxyContin – but future profits would go to plaintiffs: states, cities, towns and Native American tribes. They could spend the money as they see fit.
Purdue, according to the media reports, is holding out for a master settlement, which means it and other opioid-makers (who would have to put more money in the pot) would be shielded from further lawsuits.
In 1998, the largest master settlement ever, a US$246-billion, 25-year deal, was signed with four large tobacco companies.
Since then, cigarette-makers have paid out more than US$100-billion but, arguably, with little impact. Most states invested modestly in anti-smoking efforts and simply absorbed the money into general revenues.
Smokers are still smoking and dying of tobacco-related illnesses.
Similarly, there is little doubt the opioid-overdose crisis, which still claims about 130 lives daily in the U.S., will continue largely unaffected by the payouts.
Pain sufferers won’t be any better off. Nor will the loved ones of the roughly 220,000 Americans (and 20,000 Canadians) who have died of overdoses since OxyContin hit the market in 1996 see any financial compensation.
In many ways, paying a few million or billion dollars to settle lawsuits has become an everyday cost of doing business for drug companies.
GlaxoSmithKline paid US$3-billion for making unapproved claims, principally about the antidepressants Paxil and Wellbutrin. Marketing Bextra for unapproved uses cost Pfizer US$2.3-billion. Merck forked over US$830-million when it turned out its blockbuster pain drug Vioxx caused cardiac problems. AstraZeneca was on the hook for US$647-million because users of the antipsychotic Seroquel developed diabetes. And there are many more examples of fines and lawsuit settlements of this magnitude.
Even Purdue was fined US$600-million for its over-aggressive marking of OxyContin way back in 2007, but it was hardly deterred.
It’s worth noting too that when Johnson & Johnson was ordered to pay US$572-million for helping fuel the opioid epidemic in Oklahoma, its stock prices actually rose, because investors saw that as a relatively light penalty.
In Canada, pharmaceutical regulators and governments are far less aggressive in using the courts to seek redress, and our courts operate at a glacial pace.
For example, on the tobacco file, there was no class-action settlement until almost two decades after the U.S. one, and the $15-billion award from the Quebec courts is still under appeal.
On opioids, B.C. has taken the lead but other provinces are limping slowly toward filing lawsuits. By the time they do, it’s unlikely Purdue will have any money to pay out.
But, of course, getting blood from a stone shouldn’t be the goal. What is required is better post-approval surveillance of drugs and how they impact patients in the real world, and far more aggressive action when problems crop up.
That we are acting 20 years after it became clear that the marketing of OxyContin was problematic is a testament to the failure of the current approach.
Our Morning Update and Evening Update newsletters are written by Globe editors, giving you a concise summary of the day’s most important headlines. Sign up today.