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Oklahoma Judge Orders Johnson & Johnson To Pay $572 Million Fine For Contributing To Opioid Crisis

by Nathan Yerby |  ❘ 

Oklahoma Gives Johnson & Johnson a Record Fine

On August 27, Judge Thad Balkman of the Cleveland County District Court ordered the multinational corporation Johnson & Johnson to pay the State of Oklahoma a $572 million fine for deceptively marketing opioids. Judge Balkman’s decision follows a seven-week civil trial over Johnson & Johnson’s role in fueling the opioid epidemic. The trial began in May, and it was the first trial in history for a company accused of causing thousands of cases of opioid addiction and overdose.

Johnson & Johnson is one of the largest corporations in the world. The company and its subsidiaries manufacture and sell a vast array of households products, including Band-Aids, Tylenol, contact lenses, shampoo, and baby powder. Johnson & Johnson is also involved in the opioid industry. One division of Johnson & Johnson, Janssen Pharmaceuticals, manufactures opioid painkillers, such as the fentanyl-based Duragesic® patch. Additionally, Tasmanian Alkaloids and Noramco, two former subsidiaries of Johnson & Johnson, supplied other pharmaceutical companies with raw opium for opioid production.

According to Oklahoma Attorney General Mike Hunter, Johnson & Johnson is partly responsible for the 4,653 fatal opioid overdoses which occurred in Oklahoma from 2007 to 2017. The lawyers for Oklahoma persuaded Judge Balkman that Johnson & Johnson created a “public nuisance” by exaggerating the safety and effectiveness of its opioids to doctors and consumers. Hunter characterized the company as a “kingpin” which “built its billion dollar brand out of greed and on the backs of pain and suffering of innocent people.”

Johnson & Johnson’s Response

Almost immediately after Judge Balkman announced his decision in favor of Oklahoma, Johnson & Johnson vowed to appeal. The company even predicted that the litigation for the appeal process would expand the case into 2021. “We do not believe the facts or the law support this decision today,” said Sabrina Strong, a lawyer for Johnson & Johnson. “We have many strong grounds for appeal and we intend to pursue those vigorously.”

The company also denied Oklahoma’s allegations that it caused or contributed to the opioid epidemic. Johnson & Johnson claims that its opioid painkillers, both brand-name and generic, accounted for less than 1% of the American opioid market, although Oklahoma disputes that assertion. The company’s lawyers will ask the Oklahoma Supreme Court to suspend Judge Balkman’s order while the company appeals his ruling.

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The Impact of the Case on the Pharmaceutical Industry

When the Oklahoma Attorney General filed a “public nuisance” lawsuit against Johnson & Johnson in 2017, he also sued Purdue Pharmaceuticals and Teva Pharmaceuticals, two other opioid manufactures. Both companies avoided trial by agreeing to pay Oklahoma multi-million dollar settlements. The $527 million fine for which Johnson & Johnson is now liable is greater than the combined amounts of both settlements, but it’s actually less than what many expected the judge would order the company to pay. In fact, Oklahoma had sought $17 billion in damages to fund addiction treatment for the next thirty years. Judge Balkman instead ordered the company to pay Oklahoma a fine which will only support one year of treatment. The unexpectedly low fine caused the value of Johnson & Johnson shares to skyrocket by 5%. It also bolstered shares for other pharmaceutical companies which are fighting similar legal claims in other states.

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Throughout America, states and counties have filed about 2,500 lawsuits against opioid manufacturers. Approximately 2,000 of those lawsuits have been consolidated into one case which a federal judge in Cleveland, Ohio will soon consider. The lawyers for the plaintiffs in that case praised the Oklahoma decision as “a milestone amid the mounting evidence against the opioid pharmaceutical industry.” Legal experts believe that the Oklahoma trial and its result may foretell how both sides will present their arguments in the case in Ohio.

Attorney General Hunter believes that the case in his state provides a “road map” for successfully suing pharmaceutical corporations: “That’s the message to other states: We did it in Oklahoma. You can do it elsewhere.” Johnson & Johnson will be a defendant in Ohio as well as in cases in West Virginia.

[UPDATE: On October 1, Johnson & Johnson agreed to pay a settlement of $20.4 million to Cuyahoga County and Summit County in Ohio. As a result of the settlement, the company will not be a defendant at the trial in Cleveland.]

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