MATTHEW NEFF: Can drug companies be held liable for opioid epidemic?

NeffSeveral pharmaceutical manufacturers of opioids are being investigated and/or sued for their role in the development of the opioid epidemic.

The CEO of Insys Therapeutics was recently convicted of racketeering for providing payoffs to doctors to prescribe fentanyl. Purdue Pharma (no relation to the university) has been singled out for its role in developing and marketing, with deadly efficiency, the drug Oxycontin.

In his book “Dreamland,” Sam Quinones devotes an entire chapter to the development of Purdue Pharma and its sales tactics, and how the success led to the creation of fabulous wealth for the family that controls Purdue Pharma, the Sacklers. It’s easy to find museums and art galleries that have been endowed by the Sackler family wealth, including a wing of the New York Metropolitan Museum.

So the Sacklers were creative and effective in developing new ways to sell more drugs; does that mean they are liable? That question falls into two broad areas of the law: statutory/regulatory and tort law. On the regulatory front, Oxycontin and other opioids generally are approved by the U.S. Food and Drug Administration. Before their approval, they were exhaustively tested, in animals and humans, and ultimately approved for use as a prescription drug. That does not mean they are without risk, only that—pursuant to federal law—their distribution is approved and regulated and their use must be prescribed by a doctor.

The more difficult issue is in tort. Tort law imposes liability on someone who owes another a duty to be careful, and to not “proximately cause” harm. Drug companies engage in an inherently dangerous business. They produce products that are known to be dangerous and can be subject to abuse; that is why government approval is required, and why the products can be prescribed only by licensed parties.

So how can pharma be the “proximate cause” of the harm, when the government approved the drug, and it is prescribed to the patient by a doctor? The pharma company doesn’t deal with the patient; it deals with the pharmacies that fulfill the doctors’ orders, right?

This is where market conduct becomes an important consideration. Did Purdue Pharma, with or without the active involvement of certain Sackler family members, mislead the marketplace about the safety of opioids? The company certainly promoted the idea that opioids were not addictive, based on a slender reed of marginal (some would say misleading) research. And with that reed, it built an impressive marketing machine.

Purdue was also a pioneer in sending salespeople out to talk to practitioners about the wonderful, pain-killing and non-addictive effects of opioids. Did the company’s sales tactics take it out of the realm of once or twice removed from the patient, where it became a collaborator or facilitator with the prescribing doctors?

Purdue, the Sackler family and other opioid manufacturers will mount a vigorous defense based on many of these arguments. They will say the FDA had to review and approve these drugs, for the very reason that they are inherently unsafe. How can a pharmaceutical company be held liable once that approval is in hand?

The next argument will be that the harm to patients was not “proximately caused” by the pharma company because, between the company and the patient who was harmed stood at least two other parties: the prescribing doctor, and the pharmacy that filled the prescription.

Even if the companies are found to be the proximate cause of the harm, they will argue that the damage was not “reasonably foreseeable.” The pharma company makes the approved drug; how could it foresee that doctors would arguably overprescribe, that patients would abuse the drug, or that an aftermarket in the drugs would develop (given that the market is federally regulated)?

All these arguments will require an interpretation of the facts. How did the company get its FDA approval? Did it mislead in that effort? How did it market the drug and motivate its salespeople? How involved were the Sacklers in the day-to-day decisions by Purdue in how it managed its sales?

It will be some time before these questions are answered, and Purdue’s behavior might have been so extreme and overwhelming that it is found to be liable. If so, what does that do to the state of tort law generally, and to the management of pharmaceutical sales more broadly? These uncertainties will require years of litigation and appeals to resolve.•


Neff is a senior adviser to Evolution Capital Partners and is of counsel to the law firm of Bingham Greenebaum Doll LLP.

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