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Ohio Sues 5 Major Drug Companies For 'Fueling Opioid Epidemic'

491 points| CrocodileStreet | 8 years ago |npr.org | reply

349 comments

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[+] twakefield|8 years ago|reply
I think I've seen this movie before. This looks like it's headed down the path of the Tobacco Master Settlement Agreement [0].

Here's the playbook:

1) A.G.s and private lawyers start filing lawsuits.

2) Defendants realized there is potentially catastrophic liability here and start negotiating a master settlement agreement ("MSA") whereby the states agree not to sue in the future in exchange for a set payment schedule to the plaintiffs.[1]

3) States A.G.s realize this is a great publicity opportunity to leverage their career into other elected office and governors realize this a real revenue stream.

4) So, interests aligned and there is a settlement.

5) Lawyers make a TON of money on their fee schedule set forth in the MSA. So much so, the Tobacco MSA lawyers were securitizing their future fees in private markets.

6) Bankers swoop in and start pitching states on the securitization of MSA payments for states to cover current deficit shortfalls.

7) Bankers make a point or two on the securitization deal proceeds ($10s or $100s of millions).

8) States leverage their future payments under the MSA to fill budget gaps where ever possible. Some allocate a small portion of the proceeds to the victims of the malfeasance but many do not because there are better ways to get future votes.

</rant>

Full disclosure: I was once a young public finance analyst working 80-100 hour weeks building financial models to securitize Tobacco MSA payments...slight grudge still held.

[0] https://en.wikipedia.org/wiki/Tobacco_Master_Settlement_Agre...

[1] Tobacco stocks jumped on news of the settlement because a large known liability is much better than an unknown one.

EDIT: slight clarification.

[+] rlucas|8 years ago|reply
There's a missing epilogue:

9) The states themselves, as well as a large interest group formed by the purchasers of whatever deals were securitized, are now financially interested in the continued financial health of the malfeasors.

In other words: the opioid producers now have the states and bondholders rooting for them to continue selling opioids.

(In fairness: if the pharmas are not pure plays this will not be as dismal as it was with tobacco. But in the tobacco case, it was pretty clearly laid out that the continued payment streams were secured only by MSA revenues based on continuing cigarette sales. So the states, or the bondholders, were rooting for continued cigarette sales.)

[+] baseten|8 years ago|reply
Ohio AG Mike DeWine is running for governor next year. He's Quite the opportunist. Consider this suit a campaign soft-launch. Don't know if he'll get a settlement before the election, but there will be plenty of quid pro quo cash to go around.
[+] oxide|8 years ago|reply
I came in ready to blab about what a pointless, impotent move this is to address the issue of opiate abuse.

Instead, I found a new perspective that helped me to see that this isn't about opiate abuse at all. It's about cashing checks.

[+] Alex3917|8 years ago|reply
I don't think there is going to be the same level of liability. In the tobacco case, people who started smoking Marlboros were dying from smoking Marlboros. With OxyContin, this isn't the case. E.g.:

- User switches to heroin or some other generic opiate because it's too hard to get a legal prescription and dies.

- User mixes drug with alcohol or benzodiazepines and dies.

- User dies from APAP poisoning, which the government requires to be added.

There might be 50,000 opiate-related deaths per year or whatever, but the actual number of accidental opiate ODs on solely OxyContin is no more than the number of deaths from Tylenol or Ibuprofen.

The Supreme Court already ruled that drug manufacturers can't be held responsible for the safety of generics. So even if Purdue is held entirely responsible for the rise in opiate addiction, there are enough mitigating factors in terms of the actual harms of addiction that I think it will be hard to see a tobacco-style settlement.

[+] zdrummond|8 years ago|reply
Super interesting insight, and fascinating walkthrough of the finance side..

However, you paint the whole thing as a corrupt failure. Hasn't smoking use dropped dramatically? Sure, lots of people got paid/power along the way, but we did make a large dent in the problem.

[+] arcticfox|8 years ago|reply
Fascinating! With your unique experience, do you see opportunity at any stage to tip that playbook onto a better course?
[+] intended|8 years ago|reply
Man, the grudges you hold after you have to dig into an industry, deep enough to model it.
[+] miej|8 years ago|reply
But this is also in light of the recent MA RICO conspiracy charges, which from my understanding is not really a...small deal, right? From what I've read, RICO is usually reserved for the likes of the mafia and even still is rarely used due to the overwhelming burden of proof required. Definitely despicable behavior though, with doctors taking bribes in exchange for breaking their Hippocratic oath

Source: https://www.justice.gov/usao-ma/pr/pharmaceutical-executives...

[+] sanguy|8 years ago|reply
After watching a 30 year old female overdose in a parking lot and not being able to be saved by first responders or emergency responders I've realized this problem is far more prevalent then most of us realize. This is a epidemic that is playing out under our very noses all across America.

This is just as dangerous as terrorists or any other think that goes bump in the night - it will destroy this country if not stopped.

Not sure what the solution is but this looks to be a good start to push for controls needed.

[+] refurb|8 years ago|reply
Sorry, but I'm going to take a different perspective. This will not destroy society if not stopped. We've had opioid epidemics in the past. Drug choice changes over time. Not long ago meth was the scourge of the land. It will ebb and flow.

Humans have always wanted to use mind altering drugs. What makes that a problem is prohibition. What's nice is I think society is slowly realizing that and turning to harm reduction. The safe injection sites and prescribed heroin are a couple good examples of that.

[+] tfinniga|8 years ago|reply
I'd argue that this is much more dangerous than terrorism.

Most things are. The main danger of terrorism is that we injure ourselves.

[+] pizza|8 years ago|reply
People need to be able to replace opioids with safer alternatives. Cannabis, kratom, etc. Not going to work for everybody of course but many people will probably be saved that way.
[+] shard972|8 years ago|reply
This is something Ive been tracking in the US for a few years even though I live in Australia.

It's painfully obvious why it's been suppressed for so long. All you need to is look at who the top advertisers with news organisations are, then imagine why they very rarely cover negative stories about drug companies.

Hell just to name 1 big example, the elderly couple who were passed out in the car with their grandchild in the back. When it went viral, the claim was they were doing illegal opioids and days later when it settled down it was found out to be prescription meds.

[+] InclinedPlane|8 years ago|reply
It is already worse than the AIDS epidemic ever was in the US (although that too might come back). It's become a significant factor in declining life expectancies in the US among certain demographics.
[+] aanm1988|8 years ago|reply
Lets by realistic, this is far more dangerous day to day than terrorism.

Neither are going to destroy the country. These drugs are going to destroy a lot of lives though.

[+] kartan|8 years ago|reply
"accuses the companies of engaging in a sustained marketing campaign to downplay the addiction risks of the prescription opioid drugs they sell and to exaggerate the benefits of their use for health problems such as chronic pain."

This is very relevant, from the article. This is the accusation. I have seen very generic comments in this thread that don't take this information into account.

[+] pacaro|8 years ago|reply
The pharma companies have some liability, but there was a perfect storm

The "war on drugs", and the racially motivated moral panic about crack cocaine and addiction created a social attitude that casts addiction as a moral failing

Inadequate safety net healthcare provisions lead people to the cheapest treatment option, generic opiates fit this bill

[+] dilap|8 years ago|reply
Our current healthcare system says, hey, if you're poor/out of work/disabled, here's some cash to buy dangerously addictive opiates that will short-term make you feel better. What could go wrong?

Here's some blog posts arguing the ACA actually increased the severity of the opioid crisis:

https://spottedtoad.wordpress.com/2017/03/27/some-stronger-e...

https://spottedtoad.wordpress.com/2017/03/28/its-opioids-not...

I'm (nevertheeless) pro-universal healthcare, but our idea of healthcare should probably not include these drugs in any but the most extreme and limited circumstances (like, I'm lying in a hospital bed). They're too dangerous.

Having doctors actively prescribe them, under incentives from pharma companies to sell them, seems to me predatory in the same way we think of street dealers stalking schoolyards as predatory.

Chris Arnade has done a great job documenting the crises at a personal level. I highly recommend checking out some of his articles and tweetstorms. It's gut-wrenching stuff (and obviously the problem goes way deeper than simple access).

But pharma/doctors/govt pushing drugs isn't helping, and is probably making it much worse.

[+] rukittenme|8 years ago|reply
I hate this argument.

1. Crack has a lighter sentence than meth does despite meth being a "white" drug and crack being a "black" drug.

2. America has always casted failure as a moral failing. Its the basis of Calvinism. It has nothing to do with the war on drugs.

3. The epidemic is new. In the 40s, 50s, 60s, when healthcare was much worse, you didn't see this level of addiction to opiates. Easier access to opiates means better access to healthcare which is the problem.

[+] vivekd|8 years ago|reply
Maybe but even if all of that were true it has no bearing on pharmaceuticals encouraging irresponsible over-prescribing and over use of their opioid based medication.
[+] frozenport|8 years ago|reply
The "war on drugs" has little to do with our opioid epidemic. These are people who were given "medicine" (mostly painkillers) and got hooked.
[+] jaggi1|8 years ago|reply
My wife was facing a burnout at the work. She was needlessly scared and suffered panic attacks. It is something I have gone through too and coped. But in her case because I love her more than I love myself I decided to take her to a doctor who then refereed her to a psychologist who then prescribed her drugs which on quick research appeared to be his plan to keep her on those forever. My expectation was that the doctor would suggest her some mild drugs and ask to take up Yoga or some other hobbies and assure her that everything is in fact alright with her.

He on other hand made a big deal out of whole thing.

We decided to trash all the medicines and lived happily without any issues.

My doctors have given me opioids so many times and I typically throw them out. Why take a substance like that if pain is bearable ?

[+] AceJohnny2|8 years ago|reply
I have a friend who lives in Columbus, going to Ohio State University. He regularly "regales" us of stories of the social and economic blight there. It's hard to imagine from the west coast.

Last week, he posted a picture of the Columbus Dispatch (the local newspaper), which featured a full-front-page ad for painkillers.

Seriously.

Of course, the newspaper isn't what it used to be, and has been recently sold due to lagging sales by the private family that owned it.

And when I shared this NPR article with this, he added "well maybe things got better, there are no longer overflow trailers in front of the City Morgue. But maybe they just moved them out back, I didn't search for them". And: https://coroner.franklincountyohio.gov/opiate-crisis-summit/...

[+] lr4444lr|8 years ago|reply
I have a hard time with the notion that doctors themselves were conpletely innocent bystanders merely "duped" by disinformation on these drugs.
[+] zzalpha|8 years ago|reply
Well, let's take Oxy. That drug, at recommended doses, was supposed to provide 24 hours of pain relief but frequently did not do so in practice. This lead people to increase doses, and down that road lies addiction.

Purdue knew this and lied to the medical community.

Unless doctors ran their own studies they couldn't know that Purdue's dosage recommendations were pure garbage.

[+] j05huaNathaniel|8 years ago|reply
You're a 100% right here. This is America though and we love to vilify corporations.
[+] thearn4|8 years ago|reply
It does seem like the AMA at least should answer for something.
[+] drugpusher|8 years ago|reply
I would think a key piece of evidence would be the IMS reports which show doctor level prescription data. The companies had to know that there were a lot of outlier doctors prescribing huge amounts of opioids way above the norm. (For those that don't know, you can buy data which shows what individual doctors prescribe. All drug companies buy this to know their market share and plan salesforce activities. You better believe they knew when things were going off the rails.)
[+] DisposableMoi|8 years ago|reply
I'm going to chip in here as I feel I'm qualified to do so as a recovering hard drug addict (clean almost a year).

Addiction like most human conditions is complex, to debate this article it helps to have a clearer understanding of what causes addiction. I'm going to state my beliefs as truth, they are after all my truth.

Addiction comes in many shapes, substance misuse, alcoholism, food addiction, porn addiction, consumerism and gambling to name some. They are not caused by the substance (or object etc) per se, i will paraphrase from a talk i will link to, if your grandma breaks her hip and is given medical quality opiates to relive her pain, she doesn't suddenly become a junkie.

Addiction is borne from the inate human desire to form relationships. If we cannot form relationships with people (because we are socially isolated, homeless and have no one to turn to, have issues that no one else understands for example) some people will substitute those relationship with people for relationships with "stuff". You may recognise in yourself that you do this with technology.

For some people the bonds they form are with more destructive thinks that $400 juice machines or the latest apple product, they are with substances that provide temporary feelings of acceptance but simultaneously corrode your very human-ness.

It's not strictly correct to say that one drug leads to another; shit, disconnected lives lead to substance abuse (rich and famous people can be isolated too) it's also not fully correct that medicating those people Addicted to opiates with a controlled amount of pharma grade opiates is the answer also, that just gives them A life sentence into opiod jail.

The answers to the problem require analysing why the problem exists.. whether you are wealthy or poor, it's clear that we are further apart as people and further isolates into the imaginary world of the internet more than ever. It's not a political question, similarly the answer is not political but sociological.

For anyone who has 15 minutes to listen to a powerful TED talk that will explain why the homeless guy and the middle class college kid both develop drug problems, watch this:

https://youtu.be/PY9DcIMGxMs

It could equip you with a completely different perspective about problems and solutions to addiction and also introduce you to the Portugal way of beating the problem.

Peace and Love (off to deanonymise)

[+] gehwartzen|8 years ago|reply
Seeing a lot of comments sugesting that strictly controlling the supply side is bad because lots of people legitimately in pain would be suffering. So how do other countries deal with this? The US consumes something like 80% of the worlds opioid supply
[+] menacingly|8 years ago|reply
There is a dangerous knee-jerk "but my grandma is in pain" reaction when this topic is brought up. I'm confident that we can settle somewhere between people dying in agony and _deliberately_ engineering super addictive dope then lying about it.
[+] skookumchuck|8 years ago|reply
Attacking the supply doesn't work and never has worked. Even worse, it sentences a large number of people to die in agony because they cannot get pain relief.
[+] OliverJones|8 years ago|reply
I fear this is just another example from the century-long tradition of politicians exploiting addiction to get their names in the news. A couple of years ago Johann Hari write a fine book on addiction and its legalities.

http://www.worldcat.org/title/chasing-the-scream-the-first-a...

The US has systematically demonized addicted persons since the end of alcohol prohibition. Demonizing them has served a few purposes.

1. promoting police employment and funding. The forerunner to the US DEA was the federal prohibition police force. Lately this has greatly expanded to include civil forfeiture.

2. separating people into us-vs-them classes. "Addicts are bad, so I'm good." This was explicitly racist back when police and pols could get away with being explicitly racist.

3. giving US pols on the world stage the self-image of righteousness.

Now that the addiction epidemic has hit, well, white working, people, the demonization doesn't work as well as it did when it hit people who don't look like red-state attorneys general and governors. So ya gotta demonize somebody? Why not big pharma? They're a juicy target.

Look. Addiction sucks. It's hard to kick. It makes people weak, silly, and vulnerable. But it doesn't make them evil.

[+] vic-traill|8 years ago|reply
I take full responsibility for all substance abuse in my life.

I will, however, note that doctors, pharmacists and pharmaceutical companies make money on the front end of opioid addiction, and then the same groups make money on the back end as addicts work to break their addiction.

There must be lots of Opioid Mansions somewhere.

[+] axaxs|8 years ago|reply
I've read a lot here. I live in Kentucky, which as part of the midwest, is as or more affected than others.

Giving people access is not a solution. Prescribing opioides or heroin is not a solution.

For all that think drug use is a personal issue and should be legal, you are wrong. Drug use affects EVERYONE. It affects the parents, the family, the friends first. And when a user becomes desperate, it affects innocent people.

We MUST end the drug epidemic by any means necessary. No, I'm not saying lock people up for weed...that's stupid. But America needs to be tough on opioides, from both foreign and our own pharmaceuticals.

[+] plainOldText|8 years ago|reply
Being tough on drugs affects innocent people as well. Just take a look at Mexico.

I think most solutions to societal issues should be sensitive to regional economic and educational factors. People will go to great lengths to break the law when their economic wellbeing is threatened.

[+] cagrimmett|8 years ago|reply
I grew up in a small suburb of Cleveland. My parents still live there and they tell me that not a day goes by without seeing another overdose in the paper. They've become so common that they stop running stories, they just add them in the obituaries. People I went to grade school with are among the overdose deaths, too.

I'm not sure Mike DeWine's lawsuit will do anything, or that it is even the best move to reducing overdoses. But damn, it is heartbreaking watching so many people die that way.

[+] bactrian|8 years ago|reply
The guy who did Silk Road was involved in the deaths of 6 users. He got life without parole.

These drug company execs belong in prison. They've directly and knowingly destroyed millions of lives.

[+] pthreads|8 years ago|reply
I have very little confidence this will go anywhere. If anything the pharmaceutical companies will pay a small fine and agree to better inform patients and doctors, control supply chain better etc.. Nothing else is going to come out of this.

I get the feeling that this is just political showmanship. I wouldn't be surprised if the governor of Ohio is running for office in 2020. He has been making the rounds of talkshows trying to sound very concerned about people's health.

[+] vivekd|8 years ago|reply
Even a small fine is a big start because if someone gets a small fine for bad behavior in court, and they repeat that behavior, they get a much larger penalty the second time around for willfully disregarding the court ruling about their illegal conduct. If the pharmaceutical companies get a small fine, it's a good bet that they won't be repeating that behavior.