In a story likely to repeat many of the themes of the tobacco lawsuits in the 1990s, the company that introduced OxyContin to the pain relief market has settled a lawsuit with Oklahoma for $270 million.
Purdue Pharma’s settlement includes $102 million to build an addiction and pain research and treatment center in Tulsa. It will pay another $60 million to two private law firms that represented the state, along with $20 million worth of treatment medication and a total of $12 million to cities and towns.
It seems like a lot of money, and it is. But it’s only a fraction of the opioid epidemic’s estimated cost: In 2017, the White House Council of Economic Advisers estimated the national cost at $504 billion. As for Oklahoma, its lawsuit included a consultant’s report that estimated it will cost $8 billion over 20 years to get control of the state’s prescription drug problem.
With figures like those, Purdue Pharma got a pretty good deal from Oklahoma in terms of dollars. But the publicity is 100 percent negative and a preview of what lies ahead. Since this case is the first of many that will be settled, larger states that have been hit hard by opioid abuse are sure to get much more money.
One reason Oklahoma settled fairly quickly is because the company has acknowledged that it’s considering bankruptcy protection as an option as the lawsuits mount. The settlement guarantees that the state gets something.
Another reason is that the lawsuit was before a judge who kept the train moving: He set a May trial date and refused defense requests to delay it. In fact, Oklahoma’s lawsuit against two other opioid manufacturers also is scheduled to begin in May.
Opioids really are this generation’s tobacco. The parallels are eerie, starting with the deaths attributed to each product.
The Centers for Disease Control reports that nearly 400,000 people died of opioid overdoses between 1999 and 2017. That figure is bad enough, but it does not include those who became addicted to these powerful painkillers but have managed to survive.
Tobacco companies, dating back to the early 20th century, were superb marketers of their product. Purdue Pharma and other opioid manufacturers are accused of encouraging doctors to overprescribe the pain pills — and paid a $600 million fine for this in 2007.
Tobacco executives publicly denied for decades that cigarettes were harmful, when their research dating to the 1950s indicated otherwise. Opioid manufacturers likewise downplayed any risk of addiction, and the Massachusetts lawsuit against Purdue Pharma includes damaging emails and other documents to boost its claim that officials knew exactly what they were doing.
Cigarette manufacturers paid billions of dollars in the 1990s to settle lawsuits filed by states to recover the costs of treating various illnesses caused by Big Tobacco’s products. The same thing is most likely to happen to Purdue Pharma and its Big Pharma peers. If the Oklahoma case is any indication, the only thing left to decide is how much.