Opioid Addiction Lawsuits & Settlements

Opioids have caused or contributed to more than 450,000 deaths over the past two decades. Drug companies like Purdue Pharma (maker of OxyContin), distributors like CVS and Walmart, and others are facing legal action on a number of fronts, including from state, city, and county governments.

A wave of "mass tort"-style lawsuits from individual plaintiffs may still be coming, but a number of recent huge settlement deals may stem that tide. In this article, we'll:

• look at the intersection of the opioid crisis and the law
• discuss some high profile settlements involving opioid manufacturers, pharmacies, and others, and
• explain the latest on Purdue Pharma's bankruptcy settlement deal, and the $26 billion settlement between four of the biggest drug and health care companies in the U.S. and the thousands of state and local governments that sued them.

Opioid Crisis Lawsuit Origins

It's fairly safe to say that Purdue Pharma's OxyContin kicked off the opioid crisis in the 1990s. Purdue and its owners, the Sackler family, are accused of aggressively marketing opioid drugs and misleading the public on just how addictive these medications are.

In 2007, Purdue pleaded guilty to federal criminal charges that it had misrepresented OxyContin's risks to stakeholders. Ten years later, the U.S. Department of Health and Human Services declared the opioid epidemic a national crisis. Since then, the U.S. has seen an average of 50,000 opioid-related deaths a year, and the numbers continue to rise.

In December 2017, the Judicial Panel on Multidistrict Litigation consolidated 64 opiate actions into federal court in Ohio for pretrial proceedings in what is known as "multidistrict litigation." These lawsuits, filed primarily by counties and cities, allege that:

• manufacturers of prescription opioid medications overstated their benefits, downplayed risks of use, and aggressively marketed the drugs to physicians, and
• when presented with suspicious orders for prescription, distributors of these medications failed to properly monitor investigate, refuse, and report the orders.

The MDL (officially called In Re National Prescription Opiate Litigation) soon grew to almost 3,000 lawsuits. These municipalities seek recovery of costs they've incurred dealing with opioid addiction in their jurisdictions.

Some of the more disturbing allegations revealed in the lawsuits include opioid manufacturers paying thought leaders in the industry to publish articles promoting the benefits of opioid use, without warning of the risks.

Among the defendants are distributors and pharmacies like McKesson Corporation and CVS. According to federal data, these defendants rarely raised red flags even when drug quantities ordered were "wildly disproportionate" to the pharmacies' local populations. Distributors are alleged to have knowingly shipped millions of pills to cities with only hundreds of residents.

In December 2020, the Justice Department sued Walmart for fueling the crisis by filling suspicious opioid prescriptions. The complaint exposes numerous instances of Walmart employees warning company managers about suspicious prescriptions but nonetheless being directed to fill them. A federal judge recently dismissed Walmart's preemptive lawsuit, filed just weeks before it was sued by the Justice Department, citing the Justice Department's sovereign immunity.

In the meantime, the Covid-19 pandemic added stress and grief to an already untenable situation for those addicted to opioids, and those in recovery. August 2019 to July 2020 saw the highest number of overdose deaths of all drugs, and opioids were attributed with 73% of those deaths, according to Bloomberg.

Opioid Lawsuit Settlements

Investigators have cast a wide net in identifying those responsible for the opioid epidemic, in an effort to determine what they knew and when. There are multiple defendants under scrutiny, from manufacturers to prescribers and distributors.

Irrespective of Purdue's admission of guilt more than a decade earlier, the opioid lawsuits revealed thousands of documents detailing how McKinsey & Company, a marketing consultant to Purdue Pharma, promised to "turbocharge" opioid sales. McKinsey advised Purdue to focus on marketing high-dose prescriptions, despite clear evidence that the opioid epidemic in the U.S. had been escalating for years. The revelations prompted McKinsey to settle investigations into its role in the opioid crisis for $600 million in February 2021. States will use the settlement proceeds for opioid prevention and recovery programs.

Inundated with lawsuits, and likely in an effort to manage the litigation, Purdue Pharma filed for bankruptcy in 2019. In November 2020, the federal bankruptcy judge approved Purdue's $8.3 billion settlement of a lawsuit filed by the Department of Justice in which Purdue pleaded guilty to three criminal charges. The deal included a provision whereby individuals within the Sackler family would forfeit $225 million, a mere fraction of the fortune they earned on the backs of Americans who suffer the consequences of lifelong addiction.

Since 2015, defendants have settled multiple claims at a premium of billions of dollars. Reminiscent of the tobacco litigation, these payouts have primarily gone to government entities:

• Mallinckrodt in 2020 settled $1.6 billion in claims by several states and municipalities in the MDL, and $35 million to the U.S. government in 2017.
• Purdue Pharma settled several state and local government suits for $12 billion in 2019.
• Johnson & Johnson settled allegations by the State of Oklahoma for $572 million in 2019.

Additional defendants have settled millions of dollars in claims since 2015. Yet, despite the promising nature of defendants succumbing to pressure by governmental entities, the question remains: What about the families affected?

While the MDL consists primarily of cities, counties, and tribal governments, individuals can file a lawsuit against the opioid manufacturers when they meet certain criteria. While these factors will vary among law firms, in general, individuals harmed by opioids can file a lawsuit when the victim was prescribed an FDA-approved opioid, and:

• died from an overdose
• was hospitalized due to an overdose, or
• was treated for addiction in inpatient rehab.

Individual lawsuits claim opioid manufacturers and distributors caused or contributed to victims' addictions. The most viable individual claims appear to be wrongful death cases, although addiction in and of itself is an injury for which victims might be compensated.

Purdue Pharma's Bankruptcy and Settlement Deal

The biggest fish seemed to have been taken out of the pool of opioid lawsuit defendants in September of 2021, when a bankruptcy court ruling dissolved Purdue Pharma. The most controversial part of that settlement deal required members of the Sackler family (owners of Purdue Pharma) to commit $4.5 billion to the battle against opioid addiction, but it also let the Sacklers themselves off the hook for most future legal action over harm caused by opioids.

According to The New York Times, the settlement agreement was "harshly criticized for shielding the Sacklers," who under terms of the deal were "receiving protections that are typically given to companies that emerge from bankruptcy, but not necessarily to owners who, like the Sacklers, do not themselves file for bankruptcy."

In December 2021, U.S. District Court Judge Colleen McMahon apparently agreed, ruling that the bankruptcy court had no legal basis for preventing opioid addiction lawsuit claimants from suing the Sacklers.

Connecticut Attorney General William Tong, whose office was part of the appeal of the bankruptcy court's decision, applauded Judge McMahon's decision to throw out the deal, declaring it "a seismic victory for justice and accountability that will re-open the deeply flawed Purdue bankruptcy and force the Sackler family to confront the pain and devastation they have caused."

In March 2022, Purdue Pharma, members of the Sackler family, and a number of key states reached a revised agreement in which the company and its individual members would pay up to $6 billion dollars to help address, treat, and prevent opioid addiction in communities across the country.

The New York Times calls the settlement agreement "a crucial step toward funneling billions of dollars from the family's fortune to addiction treatment programs nationwide," but this latest iteration raised many of the same objections that came in response to the 2021 agreement, since the Sacklers themselves would still avoid personal liability for their role in the opioid crisis.

In August 2023, the U.S. Supreme Court agreed to consider the Purdue Pharma bankruptcy case, putting the settlement deal on hold, and raising the prospect that the nation's highest court will weigh in on what's become a controversial issue: big corporations using bankruptcy to essentially avoid or limit their liability when consumers are harmed by their products.

Walmart, Walgreens, and CVS Found Liable For Role In Opioid Crisis

In November 2021, a federal jury found that three of the biggest pharmacies in the U.S. contributed to a "public nuisance" by ignoring clear warning signs related to opioid prescriptions, and failing to implement proper oversight protocols that might have stemmed the tide of opioid addiction, overdose, and death in two Ohio counties.

The Cleveland jury's decision against defendants CVS, Walgreens, and Walmart is the first jury verdict in any kind of lawsuit over harm caused by opioid addiction. Details of the pharmacies' financial liability should be finalized in early 2022.

According to the Nolo Dictionary, a "public nuisance" is an activity or thing that affects the health, safety, or morals of a community (different from a private nuisance, which harms only a neighbor or a few individuals).

The New York Times notes that the "public nuisance" argument was adopted by the Ohio jury even though judges in both California and Oklahoma rejected that line of reasoning in opioid-related lawsuits just a few weeks earlier. But since the "public nuisance" allegations managed to stick here, we're likely to see this same legal tactic employed against other defendants in the opioid production, prescription, and distribution chain. Learn more about how nuisance claims work.

Opioid Verdict Against Teva Pharmaceuticals and Others

In late 2021, a jury held Teva Pharmaceuticals and others liable for downplaying the risks of opioids and contributing to the addiction epidemic in New York.

The New York Times called the decision (which came after prosecutors successfully employed the "public nuisance" argument discussed above) a "landmark," since government attorneys went after every link in the opioid supply chain, from the makers of the drugs, to the distributors, to the pharmacies that filled prescriptions.

Native American Tribes Reach Massive Opioid Settlement

Hundreds of Native American tribes have reached a $590 million settlement with opioid manufacturer Johnson & Johnson and three of the biggest drug distributors in the country (AmerisourceBergen, Cardinal Health and McKesson), according to The New York Times. Compared with other groups, the Native American population has suffered a disproportionately high number of opioid-related deaths, and the largest chunk of the $590M settlement is slated for addiction treatment and related health services, execution of which is to be overseen by tribal health experts.

Four Companies Reach $26B Settlement Over Opioids

In February 2022, four of the biggest drug and health care companies in the U.S.—AmerisourceBergen, Cardinal Health, Johnson & Johnson and McKesson—reached a $26 billion deal to settle thousands of lawsuits filed by state and local governments, over the role these companies played in causing and perpetuating the nation's opioid crisis.

According to NPR, "Most of the money will go to fund drug rehab and harm reduction programs at a time when opioid overdoses are killing more Americans than ever before."

Allergan and Teva Settlement Deals Could Top $6.6B

In July 2022, the two pharmaceutical firms Allergan and Teva announced a pair of proposed settlement agreements with a number of state attorneys general, local governments, and others. These deals are meant to resolve thousands of lawsuits over harm caused by the opioid crisis.

Teva Pharmaceutical's $4.25 billion settlement is a bit unique, according to The New York Times, since plaintiffs can choose to be compensated solely in cash or, in part, through medication used to treat addiction and reverse drug overdoses. Allergan's $2.37 billion settlement agreement is more traditional, providing cash-only compensation to plaintiffs.

Walgreens Liable for San Francisco's Opioid Crisis

In August 2022, a federal judge decided that pharmacy chain Walgreens played a big part in the city of San Francisco's opioid crisis, by failing to exercise proper oversight over the prescriptions it was filling, and ignoring obviously suspicious orders rather than reporting them to proper authorities. The ruling followed another successful application of the "public nuisance" argument discussed above. Read the decision, courtesy of the City Attorney of San Francisco website.

Can You File an Opioid Addiction Lawsuit?

There are a lot of moving parts when it comes to the viability of an individual lawsuit against opioid manufacturers, distributors, and others. If you're considering legal action over addiction or any other type of harm linked to opioid use, your best first step might be talking to an attorney to get a sense of the current legal landscape and your options.