An Oklahoma judge was three decimal places off, mistaking thousands for millions, when he originally calculated the amount Johnson & Johnson should pay for its role in the state’s opioids crisis.
Judge Thad Balkman announced his mistake on Friday and set a new fine, reduced by about $107 million. The total is now $465 million, down from the $572 million he assessed in August.
The miscalculation came when he was assessing various costs to the state to deal with addiction and prevention issues stemming from opioids. In his August order, Judge Balkman listed the yearly price to train Oklahoma birthing hospitals to evaluate infants with opioids in their systems at $107,683,000.
The amount was actually $107,683.
He was alerted to the mistake by lawyers for Johnson & Johnson.
The judge’s order on Friday is the final decision from last summer’s landmark eight-week trial, the first state trial to determine whether pharmaceutical companies could be held liable for the opioid disaster.
His ruling highlighted two challenges that opioid plaintiffs face: how to calculate the cost of damage wrought by opioids and how to assign blame.
Those questions are at the heart of thousands of opioid lawsuits, brought by cities, counties and states nationwide, against a much broader swath of drug manufacturers, as well as distributors and pharmacy chains.
Two Ohio counties recently obtained settlements worth $320 million from opioid distributors and manufacturers. The next opioid trial, currently set for March 20, will be brought by New York State and Suffolk and Nassau Counties against an array of opioid manufacturers and distributors with deep pockets, including Johnson & Johnson.
Months before the trial, Oklahoma had settled with Purdue Pharma and Teva, an Israel-based manufacturer of generic drugs, for a combined $355 million. Johnson & Johnson, which said that its sales of opioids were scarcely 1 percent of the market, instead chose to fight. In August, Judge Balkman ruled that Oklahoma had proved that the company’s aggressive marketing tactics had an outsized impact on the state’s crisis.
In suing to abate the continuing “public nuisance” exacerbated by opioids, Oklahoma said it would need $17 billion over 30 years to address drug treatment, pain management and prevention education. But in August, Judge Balkman had said that $572 million represented roughly only a year’s worth, because the state had not shown sufficient evidence to merit a 30-year award.
Both sides wondered whether he intended the judgment to be a one-time fine or subject to annual renewal. Friday’s order suggested it was one time.
Another point of contention was whether the judge would deduct $355 million from Johnson & Johnson, the amount from the earlier settlements.
That money has begun to flow to the state. Fees for the private lawyers who pressed the state’s case are about $75 million before the Johnson & Johnson award, according to a person familiar with the arrangements.
But Friday, Judge Balkman said the company was not entitled to that credit. Purdue and Teva settled without admitting fault. But after the trial, Judge Balkman ruled that Johnson & Johnson was indeed at fault.
In a statement, Johnson & Johnson said it would appeal Friday’s order, for reasons of fact and law, adding, “We recognize the opioid crisis is a tremendously complex public health issue and have deep sympathy for everyone affected.”
Estimates show that nearly 55,000 Americans die each year from a drug overdose, which has sadly become the leading cause of death of individuals under the age of 50. A majority of these deaths (60 percent) are caused by opioids. Even more shocking is that the rise in fatalities over the past 15 years more than tripled.
The overdose epidemic has taken a devastating toll on addicts, their families, and friends. But these deaths also cost the government agencies tens of billions of dollars each year when considering public healthcare, treatment facilities, law enforcement, criminal justice, and jail expenses. The United States Centers for Disease Control and Prevention estimates the cost is approximately $75 billion per year.
This is why thousands of government entities are suing wholesale and retail distributors and manufacturers of opioids looking to be reimbursed for government spending due to opioid addictions and overdoses.
In recent lawsuits, the defendants have included McKesson Corporation, Cardinal Health, AmerisourceBergen, Purdue Pharma, Janssen Pharmaceuticals (a subsidiary of Johnson & Johnson), Endo International, Teva Pharmaceutical, Allergan (formerly Actavis), Watson Pharmaceuticals, Covidien, Johnson & Johnson, CVS, Walgreens, and Rite Aid.
The lawsuits claim that the companies exaggerated the benefits of the medication and knew the drugs were being overly prescribed, but did nothing to warn doctors of the extremely addictive nature of the narcotics and the need to strictly limit the dose. The second part of these lawsuits allege that the pharmaceutical companies lobbied politicians and doctors in an effort to increase the use of opioids and willfully allowed the drugs to enter the black market.