Michigan opioid lawsuit treats firms like drug dealers, seeks $1B-plus judgment
The state of Michigan filed suit Tuesday in Wayne County to demand drug companies pay damages spurred by the opioid abuse epidemic,a cost that might push potential settlements or judgments over a billion dollars.
The lawsuit against AmerisourceBergen, CardinalHealth, Walgreens and McKesson was filed in Wayne County Circuit Court because it is "ground zero for the opioid epidemic in Michigan" and has the largest population of residents in the state, said Kelly Rossman-McKinney, a spokeswoman for Attorney General Dana Nessel.
All of the companies named in the 100-page complaint, Nessel said, "paid fines as a cost of doing business in an industry that generates billions and billions of dollars in annual revenue." She said it's unlikely this is the last legal action Michigan will be taking regarding the drug companies.
"The opioid epidemic continues to rage unabated here in Michigan and that epidemic continues to be fed by these companies precisely because the fines and suspensions imposed by the DEA did not change the conduct of this industry," Nessel said at a Tuesday press conference with Gov. Gretchen Whitmer.
Michigan is the first state in the nation to file against drug companies under a state drug dealer law — the 1994 Michigan Drug Dealer Liability Act — that is usually reserved for street-level drug operations. The state also makes claims of negligence and public nuisance under separate state laws in its complaint.
AmerisourceBergen said in a Tuesday statement opioid-based products make up less than 2% of its sales, which it distributes to pharmacies only through "prescriptions written by licensed doctors and health care providers."
"We are dedicated to doing our part as a distributor to mitigate the diversion of these drugs without interfering with clinical decisions made by doctors," the company said.
A Walgreens representative said the company doesn't comment on pending litigation. CardinalHealth and McKesson did not return a call and email seeking comment.
Opioids were involved in 2,053 drug overdose deaths in Michigan in 2017, a 13.8% increase from 2016, according to the Michigan Department of Health and Human Services.
In 2018, the aggregate cost for the state to treat opioid overdoses and dependence totaled more than $110 million, triple the cost of 2009, said the state's Chief Medical Executive Joneigh Khaldun.
"There’s more work to do, but this is a crucial step in the right direction," Whitmer said. "Where we can act we will do so and we will do so swiftly and surely and in a coordinated fashion.”
The four companies named in the suit, Nessel said, failed to maintain controls on opioid sales and prescribed more opioids than were medically necessary. The operation essentially was a "criminal enterprise," she said.
Existing state tort liability law makes it difficult to hold a pharmaceutical company liable based on the product itself, which is why the attorney general may be pursuing the suit under the state drug dealer law, said Peter Jacobson, professor emeritus of health policy and law at the University of Michigan.
Under the state drug dealer law, Nessel could pursue liability not based on the drug itself but on its use and distribution, Jacobson said.
"The underlying claim is that the pharmaceutical company knew that the drugs were addictive, knew that the physicians were writing excessive prescriptions and did nothing to stop it," he said.
Between 2006 and 2012, more than 2.8 billion opioid pills were distributed in Michigan, with more than a half billion distributed by McKesson and nearly that amount by Walgreens, Nessel said. Walgreens, the second largest pharmacy store chain in America, is the only company among the four named in the suit that has both distribution and retail roles.
Nessel said she hopes any settlement or judgment from the lawsuit would total "north of a billion dollars" to pay for the health care, law enforcement, prosecution, housing, rehabilitation and early childhood intervention measures needed to deal with the opioid epidemic.
“We want to make sure that the money that comes in from any projected settlements or judgement is actually used specifically to target the opioid epidemic and to allow for treatment for individuals who need it," she said.
Michigan has been part of settlement agreements in other federal opioid lawsuits, and Nessel, as part of the ad hoc committee assigned to the Purdue bankruptcy, has been working to a find solution that would "provide relief to Michigan."
But the lawsuit filed Tuesday is the first initiated by the state.
Smaller lawsuits have been filed by several municipalities in Michigan looking to recoup the cost of responding to drug overdoses. The state will collaborate with those counties, cities and townships that have already filed as much as possible, Rossman-McKinney said.
In October, Nessel selected the Sam Bernstein Law Firm and two other law firms out of Dallas and Pensacola, Florida, to lead the litigation because of their national expertise in similar litigation.
Nessel's lawsuit could bring the manufacturers to the table, where a judge likely would encourage settlement negotiations, Jacobson said. By making and maintaining state claims, Nessel likely would secure a more familiar jury, should it come to trial, than at the federal level, he said.
"You’re likely to find a friendly audience among state courts that, after all, have to live in the community affected by the opioid scourge,” Jacobson said.
Whitmer’s administration last month said it hoped to cut the number of opioid-related overdose deaths in Michigan in half in the next five years in part through a $1 million media campaign.
"When we look at the data there is no question that this epidemic was ignited by the increase in prescriptions and availability of extremely addictive opioid pain medications," but addressing the issue will take an "all hands on deck" approach, Khaldun said.
Michigan is one of the last states in the nation to file a state-initiated legal action against drug companies in the opioid epidemic, a problem that Nessel said stemmed from the procrastination of her predecessor, Republican former Attorney General Bill Schuette.
"He didn’t do a damn thing when it came to moving forward on these opioid lawsuits, which I believe are critical in regard to getting the finances that we need and our state deserves to tackle this incredibly devastating epidemic," Nessel said.