Market Overview

States Are Firing Back At Opioid Drug Producers

Share:
States Are Firing Back At Opioid Drug Producers

The state of Ohio has filed a lawsuit against several top pharmaceutical companies, alleging that the companies violated the law in facilitating the spread of prescription opioid painkiller drugs that have contributed to a national opioid and heroin epidemic.

Ohio Attorney General Mike DeWine claims Purdue Pharma, Teva Pharmaceutical Industries Ltd (ADR) (NYSE: TEVA), Johnson & Johnson (NYSE: JNJ), Allergan plc Ordinary Shares (NYSE: AGN) and Endo International plc – Ordinary Shares (NASDAQ: ENDP) violated multiple laws, including the Ohio Corrupt Practices Act.

“In 2014 alone, pharmaceutical companies spent $168 million through sales reps peddling prescription opioids to win over doctors with smooth pitches and glossy brochures that downplayed the risks of the medicines,” DeWine said at a press conference Wednesday.

Related Link: The Government's Best Weapon Against Heroin Might Be Marijuana

Ohio joins the state of Mississippi in attempting to hold drug makers accountable for their role in the spread of opioid abuse. If the movement continues to gain momentum, investors could see these drug companies take a hit from huge legal expenses and potential settlements.

Things Have Gotten Bad

Sales of prescription opioids increased by nearly 300 percent from 1999 to 2015. A 2015 report by Matrix Global Advisors estimated that prescription painkiller abuse alone results in at least $25 billion in annual healthcare costs and $55 billion in total annual costs to society.

The Centers for Disease Control and state and local regulators have been fighting the national epidemic of prescription opioid painkiller abuse by increasing regulation of prescription opioid drugs and pressuring physicians to minimize prescription strength and dosage. However, those efforts to curb opioid dependence appear to be driving some Americans to more dangerous illicit drugs, such as heroin.

A decline in prescription drug abuse since 2010 has coincided with a massive surge in heroin overdoses.

While regulators are still trying to figure out how to deal with the opioid problem, DeWine wants to make sure the drug companies are held accountable for their role in the crisis.

“I don’t want to look back 10 years from now and say we should have had the guts to file,” DeWine said.

Companies Respond

J&J spokesperson Jessica Castles Smith told CNBC the company’s Janssen unit has done nothing wrong.

“Janssen has acted appropriately, responsibly and in the best interests of patients regarding our opioid pain medications, which are FDA-approved and carry FDA-mandated warnings about the known risks of the medications on every product label,” Smith said.

A Teva spokesperson said the company has “not completed review of the complaint and cannot yet provide comment.”

Representatives from Endo and Allergan declined requests for comment as well.

Posted-In: Analyst Color Biotech News Health Care Futures Politics Topics Legal Best of Benzinga

 

Related Articles (ENDP + AGN)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ELMDDougherty & Co.Initiates Coverage On12.0
MRNSCantor FitzgeraldAssumes7.0
MNRLCapital One FinancialInitiates Coverage On23.0
SONVertical GroupUpgrades
UNPMorgan StanleyMaintains136.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Financial Stocks Are Now Red For 2017, But Some Analysts See More Pain Ahead

Can This Leisure Group Cruise Higher? Cramer Thinks So