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States Are Firing Back At Opioid Drug Producers

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States Are Firing Back At Opioid Drug Producers
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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.

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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.

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