Oklahoma judge finds J&J guilty for its role in the opioid epidemic — but shares spike on $572M fine
An Oklahoma judge on Monday found pharma giant J&J guilty of helping lay the groundwork on a nationwide epidemic of opioid addiction, but only fined the company $572 million — at the very bottom of the range analysts had set, which stretched up into the billions.
The closely watched outcome will help calibrate estimates of just what kind of liability the multinational company faces for an epidemic the CDC says has cost the lives of hundreds of thousands of people throughout the country.
For investors, it was good news, as J&J shares spiked close to 4% on the guilty ruling.
The Oklahoma Attorney General had argued that J&J’s aggressive sales practices created an oversupply of opioids that drove the epidemic, while underplaying the dangers and hyping the rewards of opioids. J&J was the only remaining defendant, after Teva and Purdue Pharma reached their own settlements without admitting guilt.
Not surprisingly, J&J saw it differently, saying the state’s case never proved their contention that the company’s actions had created a public nuisance. Now they’re going to appeal.
“Janssen did not cause the opioid crisis in Oklahoma, and neither the facts nor the law support this outcome,” said Michael Ullmann, J&J’s general counsel. “We recognize the opioid crisis is a tremendously complex public health issue and we have deep sympathy for everyone affected. We are working with partners to find ways to help those in need.”
This case was considered a bellwether suit which could have a big impact on the hundreds of state and local cases that are being juggled now, presenting the possibility of a master agreement that could reach past $100 billion.
For its part, J&J argued that it played — at most — a minuscule role in the epidemic in Oklahoma. The pharma giant tried, without success, to get the case thrown out, arguing it was protected by the First Amendment.
Oklahoma AG Mike Hunter countered by saying that J&J execs coordinated their marketing work on opioids with Purdue for years.
Purdue’s owners, the Sackler family, came to a $270 million settlement deal with the state, which will be used to pay for a new drug research center.