JNJ Johnson and Johnson

By Sara Randazzo and Jared S. Hopkins 

Johnson & Johnson must pay $572 million for contributing to an opioid-addiction crisis in Oklahoma, a judge there ruled Monday in a closely watched trial.

The verdict comes in the first case to go to trial of more than 2,000 brought by state and local municipalities nationwide seeking to hold the pharmaceutical industry accountable for widespread opioid abuse.

In siding with the Oklahoma attorney general, state court judge Thad Balkman rejected Johnson & Johnson's arguments that it lawfully marketed and sold its prescription painkillers and isn't to blame for a public-health crisis in the state.

Johnson & Johnson said it would appeal the verdict.

Over the course of the seven-week trial, attorneys for Oklahoma argued that Johnson & Johnson is liable not only for two opioid drugs it sold -- the fentanyl patch Duragesic and tapentadol pill Nucynta -- but also because it owned two companies that supplied the active pharmaceutical ingredients and narcotic raw materials to other drugmakers for their own opioid painkillers.

Attorney General Mike Hunter said the company's actions created a "public nuisance" and asked the judge to award as much as $17 billion for the state to abate the costs of the crisis, through spending on areas like addiction treatment and overdose-prevention programs.

Oklahoma saw 4,653 residents die from unintentional prescription-opioid overdoses from 2007 to 2017, Mr. Hunter said in court. In some years, the state said in court filings, the number of painkiller prescriptions dispensed eclipsed the number of state residents.

Johnson & Johnson became the lone defendant after two other companies named in the 2017 lawsuit settled in the run-up to trial. OxyContin-maker Purdue Pharma LP and its owners, the Sackler family, agreed to pay $270 million, much of it to fund an opioid-addiction research center. Teva Pharmaceutical Industries Ltd. agreed to an $85 million deal.

The state's case hinged entirely on public nuisance law, traditionally used in property disputes but increasingly becoming a tool state attorneys general are using in cases against private industries.

Johnson & Johnson argued during the trial that its drugs accounted for a fraction of those taken in Oklahoma and that an influx of illegal heroin and fentanyl were the real culprits in overdose deaths.

Analysts closely followed the Oklahoma trial for signs of what might happen in the broader opioid litigation. Attention will next turn to Cleveland, where two counties are slated to go to trial in October against an array of drugmakers and distributors. That trial is serving as a bellwether for hundreds of others brought by cities and counties that have been consolidated in federal court in Ohio before U.S. District Judge Dan Polster.

The verdict could put pressure on settlement talks in the rest of the opioid cases. Judge Polster has pushed the parties to settle while allowing the October case to head to trial. Complicating settlement talks is tension between state attorneys general, which want to maximize recoveries from cases they have filed in state courts, and the many cities and counties pressing cases in federal court.

Johnson & Johnson is a relatively smaller player in the opioid-painkiller market. From 2006 to 2012, its products represented 8% of the market for fentanyl patches and pouches bought by U.S. pharmacies, according to a Wall Street Journal analysis of Drug Enforcement Administration data. The company represented around one-quarter of 1% of the market for prescription opioid pills in that period, the data shows. Johnson & Johnson still makes Duragesic but sold its interests in Nucynta in 2015 and exited the opioid-ingredients businesses by 2016.

Brad Beckworth, a Texas attorney hired to represent the Oklahoma attorney general's office in the case, said the verdict shows that the opioid crisis is about more than Purdue, which has drawn the most attention for its role in marketing OxyContin for wide-ranging pain. "This crisis didn't occur based on one person or one company," Mr. Beckworth said.

As Johnson & Johnson continues to battle the opioid cases, it also faces thousands of lawsuits alleging harms from its signature baby powder, pelvic mesh and hip devices as well as a handful of pharmaceutical products.

--Joseph Walker contributed to this article.

Write to Sara Randazzo at sara.randazzo@wsj.com

(END) Dow Jones Newswires

August 26, 2019 16:22 ET (20:22 GMT)

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