New Front on Opioid Litigation: Suits Over Rising Premiums

By Sara Randazzo

The opioid epidemic has unfairly increased health insurance costs across the board, not just for those suffering from addiction, plaintiffs allege in five proposed class-action lawsuits filed Wednesday.

The suits, brought on behalf of people and businesses who have paid for health insurance in California, Illinois, Massachusetts, New Jersey and New York since 1996, represent a new front in litigation seeking to hold corporations accountable for the opioid crisis.

Already, drug makers and distributors collectively face more than 600 civil lawsuits brought by local and state municipalities trying to recoup costs borne from opioid abuse.

The proposed class actions name as defendants Purdue Pharma L.P., Teva Pharmaceuticals, Johnson & Johnson, Endo International, and other manufacturers, as well as drug distributors AmerisourceBergen Corp., Cardinal Health Inc. and McKesson Corp.

Like litigation brought by states and counties, the lawsuits allege manufacturers minimized the risk of opioids and overstated their benefits to boost profits, and that distributors did nothing to stop it.

They also claim that the defendants' conduct has hurt the private health insurance market.

"Insurance companies factored in the unwarranted and exorbitant healthcare costs of opioid-related coverage caused by defendants and charged that back to insureds in the form of higher premiums, deductibles, and co-payments," the complaints allege.

The total economic cost of the opioid epidemic reached an estimated $504 billion in 2015, according to the White House Council of Economic Advisers, representing roughly 2.8% of that year's gross domestic product.

The defendants didn't immediately respond to requests for comment Wednesday on the new round of lawsuits. The manufacturers have denied the allegations in prior opioid-related suits and said they are focused on being part of the solution to the opioid crisis. The distributors have also denied the mounting claims and said they are committed to maintaining strong programs designed to detect and prevent opioid diversion.

The lawsuits, filed in federal court in five states, bring claims including fraud, racketeering and public nuisance and seek the disgorgement of what they call unjust profits made by the defendants. Each potential class could number into the millions of people.

"It is not enough that public entities collect damages for harms suffered by taxpayers," said Travis Lenkner, a Chicago lawyer whose firm, Keller Lenkner LLC, is one of several backing the proposed class actions. "The manufacturers and distributors must also pay for the devastating economic impact they've had on the private sector and health insurance market."

Insurance-claim data show insurers' spending, and consumers' out-of-pocket spending, on addiction treatment has soared in recent years, as the opioid crisis has escalated. America's Health Insurance Plans, an industry group, put out a report in February on how health plans can prevent, intervene and treat opioid addiction.

In a study released last year, the Blue Cross Blue Shield Association found that the number of its members with an opioid use disorder jumped 493% from 2010 to 2016. In that same period, it found a 65% increase in the use of medication-assisted treatments for those disorders.

As new lawsuits pile up, settlement talks continue between the opioid makers and hundreds of municipalities. The majority of those suits have been consolidated before U.S. District Judge Dan Polster in Cleveland, who is pushing for a swift resolution to the litigation. The parties are due back in his court for a settlement conference next week, and the Justice Department has told the court it plans to participate in the talks.

Meanwhile, a handful of 2019 trial dates have been scheduled in federal and state courts.

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

(END) Dow Jones Newswires

May 02, 2018 12:58 ET (16:58 GMT)

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