The state of Arkansas is suing three opioid manufacturers saying they deceived doctors and patients and caused the state to pay for unnecessary Medicaid claims, Attorney General Leslie Rutledge announced Thursday.
Rutledge said in a press conference that the state is filing suit Thursday, March 29, in Pulaski County Circuit Court against manufacturers Purdue Pharma, Johnson & Johnson and Endo. Those companies make brand-name and generic drugs such as Oxycontin and hydrocodone.
The lawsuit could be used to pay for education, treatment and law enforcement. She did not know how much the opioid epidemic had cost the state.
“It could be millions of dollars if not into the billions, but we can’t put a number amount on it,” she said.
Gov. Asa Hutchinson said any judgment or settlement could be used to reimburse the state for lost money.
Rutledge said the defendants violated two state laws. One was the Arkansas Medicaid Fraud False Claims Act, by taking actions that led the state to pay for Medicaid claims caused by opioid abuse.
She said the defendants also violated the Arkansas Deceptive Trade Practices Act by engaging in a marketing scheme to convince doctors and patients that the highly addictive drugs were safe for chronic pain. Under accepted, longstanding medical practices, the drugs had been used for acute pain. She said the companies had created front groups and used opinion leaders and medical conferences to change opinions about the drugs with information they knew was contrary to medical evidence.
“In short, these manufacturers lied. They broke the rules and helped unleash a healthcare crisis that has had far-reaching financial, social and deadly consequences in Arkansas and across the nation,” she said.
She said she was not closing the door on suing other firms.
Other states have already filed suit, she said. Some are involved in a multi-state litigation effort.
John Puskar, director, public affairs for Purdue Pharma, said in a statement, “We are deeply troubled by the prescription and illicit opioid abuse crisis, and we are dedicated to being part of the solution. As a company grounded in science, we must balance patient access to FDA-approved medicines, while working collaboratively to solve this public health challenge. Although our products account for less than 2% of the total opioid prescriptions, as a company, we’ve distributed the CDC Guideline for Prescribing Opioids for Chronic Pain, developed three of the first four FDA-approved opioid medications with abuse-deterrent properties, and partner with law enforcement to ensure access to naloxone. We vigorously deny these allegations and look forward to the opportunity to present our defense.”
Naloxone is a drug that can counteract the harmful effects of opioids in an emergency.
Opioid abuse has been a growing problem in the United States and particularly in Arkansas. Rutledge along with Gov. Asa Hutchinson made their announcement next to a geographic representation of the state of Arkansas composed of 401 prescription pill containers representing the 401 Arkansans who died of drug overdoses in 2016. Of those, 331 were opioid-related. Since 2000, the state has seen a more than 600% increase in drug overdoses.
Arkansas has one of the highest opioid prescription rates in the country. In 2016, there were more opioid prescriptions than Arkansans – 26 million pills, enough prescriptions for each Arkansan to have 78 pills, Rutledge said.
In January, Rutledge announced that her office was investigating opioid manufacturers with the help of four law firms: the Little Rock firm of Dover Dixon Horne; Seattle-based Hagens Berman Sobol Shapiro; the Mike Moore Law Firm in Mississippi; and South Carolina-based McGowan, Hood & Felder.
The private firms will be paid contingency fees based on the judgment. Under Arkansas Code Annotated 25-16-714, contracts between the attorney general and a private firm are limited to no more than the following:
– 25% for recoveries up to $10 million
– 20% for recoveries between $10 million and $15 million
– 15% for recoveries between $15 million and $20 million
– 10% for recoveries between $20 million and $25 million
– 5% for recoveries of greater than $25 million
– An aggregate not exceeding $50 million, exclusive of reasonable costs and expenses, regardless of the number of lawsuits filed or the number of private attorneys retained.
Last week, a complaint was filed by 72 Arkansas counties and 210 cities against 65 defendants tied to the opioid industry, including manufacturers, three wholesale distributors who control the market, five retail operations and five physician defendants. The complaint seeks a jury trial.
Four law firms have been hired by the cities and counties as outside counsel: Arkansas-based Rainwater, Holt & Sexton; Reddick Moss out of Little Rock; Wyly-Rommel out of Texarkana, Texas; and Birmingham-based Cory Watson Attorneys. Outside counsel will be awarded 21% of the judgment, according to Jerome Tapley with the Cory Watson firm.