Oklahoma could provide the first test of who will pay for the opioid crisis

(Sue Ogrocki | The Associated Press) In this Aug. 5, 2010, file photo, a pharmacy technician poses for a picture with hydrocodone and acetaminophen tablets, also known as Vicodin, at the Oklahoma Hospital Discount Pharmacy in Edmond, Okla. Opioids including Vicodin and fentanyl patches worked no better than Tylenol and other over-the-counter pills at relieving chronic back pain and hip and knee arthritis in a year-long study of mostly men at Minneapolis VA clinics. Both groups had slight improvement.

Oklahoma City • Big pharma is facing a major test in a small courthouse 20 miles south of here: the first trial at which a jury could decide whether drug companies bear responsibility for the nation’s opioid crisis.

Thousands of cities, counties, Native American tribes and others have filed lawsuits up and down the opioid supply chain, alleging various claims of culpability for the crisis that began with widespread abuse of powerful painkillers. Most of the cases have been consolidated in a major federal action in Cleveland. But as that case lags, smaller state cases like the one here in Oklahoma are quickly moving to hold companies to account, creating an early test of how costly the opioid crisis might be for the pharmaceutical companies that made billions of dollars off the drugs.

Oklahoma's case is scheduled to begin May 28 at a state courthouse in Norman. Judge Thad Balkman has repeatedly refused to delay the trial and has agreed to have it televised live every day, raising the prospect of nationwide coverage of grieving families and embarrassing internal company emails. Nearly 800 Oklahomans died of drug overdoses in 2017, about half of them from opioids.

"What happens there is going to set the standard for what happens after it," said Abbe Gluck, a Yale Law School professor, who predicted that the outcome in Oklahoma could provide leverage to the victor in the larger federal case to follow.

Thirty-six states filed cases in state courts, believing they will fare better in front of local juries that know the toll of addiction firsthand. The state cases have received far less attention than the mammoth case in Cleveland, where there are nearly 1,600 plaintiffs in an action known as multidistrict litigation, or MDL. If the trial holds to schedule, Oklahoma will be the first state to try a case in court.

The next few months will be critical to both cases.

Some believe the drug company defendants in Oklahoma — Purdue Pharma, Johnson & Johnson, Teva Pharmaceuticals, Actavis and others — will never risk a trial in that kind of venue, before a jury of Sooners who have seen the opioid epidemic’s impact on their communities.

"We feel confident in our case," said Oklahoma Attorney General Mike Hunter, who filed the lawsuit in 2017. "We'd like a jury of Oklahomans to hear our evidence and determine the extent to which these companies should be held accountable for what's happened in Oklahoma."

The state contends that the drug manufacturers' deceptive marketing of their products set off the epidemic and created a "public nuisance" that injured or endangered the health of Oklahoma's citizens. The state could seek more than $1 billion from the companies, either in a settlement or at trial, according to people familiar with the case.

Oklahoma's biggest target might be Janssen Pharmaceuticals, part of Johnson & Johnson. Janssen sells the Duragesic fentanyl patch and sold the opioid Nucynta until 2015.

Janssen said in a statement that "our actions in the marketing and promotion of these medicines were appropriate and responsible. The labels for our prescription opioid pain medicines provide information about their risks and benefits, and the allegations made against our company are baseless and unsubstantiated."

Purdue said in a statement that it "continues to have active discussions with attorneys general, and is fully engaged with the multidistrict litigation process outlined by Judge Polster to help communities address the opioid crisis," referring to U.S. District Judge Dan Aaron Polster of the Northern District of Ohio.

In Oklahoma, Purdue will argue that it controls a small share of the market for opioid drugs — about 2 to 3 percent. It claims its sales representatives and marketing initiatives are not responsible for deaths from illicit heroin and fentanyl, a powerful synthetic opioid manufactured overseas that is blamed for many opioid deaths in recent years.

"We believe strongly in our defense, and we believe we will prevail once the full facts are presented," the company said.

Polster has aggressively pushed the parties in his courtroom toward a settlement of what some call the most complex litigation in U.S. history. Polster has said his goal is not just recompense for the costs of addressing addiction and death; he wants to abate the epidemic by providing money for treatment and other needs. More than 47,000 people died of opioid overdoses in 2017.

Settlement talks are continuing, but the attorneys have missed Polster's goal of reaching a unified agreement last year.

On Wednesday, Polster admonished lawyers about speaking publicly about settlement negotiations or impugning the character of anyone in the case, reminding them of a gag order he issued last year and their responsibilities under the Ohio code of professional conduct.

At the same time, the judge has set an October trial date for three bellwether cases — from the city of Cleveland and two Ohio counties — designed to determine how plaintiffs and defendants might fare before juries. Defendants include not just pharmaceutical manufacturers, but opioid distributors, drugstore chains and pharmacy benefit managers.

State lawsuits like the one in Oklahoma could expose granular detail about the inner workings of the companies and their attitudes toward profits and the drug crisis. The cases already have revealed private Purdue emails that attorneys general say make the Sackler family — which owns the company — seem insatiably greedy and callous to the suffering opioid abuse has caused.

The company has been fighting a lawsuit in a Massachusetts state court, proceedings that led to the release of previously secret documents in support of allegations that Purdue deceived patients and doctors to persuade them to take higher doses of its painkiller OxyContin more often and longer.

That strategy came even after the company and three executives pleaded guilty to similar deception in 2007 and paid more than $600 million in fines.

"Millions of dollars were not enough. They wanted billions," the lawsuit alleges. "They cared more about money than about patients, or their employees, or the truth."

Massachusetts Attorney General Maura Healey said the case has been a top priority for her office.

"We have been devastated by the opioid crisis in Massachusetts," she said in an interview.

Purdue has said the lawsuit unfairly vilifies "a single manufacturer whose medicines represent less than two percent of opioid pain prescriptions."

In Utah, Attorney General Sean Reyes last month filed an administrative action alleging that Purdue and two members of the Sackler family violated the Utah Consumer Sales Practices Act. In a statement, Reyes said an administrative proceeding allows the state to obtain a judgment and recoup penalties faster than a court proceeding.

Bradley Beckworth, one of the private attorneys hired to represent Oklahoma, said individual states are better positioned to take on the drug companies than the huge amalgam of parties involved in the federal litigation.

"With over a thousand competing interests, the MDL process could be a real slow train," Beckworth said in an interview in the Oklahoma City office where he and other lawyers spend each week before returning to their homes in Austin. "In Norman, we have a court determined to start a trial May 28 with one focus: Oklahoma."

The lawyers, who sleep on beds in their offices, are sifting through more than 50 million pages of documents obtained during the discovery process, Beckworth said. They have taken hundreds of depositions. Next month, they will add two members of the Sackler family to the total, he said.

A settlement is far from certain. In the landmark 1998 deal between 46 states and the four largest tobacco companies — the case most often compared to the pharmaceutical litigation — four early state settlements prompted talks between the companies and the rest of the states, said Richard Ausness, a professor at the University of Kentucky School of Law, who tracks the cases.

Mississippi, which filed the first tobacco case in 1994, also settled first, for $3.6 billion, followed by Florida, Texas and Minnesota, which received larger amounts. Ultimately, the tobacco industry agreed to pay 46 states $206 billion over 25 years.

But in another comparable case, it took 16 trials, with drug company Merck winning 10, before the company agreed to settle with nearly 30,000 plaintiffs over the painkiller Vioxx. Merck eventually agreed in 2007 to give the plaintiffs $4.85 billion for claims that the painkiller increased the risk of heart attacks and strokes. The company also withdrew the product from the market.

In 2015, the state of Kentucky settled a case against Purdue for $24 million.

The current opioid cases are too complex, with too many actors, to make any predictions of how Oklahoma will affect the later cases, Ausness said.

"There are so many parties, and they're so dug in, and I think the real litigation and the most important litigation is the MDL," he said. "I would be willing to bet money it won't end on May 28 — at least May 28, 2019. Maybe May 28, 2030."

A serious concern among lawyers in the state and federal cases is the possibility that some companies might declare bankruptcy before plaintiffs collect potential settlements or awards.

Luke Barefoot, a New York bankruptcy lawyer, said civil litigation against a company would halt as soon as it declares bankruptcy. It would be much more difficult for any plaintiff to secure funds in bankruptcy court proceedings. The possibility of a bankruptcy filing could be used for protection or leverage in negotiations about penalties, he said.

"Anyone facing this magnitude of liability, and this kind of a threat to their operation going forward, would, I expect, consider filing and consider what strategic benefit this might bring them," he said.

A bankruptcy filing also could delay the trials.

According to media reports, Purdue last year hired a law firm to provide advice on financial restructuring as its potential liability from lawsuits mounted. People familiar with Purdue said the company would explore all available options, but there is no strong evidence that the company will imminently declare bankruptcy.

Should a major company in the lawsuit declare bankruptcy, Oklahoma law would allow the state to collect any damages from other defendants if it proves they are all liable.

The Washington Post’s Jeanne Whalen contributed to this report.