A court in Oklahoma has ordered Johnson & Johnson to pay more than half a billion dollars over allegations that it helped to fuel the opioid crisis.
The Cleveland County District Court in Norman, Oklahoma, issued a civil judgment requiring the drugmaker to pay $572 million. Judge Thad Balkman ruled that J&J had created a “public nuisance” in the state.
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The company said it plans to appeal the decision, which it called “flawed.”
“Janssen did not cause the opioid crisis in Oklahoma, and neither the facts or the law support this outcome,” J&J general counsel Michael Ullman said in a statement, referring to the drugmaker’s Janssen Pharmaceutical Companies subsidiary. “We recognize the opioid crisis is a tremendously complex public health issue, and we have deep sympathy for everyone affected.”
J&J went on to say in its statement that the decision was not consistent with the facts or the law. It said the state failed to present evidence that J&J’s products or actions caused a public nuisance in Oklahoma. It also said the state disregarded 100 years of precedent in public nuisance law, adding that it had traditionally been applied to resolve property disputes rather than lawsuits involving the sale of goods.
Shares of J&J were up nearly 2 percent in after-hours trading on the New York Stock Exchange following the ruling.
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In a note to investors, SVB Leerink analyst Ami Fadia wrote that although the amount is higher than the $270 million that Purdue Pharma had to pay, or the $85 million judgment against Teva Pharmaceutical Industries, it is still much lower than the $17.2 billion that Oklahoma Attorney General Mike Hunter had been seeking. Moreover, citing numbers from IQVIA, Fadia wrote that J&J’s opioid sales historically were lower than those of Purdue and Teva.
The relatively modest size of the penalty against J&J means that the stocks of other companies with opioid exposure – such as Teva, Endo Pharmaceuticals, Mylan and Amneal Pharmaceuticals – may be up in the markets Tuesday, Fadia wrote.
Fadia also wrote that the negative ruling against J&J has little direct read-through to the outcome of the upcoming multidistrict litigation, or MDL. For one, she wrote, J&J’s opioid sales were mainly in branded products, while the sales of the other companies have been primarily or even exclusively generics. Also, Balkman did not grant generic preemption, and the MDL could provide a more comprehensive forum for generic drugmakers to present their arguments.
Photo: fstop123, Getty Images
