Two municipalities sue over opioid crisis

Two Virginia localities are suing more than 30 pharmaceutical companies they say are responsible for opioid epidemics in their communities.

The City of Alexandria and Dickenson County filed lawsuits against manufacturers, distributors and pharmacy benefit managers March 14.

The local governments claim they are suing to recoup financial losses from “the public health emergency caused by prescription opioids.”

“We have to devote hundreds of thousands of dollars that weren’t budgeted before this problem exploded,” said Alexandria communications director Craig Fifer.

Widespread effects

The problem extends beyond Dickenson and Alexandria: Communities throughout Virginia are suffering, the lawsuits say.

While 2017 statistics are not yet available, a study performed by the Virginia Department of Health shows that from 2011 until 2016, the number of statewide prescription opioid and heroin overdose deaths rose from 649 to 1268.

Lawyers for Alexandria and Dickenson claim those areas were hit especially hard.

The complaint cites 465 deaths caused by overdoses in Dickenson County in 2016 alone. Dickenson’s population is less than 16,000, compared with Alexandria’s 160,000. Between 2012 and 2016, Alexandria had at least 44 residents die from opioid overdoses, the suit said.

“The opioid epidemic is not accidental. It is not a natural disaster. It is a man-made crisis,” plaintiff’s attorney Joanne Cicala, whose office is based in Texas, said in a press release. “This man-made crisis is costing Alexandria, Dickenson and communities like them dearly … Those who profited from it must be held accountable.”

Both lawsuits make the claim that the drug manufacturers intentionally misled doctors and patients about the benefits and risk of addiction of their products. They also claim distributors ignored their responsibility to report suspicious drug orders.

‘PBMs’ targeted

Nashville attorney Kevin Sharp, who also represents Dickenson and Alexandria, said that one thing that sets this lawsuit apart from others is that it goes after pharmacy benefit managers.

“PBMs are the really dirty secret about the pharmaceutical industry,” Sharp said in an interview. “Eighty to 90 percent of prescriptions go through them. They create the formularies that drug companies need for their drugs to be sold.”

PBMs came into being as a way to control prescription costs, Sharp said. Localities hire them to act as third-party administrators to decide which drugs are recommended to doctors. But, according to Sharp, the system is flawed, allowing manufacturers to give PBMs incentives to help them get drugs placed on higher tiers – meaning that they are more highly recommended to doctors and can be more easily sold.

Sharp said that it’s because of this complicit relationship with manufacturers that companies like CVS Caremark, Express Scripts and OptumRx are included in the suit.

The three companies listed in the suit made up more than 70 percent of the market in 2016, Sharp said. “They’re making their rebates.

“The industry revenue is $420 billion with an annual growth of 12 percent,” he said.

Both damages and injunctions sought

Dickinson is seeking $30,000,000 in damages while Alexandria is seeking $100,000,000. Both also are asking for punitive damages worth $350,000 per defendant and orders compelling the defendants to stop their “unlawful conduct.”

Sharp said the damages are based on best estimates of what the two local governments are currently spending on fighting the opioid epidemic and what they anticipate spending in the future.

More important to the localities than the money is the provision that seeks to get the drug companies to change the way they do business.

“We also hope the lawsuit will result in the defendants making changes that will keep people from getting hurt in the future,” Fifer said. “Because this is not primarily a financial problem. This is primarily a human problem, but with a great financial cost.”

Fifer described a number of programs and task forces that are working together in his community to provide resources for everything from prevention to emergency services to recovery to helping those who are indirectly impacted by addiction. He stressed that the lawsuit is just one of the ways that his community is combating the problem.

Sharp said that the damages are just the tip of the iceberg when it comes to fighting addiction.

“We’re losing an entire generation of people, and not just the people addicted, but the ripple effects of the parents and spouses and children who then have to be picked up by social services,” Sharp said. “Somebody has to pick that cost up and somebody has to work together to come up with the ideas of how to solve this problem, long term. We’ve got a lot of work ahead of us.”

The defendants include a long list of opioid manufacturers, including Purdue Pharma, the manufacturer of OxyContin; Mallinckrodt Pharmaceuticals, which makes Roxicodone and oxycodone; Endo Health Solutions which makes Opana and Percocet; Janssen Pharmaceuticals, which makes Duragesic; and Actavis Pharma, which owns or was formerly known by the following names: Abbot Laboratories, Watson Laboratories, Allergan, Actavis Pharma and makes Kadian and Norco and other generic versions of other opioids.

The distributors included in the suit are Insys Therapeutics, McKesson Corp., Cardinal Health and AmerisourceBergen Corp.

The pharmacy benefit managers involved in the suit are Express Scripts, CVS Caremark, Unitedhealth, OptumRx and affiliated companies.

McKesson Corporation responded to requests for comment by saying they are “committed to maintaining – and continuously enhancing – strong programs designed to prevent opioid diversion within the pharmaceutical supply chain.”

In a statement, representatives said that the company has reported the sale of controlled substances to the DEA for decades, and that in just the past year they have reported “hundreds of thousands” of suspicious orders while refusing to fill them. McKesson said they only distribute opioids to pharmacies that are state-licensed and registered with the DEA.

“We only distribute in response to orders that pharmacies place – we do not drive demand,” the company concluded in their statement.

A representative from Endo Health Solutions said that they do not comment on current litigation.

Other requests for comment from defendants went unanswered.

Lawyers with the Norfolk office of Kaufman & Canoles PC are local counsel for the two lawsuits, according to W. Edgar Spivey of that firm.