Purdue Pharma faces private-sector litigation

Stamford-based Purdue Pharma is the maker of the OxyContin prescription opioid. Stamford-based Purdue Pharma is the maker of the OxyContin prescription opioid. Photo: Toby Talbot / AP Photo: Toby Talbot / AP Image 1 of / 3 Caption Close Purdue Pharma faces private-sector litigation 1 / 3 Back to Gallery

Purdue Pharma and other prescription-drug makers and distributors are being sued in five states for private health-insurance costs allegedly spiked by the opioid crisis, in what the plaintiffs’ lawyers describe as unique litigation.

Filed last week in federal courts in Massachusetts, New Jersey, New York, Illinois and California, the class-action complaints seek to represent individuals and companies who have bought health insurance in those states since 1996. Their arguments parallel those in the hundreds of lawsuits filed in recent years by cities, counties and states against Purdue and other pharmaceutical firms that have sought accountability for opioid-related costs incurred by public agencies.

“We, too, allege Purdue and other opioid companies have perpetrated a massive fraud and are responsible for having created the opioid epidemic,” Travis Lenkner, managing partner of Chicago-based law firm Keller Lenkner LLC, one of the three firms representing the plaintiffs, said in an interview this week. “But our cases are different because we are seeking damages on behalf of the people and companies who have paid private health care costs that they shouldn’t have to pay.”

A message left Thursday for Purdue was not immediately returned.

Other defendants include Endo, Teva, Insys, the Janssen Pharmaceuticals unit of Johnson & Johnson, and distributors McKesson and Cardinal Health.

Health-insurance companies are neither plaintiffs nor defendants in the lawsuits because they essentially act as pass-through entities for the plaintiffs’ opioid-related expenditures.

Mounting costs

The complaints seek an unspecified amount of damages, but any financial award would likely be substantial given the size of the plaintiff group.

Insured patients with opioid abuse or dependence diagnoses cost health insurers more than average patients, according to the lawsuits. They cite data showing that in 2015 annual per-patient charges and allowed amounts for insured services for opioid-affected patients cost 550 percent as much as they did for the average insured patient.

From 2009 through 2016, Edward Grace, the lead plaintiff in the Massachusetts case, saw his monthly health insurance premiums rise from $93 to about $154, according to the complaint. In 2016, he switched to an “inferior” plan, with higher co-pays, because he said he could no longer afford the previous coverage.

“Some of every dollar you pay for insurance is going to pay for costs that would not exist if Purdue and other companies hadn’t created the epidemic,” Lenkner said.

In 2015, the opioid crisis cost the country $504 billion, or 2.8 percent of gross domestic product that year, according to an estimate in a November report from the Council of Economic Advisers, an agency that reports to U.S. presidents.

“It’s not surprising that private actors would follow the lead of the public sector,” said Robert Bird, a professor of business law at the University of Connecticut. “Plaintiffs’ attorneys see some kind of settlement or remedy is occurring between the public sector and the likes Purdue Pharma, and that encourages these kinds of actions to be filed.”

Other litigation

Meanwhile, a Cleveland-based federal judge is overseeing a consolidated multidistrict litigation comprising hundreds of complaints from local and state governments against Purdue, which makes the OxyContin prescription opioid, and other pharmaceutical firms.

Settlement discussions have made “good progress,” according to the presiding judge, Dan Polster, but three cases — two of which name Purdue as a defendant — could be heard in a trial starting next March.

Lenkner said he and his colleagues oppose moving the new cases to the multidistrict litigation because “we think the cases are best heard in the courts where they were filed.” But their venue would ultimately be decided in court.

At the same time, several hundred other lawsuits against Purdue and other pharmaceutical companies that are not included in the consolidated litigation are proceeding through the courts.

In Connecticut, a number of cases filed by cities and towns across the state have been grouped together and will be heard by Judge Thomas Moukawsher in state Superior Court in Hartford. Cities that have sued Purdue include Bridgeport, Waterbury and New Haven.

The state of Connecticut does not have an active lawsuit against Purdue, but state Attorney General George Jepsen belongs to a 41-state coalition of attorneys general who are investigating Purdue, five other major opioid makers and three distributors, as well as exploring settlements of potential claims against those companies.

Representatives of the coalition, which launched in 2016, are participating in the settlement discussions overseen by Polster.

A potential settlement that would emerge from the consolidated litigation would still include Connecticut and other states that have not sued, according to sources familiar with the process.

pschott@scni.com; 203-964-2236; Twitter: @paulschott