API Manufacturers Beware – New Washington Opioid Lawsuit Targets J&J’s API Business
By Dr. Seth B. Whitelaw[1]
As predicted, the epidemic of opioid-related lawsuits continues to pick-up steam with the State of Washington’s latest suit filed on January 2nd against Johnson & Johnson (“J&J”) and several of its subsidiary companies. While the new suit follows the well-trodden pathways of previous claims against opioid manufacturers (e.g., deceptive marketing practices and public nuisance), Washington becomes the second state to link J&J’s liability to its production of an active pharmaceutical ingredient (“API”).
Oklahoma & “The Mutant Poppy Strain”
Last September and October, we reported on Oklahoma’s successful attempt to hold J&J accountable for that state’s opioid crisis in our sister publication Policy & Medicine Compliance Update.[2] While the theories of public nuisance and J&J sales and marketing activities garnered most of the attention, it was the theory that J&J should be liable because of its API manufacturing activities that presented perhaps the greatest threat to the pharmaceutical industry because it targeted not only the makers of final products but others in the supply chain.
According to Oklahoma’s theory, J&J “profited by manufacturing raw ingredients for opioids and then selling them to other companies, including Purdue, which makes Oxycontin.”[3] The State’s expert, Dr. Andrew Kolodny, the co-director of Opioid Policy Research at the Heller School for Social Policy and Management at Brandeis University testified that J&J coordinated with Purdue “to produce a new strain of poppy rich in thebaine, a type of opioid, to supply the expected rising demand for Oxycontin.”[4]
The verdict against J&J solidified the “mutant” poppy strain argument against J&J and other pharmaceutical companies involved in the manufacture of APIs, suggesting that any company that had any involvement with the manufacturing supply chain for opioids, whether directly or indirectly, can be subject to legal liability.[5]
Washington Follows Oklahoma’s Lead
In most respects, this latest suit by the State of Washington mirrors Oklahoma’s suit alleging violations of the State’s Consumer Protection Act, public nuisance, and common law negligence. Furthermore, Washington parrots Oklahoma’s theory that J&J’s API manufacturing business contributed to the opioid epidemic, because:
By 2015, Janssen’s [a J&J subsidiary] ‘Noramco World Wide Narcotics Franchise’ comprised of Noramco and Tasmanian Alkaloids, had become the top supplier of narcotic APIs in the U.S., the world’s largest market.[6]
As a result, J&J’s ability to supply the necessary raw materials to Purdue, Teva, and other U.S. manufacturers allowed these manufacturers to significantly increase the supply of opioid products available in the U.S. helping to fuel the opioid crisis. In other words, Washington contends that without J&J’s worldwide ability to supply opioid APIs, the epidemic would have been contained or curtailed by the limited supply of opioid products.
Conclusion
Whether or not one agrees that API manufacturers should be held responsible, in part, for the opioid epidemic, the suits in Washington and Oklahoma are a clear signal to all pharmaceutical company executives and compliance professionals that social responsibility considerations need evaluation, regardless of where the company fits in the supply chain. This need is especially true when a company’s products are involved in a true public health crisis. It is a point we made in the December issue of the Update.[7]
[1] Dr. Whitelaw serves as the Editor of the Policy & Medicine Compliance Update. He also is the President and Chief Executive Officer of the Whitelaw Compliance Group, LLC. and teaches compliance as a Senior Fellow & Adjunct Professor, Life Sciences Compliance with Mitchell Hamline School of Law.
[2] See R. Wilkey, Opioid Case Test the Boundaries of Liability – Oklahoma, J&J and the “Mutant Poppy Strain”,” 5.9 Policy & Medicine Compliance Update 1 (2019); R. Wilkey, Oklahoma, J&J and the “Mutant Poppy Strain” – The Settlement, 5.10 Policy & Medicine Compliance Update 7 (2019).
[3] See Dan Fischer, At opioid trial, Johnson & Johnson moves to strike Oklahoma witness as ‘de facto member of State’s legal team’, Legal Newsline (Jun. 18, 2019), https://legalnewsline.com/stories/512646956-at-opioid-trial-johnson-johnson-moves-to-strike-oklahoma-witness-as-de-facto-member-of-state-s-legal-team.
[4] Id.
[5] See Thomas Sullivan, Opioid Case Tests the Boundaries of Liability – Oklahoma, J&J and The “Mutant Poppy Strain” Policy & Medicine, (Sept. 13, 2019), https://www.policymed.com/2019/09/opioid-case-tests-the-boundaries-of-liability-oklahoma-jj-and-the-mutant-poppy-strain.html.
[6] See Compliant for Injunctive Relief and Other Relief Under the Consumer Protection Act, Pubic Nuisance, and Other Negligence at ¶4.115, State of Washington v. Johnson & Johnson, et al (Jan 2, 2020, WA Superior Court, King County).
[7] See S. Whitelaw & J. Murphy, Rethinking the Pharma Compliance Profession II: Moving Beyond Ethics, Compliance & Risk towards Social Responsibility, 5.12 Policy & Medicine Compliance Update 8 (2019).