Drug Firms Blame Opioid Crisis on Illicit Websites, Dealers

(Bloomberg) -- Two pharmaceutical companies say the real culprits in the opioids epidemic are illegal dealers of the painkillers and want them to be on the hook financially for any damages potentially assessed against drugmakers.

Endo International Plc and Mallinckrodt Plc sued a host of convicted drug dealers and Internet sites this week for illegally offering opioids. Among them: RxCash.Biz, which offers misbranded opioids online, an Italian man indicted for of operating so-called pill mills, and a Tennessee resident who’s serving 10 years for possessing fentanyl with an intent to distribute.

The companies also named Tennessee counties and towns, seeking a ruling that effectively limits the firms’ financial responsibility over claims they fueled a public-health crisis through their marketing of the prescription painkillers.

The suit, filed July 16 in state court in Kingsport, Tennessee, comes almost two months after a Tennessee judge rejected Endo’s and Mallinckrodt’s push to have the Tennessee municipalities’ opioid suit thrown out. Tennessee Attorney General Herbert Slatery III also sued opioid makers in May, saying their marketing of the drugs as nonaddictive violated federal and state laws.

If lawyers for Tennessee cities and counties persuade a jury to tag Endo and Mallinckrodt with millions in damages over their opioid sales, the drugmakers argue, they “are entitled to contribution from the illegal supply chain defendants,’’ according to court filings.

Gerard Stranch IV, a lawyer for Sullivan County, Tennessee, which is among the municipalities that sued the companies, said the case is frivolous.

"They’re basically suing us for not having enough body bags on hand to clean up after their mess," he said. "It’s a PR stunt. What they’re trying to do is intimidate other cities and counties from filing these lawsuits against them."

Endo and drugmakers Johnson & Johnson and Purdue Pharma LP are among the companies in talks with state attorneys general and lawyers representing cities and counties seeking a resolution of cases accusing the companies in the crisis. A judge in Cleveland overseeing the consolidation of local governments’ opioid suits has said he wants a deal that goes beyond money, addressing the companies’ business practices and the roots of the crisis that claims the lives of more than 100 Americans daily.

Endo, which makes the drug Opana, and Mallinckrodt, which produces a generic version of Oxycodone, say that 90 percent of opioid overdoses “involve illegal, non-prescription opioids and the majority of those who misuse prescription medications obtain their pills illegally.’’

Pharma companies have no duty to deter “illegal pill mills and unscrupulous doctors who divert legal drugs for illegal purposes,’’ their lawyers noted.

"This is the first in the nation type of filing that properly describes the cause of the so-called opioid epidemic as the true source, which is the illegal supply chain, which has been documented by regulators, the scientific community and even some of the authorities connected with the plaintiffs themselves," said John Hueston, an outside attorney for Endo.

Stranch said the companies’ complaint cites a database the cities and counties don’t have access to, and pointed out that the drugmakers didn’t use that information to help stem the epidemic. He said that the companies are challenging findings that the court already made and trying to re-litigate the case.

He said he asked for information about any diversion of opioids to potential pill mills, as well as the identities of doctors suspected in overprescription or diversion activities and the drugmakers have refused to provide them.

Barry Staubus, Sullivan County’s district attorney, said the suit is without merit. Under Tennessee law, prosecutors can bring such civil cases on behalf of the residents of their counties.

"We’ve been inundated by opioids and we’ve done the best we can," he said. "They’re trying to shift responsibility from themselves to someone else."

Other plaintiffs include two other district attorneys and a baby, who allegedly was born with neonatal syndrome because of exposure to opioids. The two lawyers couldn’t be reached for comment.

“The whole idea is ridiculous,’’ said Paul Hanly, a New York-based plaintiffs’ lawyer and one of the leaders of the Cleveland process. “I don’t see why the drug companies think they should be absolved from liability for the conduct of third parties. I don’t think it will fly.’’

In its filing, Endo and Mallinckrodt seek a ruling barring the municipalities from challenging in the future a jury’s division of damages between the companies and the drug dealers.

The case is Endo Health Solutions Inc v. Alfa Bay, No. C-41916, Div-C, Sullivan County Circuit Court (Kingsport, Tennessee)

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