J&J, McKesson Face $8 Billion Damage Demand in Ohio Opioid Trial

(Bloomberg) -- Johnson & Johnson, McKesson Corp. and other opioid makers and distributors face demands they pay as much as $8 billion to cover fallout from a public-health crisis tied to the addictive painkillers in the first federal trial over the medicines.

Officials of two Ohio counties whose claims are slated to be heard by a jury in Cleveland next month contend the money is needed to combat an epidemic in their areas, allegedly created by illegal marketing and lax oversight of the painkillers, according to court papers.

The $8 billion was disclosed Saturday by distributors, such as AmerisourceBergen Corp. and Cardinal Health Inc., in a court filing seek to bounce Cleveland federal judge Dan Polster from the massive opioid liability case, claiming he’s biased against them. If the move is successful, it would delay the first federal trial over responsibility for the opioid crisis.

Polster earlier this week approved creation of a plaintiffs’ negotiating group to hammer out a deal between pharmaceutical industry players and the more than 2,000 cities and counties that have filed suit against them over the opioid abuse crisis.

Ohio Counties

Andrew Wheatley, a J&J spokesman, didn’t immediately return an email Saturday for comment on the $8 billion demand. Kristin Chasen, a McKesson spokeswoman, also didn’t return an email.

Officials of Cuyahoga and Summit counties will argue in the Cleveland case that J&J and other opioid makers used illegal marketing campaigns into duping doctors to ramp up painkiller prescriptions for unapproved uses so the companies could reap billions.

They also will target drug distributors, such as McKesson, for failing to provide proper oversight of shipments to help keep the addictive medicines out of addicts’ hands. They also will take aim at pharmacy chains, such as CVS Health Corp., for allegedly turning a blind eye to frequent retail purchases of the painkillers.

The counties will ask jurors to hold the companies responsible for creating a public nuisance -- through their mishandling of the painkillers -- that requires the current and future expenditure of billions on societal costs spawned by the crisis. The $8 billion would go to beef up treatment, policing and family services budgets over the next decade.

Favorable Comments

Some of the defendants contend that Polster can’t objectively oversee the sprawling opioid litigation because he’s made repeated comments that favor local governments. The judge is overseeing more than 2,000 suits filed by municipalities.

Citing comments made by Polster at the outset of the case in January 2018, the drug distributors and retailers contend he tipped his hand then about who must pay to reduce the problem and has maintained that stance in court, and in public statements, ever since.

They also criticized him for stating early on, “My objective is to do something meaningful to abate this crisis and to do it in 2018.”

“Defendants do not bring this motion lightly,” the companies said, adding that with demands for cash to abate the crisis, Polster has decided that he, not a jury, has discretion to decide how much the defendants must pay.

‘Desperate Move’

Judicial ethics rules generally require judges to not only maintain impartiality, but to also avoid even the appearance of being partial. It’s unclear what will happen if Polster denies the request, but it would certainly set a ground for appeal, should the drug companies lose that first trial.

Attorneys Paul Hanly, Paul Farrell and Joe Rice, who are leading the local governments’ cases, criticized the removal bid in an emailed statement, calling it “a desperate move on the eve of trial” by companies that helped fuel the abuse epidemic.

They noted the motion was filed only after Polster denied a defense motion to throw out municipalities’ claims opioid makers had created a public nuisance and should face racketeering and conspiracy claims.

Among those companies joining in the motion to remove Polster are McKesson, Henry Schein Inc., Walmart Inc., and units of pharmacy chain Walgreen Boots Alliance Inc. No drug-makers participated in the Polster recusal motion.

The case is In Re National Prescription Opioid Litigation, 17-md-2804, U.S. District Court, Northern District of Ohio (Cleveland).

To contact the reporters on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net;Andrew Harris in Washington at aharris16@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Steve Geimann

©2019 Bloomberg L.P.