Teva, Units Held Liable for Fueling N.Y. Opioid Crisis

(Bloomberg) -- New York jurors concluded Teva Pharmaceutical Industries and some of its units helped create a public-health crisis through their marketing and distribution of opioid painkillers across the state, in the pharma industry’s latest loss in the sprawling litigation over the highly addictive drugs.

The Israel-based firm now faces potentially billions of dollars in compensation claims from the state and two Long Island counties accusing Teva executives of flooding their areas with more than a billion opioids pills over nearly a decade and using misleading tactics to sell them.

Teva’s American depository receipts fell as much as 5.3% in New York trading, the most intraday since Nov. 3.

“Teva Pharmaceuticals strongly disagrees with today’s outcome and will prepare for a swift appeal,” Kelley Dougherty, a U.S.-based spokeswoman for Teva, said in an emailed statement. The state and local governments “presented no evidence of medically unnecessary prescriptions, suspicious or diverted orders, no evidence of oversupply by the defendants” and also failed to show “any harm to the public in the state,” she said.

Judge Jerry Garguilo will decide later how much the state and counties should get to beef up treatment and social-service budgets depleted by the U.S. opioid crisis, which has killed more than 500,000 Americans over the last two decades. A hearing on the compensation issue hasn’t yet been set.

‘Death and Destruction’

Jurors found Teva itself was 30% liable for harm created by its opioid marketing in Suffolk and Nassau counties while it was 40% liable for the problems across the whole state. Its units’ percentages of fault made up the remainder of 100%, according to the verdict form.

“A jury has found an opioid manufacturer responsible for the death and destruction they inflicted on the American people,” New York Attorney General Letitia James said in an emailed statement. “Teva Pharmaceuticals USA and others misled the American people about the true dangers of opioids.”

Jayne Conroy, one of the counties’ lawyers, noted the jurors deliberated for more than a week before finding against Teva and its units. She said the panel properly found “manufacturer Teva and distributor Anda cannot break the law for profit and cause deadly harm to our communities.”

Lawyers for Teva and Anda on Thursday asked Garguilo to throw out the verdict, saying the state and counties didn’t prove the companies created a public nuisance. They also pointed to the inconsistency in the percentage of fault Teva faces in the verdicts on behalf of the counties and the state as warranting a new trial.

Second Verdict

Thursday’s jury verdict is the second in the burgeoning four-year opioid litigation. Municipalities accuse opioid makers, distributors and sellers of downplaying the painkillers’ addiction risks and sacrificing patient safety for billions in profits. They also blame them for contributing to the deaths of more than 500,000 Americans in the opioid epidemic over the last two decades.

The state-court jury found Teva and subsidiaries including Anda Inc. and Cephalon Inc. created a so-called “public nuisance” by marketing the opioid-based drugs in a misleading manner and not properly monitoring suspicious shipments of the highly addictive painkillers. The panel concluded the marketing “contributed to, or maintained a substantial and unreasonable interference with a public right that amounts to a public nuisance,” according to the verdict form.

The trial over the governments’ claims began in June with more than 30 companies as defendants. By the end, only Teva and its units, including Cephalon Inc., Actavis Pharma and Watson Laboratories Inc., were left to face the six-person jury. That’s because other opioid makers, including Johnson & Johnson and Endo International Plc, drug distributors such as McKesson Corp. and Cardinal Health Inc. drugstore chains like Rite Aid Inc. and Walgreens Boots Alliance Inc., settled to get out of the trial.

The six-month trial, held in Suffolk County on Long Island, featured internal sales-conference videos produced by Cephalon that the governments alleged showed the company pushed opioid sales to beef up bonuses and put profit over consumers’ safety.

Dr. Evil

The panel saw a 2006 video based on a scene from the 1992 film “A Few Good Men,” that the Teva subsidiary used at a sales conference to promote its opioid-based drug, Fentora. 

Dressed in a Marine uniform, Roy Craig, a Cephalon sales manager, portrays Jack Nicholson’s character in the movie. “I have neither the time nor the inclination to explain ourselves to people who rise and sleep under the very blanket of revenue we provide and then question the manner in which we provide it,” Craig says on the video.

Lawyers for the governments also showed jurors a dubbed parody of the 1997 “Austin Powers, International Man of Mystery” movie in which the villain, Dr. Evil, portrays a Cephalon sales executive leading a Fentora marketing meeting. 

Dr. Evil -- played by actor Michael Myers -- ejects subordinate Will Ferrell into a fiery pit over his unhappiness with the new painkiller’s packaging and comes up with several aggressive marketing ideas. The video was made for a 2007 annual sales conference.

The case is In Re Opioid Litigation, Index no. 40000/2017, Supreme Court of New York, Suffolk County.

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