Big Pharma is having a Big Tobacco moment. The article in the Claims Journal reports that much like the tobacco litigation over the past 50 years, there is no precedent for the current opioid lawsuits.
But the growing opioid litigation seems to be following in the footsteps of the infamous tobacco litigation. In the 1950s, individual plaintiffs sued tobacco companies alleging negligence in the manufacture of and advertising for cigarettes. Tobacco fought back and prevailed in all of those early lawsuits. A second wave of lawsuits emerged in the 1980s, and plaintiffs found their first victory in the landmark case of Cipollone v. Liggett, although the $400,000 verdict was reversed on appeal. Tobacco successfully argued that smokers knew and knowingly assumed the risks and that federal law governing advertising preempted state laws.
Like the tobacco litigation, suits are now being filed by municipalities, counties, and states, claiming that the dangerous products have cost the government substantial sums of public funds to deal with the consequences of an opioid epidemic that was fueled by the defendants’ acts of placing these highly addictive prescription medications into the stream of commerce and “fraudulent” marketing regarding the safety of these analgesics.
Even insurance companies are waking up to the fact that they have had to pay billions in claim dollars as a direct result of this preventable epidemic. They too are lining up to seek compensation and reimbursement for increased workers’ compensation and health insurance claims costs that could amount to more than $25 billion. Lawyers working the opioid litigation against those responsible for the prescription opioid crisis recognize that billions have been spent unnecessarily by the insurance industry and are looking for insurance companies to join the litigation.
Last months’ issue of Medical Care magazine estimated that the societal cost of the U.S. prescription opioid epidemic tops $80 billion and is growing. Health insurers and workers’ compensation carriers shoulder about one-third of this cost, while only one-fourth of it is borne by the public sector. For employers and workers’ compensation carriers, this means that even employees who don’t fit the stereotype of drug users will struggle with this potentially deadly addiction.
The crisis has led directly to increased workers’ compensation costs. A 2012 report by Lockton Companies concluded that “prescription opioids are presently the number one workers’ compensation problem in terms of controlling the ultimate cost of indemnity losses.” The report says that there has never been a more damaging impact on the cost of workers’ compensation claims from a single issue than the abuse of opioid prescriptions for the management of chronic pain. It says that an estimated 55 to 86 percent of all claimants are receiving opioids for chronic pain relief.
A 2012 Hopkins-Accident Research Fund Study determined that employees prescribed even one opioid had average total claims costs four to eight times greater than employees with similar claims who didn’t take opioids. The reasons include increased emergency room visits from overdose, death, addiction treatment, related illness, and abuse and misuse of prescribed drugs. It is estimated that 35 percent of employees receiving long-term opioid pain treatment are addicted.
The increased claims costs of prescription opioids are astronomical. An annual workers’ compensation report from pharmacy benefit managing giant Express Scripts recently noted: “The issue of opioid prescribing becomes even more important in workers’ compensation settings as prolonged opioid use has been shown to be associated with poorer outcomes, longer disability, and higher medical costs for injured workers.” In 2002, less than 1 percent of injured California employees were prescribed opioids. By 2011, it was 5 percent and payments for these prescriptions rose from 4 to 18 percent – an astonishing 321 percent increase in payments.