SF Says Pharmaceutical Cos. Created City’s Opioid Crisis

Posted on Posted in Opioids

By Bonnie Eslinger ·      

Law360 — A lawyer for San Francisco has told a California federal judge overseeing a bellwether bench trial in multidistrict opioid litigation that AndaAllergan, Teva and Walgreens promoted and distributed the powerful painkillers in ways that created a public nuisance that endangered the health and safety of the city’s residents.

Thursday’s proceedings — a discussion requested by U.S. District Judge Charles R. Breyer of the law at issue in the high-stakes litigation — follows nearly seven weeks of trial and after both sides rested their case in chief.

A lawyer for San Francisco, Andrea Bierstein of Simmons Hanly Conroy LLC, kicked off the day by going over the basics of the public nuisance claim against all the defendants, saying that under California law a nuisance is “anything which is injurious to health, including but not limited to the illegal sale of controlled substances” and that a public nuisance “affects at the same time an entire community or neighborhood, or any considerable number of persons.”

Bierstein also cited a 2017 California appellate court decision in a case over lead paint contamination, People v. ConAgra Products.

That decision held that a public nuisance cause of action can be established by showing a defendant “knowingly created or assisted in the creation of a substantial and unreasonable interference with a public right.”

That decision also found that a harm is substantial and unreasonable “if its social utility is outweighed by the gravity of the harm inflicted.”

The ConAgra decision and other case law backs San Francisco’s case, she said.

“The people rely on two types of affirmative conduct … the defendants’ promotion of opioids through false or misleading statements and representations and the defendants’ failure to provide effective controls against diversion of prescription opioids as required by law,” Bierstein told the court.

Under California law, misrepresentations are not limited to false statements; a partially true statement can be misleading if material information has been omitted, Bierstein said.

“Simply pointing out that among the statements made are some true statements does not mean you don’t have misrepresentation,” the lawyer said.

The defendants have suggested that the state legislature, in passing the California Intractable Pain Treatment Act, encouraged the increased prescription of opioids, finding that the benefit outweighed the risks, Bierstein noted.

“The California legislature did not envision doctors who were misinformed by the defendants,” the lawyer said. “What that statute was relying on was knowledgeable ethical and experienced pain management practitioners to prescribe opioids safely.”

Instead, doctors were misled by the marketing efforts of the drug companies, Bierstein said, “so that no doctor was really able to be knowledgeable and weigh the risks and benefits accurately.”

The Simmons Hanly Conroy lawyer also pointed to a federal law that requires all pharmaceutical companies registered with the U.S. Drug Enforcement Administration to provide effective controls and procedures to guard against theft and diversion of controlled substances.

In addition, the federal Controlled Substances Act imposes legal duties on the defendants with respect to the distribution of opioids, includes the duty not to ship suspicious orders.

“The law is clear on that, controls can’t be effective, if you identify a suspicious order, which you’re required to do, and then you say, ‘Oh, this looks suspicious; it may be subject to diversion. I’ll just ship it out anyway without asking questions,” Bierstein said.

Bierstein said Congress factored in the benefit of drugs like opioids when it enacted the CSA, and balanced the risks with anti-diversion requirements.

“The issue is whether the controls they designed and implemented were or could have been effective and whether they distributed or dispensed in the absence of such controls,” the lawyer for San Francisco said. “There’s a large volume of stuff that should have been caught by effective controls and wasn’t.”

A lawyer for Teva, arguing on behalf of all the defendants, said context matters when assessing the plaintiffs’ public nuisance claim.

“The products at issue are legal medicines with undeniable social utility,” said Collie James of Morgan Lewis & Bockius LLP. “They were approved by the FDA despite well known risks, they’re manufactured, marketed, distributed, prescribed and dispensed within a tightly regulated industry with many stakeholders.”

In addition, to makes its case, San Francisco has to go through the total volume of prescriptions that were issued in San Francisco over the last two decades and remove those that were medically appropriate.

Those, “cannot be part of the public nuisance, and it certainly cannot be liability for these defendants for the adverse consequences,” James told the court.

James noted that in a recent opioid case in Southern California, the judge held that any negative outcomes that result from medically appropriate prescriptions cannot constitute an actionable public nuisance.

In that case, Orange County Superior Court Judge Peter J. Wilson held last year that four major drugmakers were not liable for the opioid crisis in the state.

“The federal government and the California legislature have already determined…the social utility of medically appropriate prescriptions outweighs the gravity of the harm inflicted by them,” Judge Wilson said in that case.

James also pressed the point that the court must find that the defendants conduct was substantial and unreasonable and caused the alleged harms.

The Con-Agra case cited by San Francisco made it clear that it has to be shown that a defendant knowingly created the public nuisance, Teva’s lawyer said.

“That’s an important distinction here,” James said. “It has to be knowledge that your activities caused the crisis that’s alleged today.”

During rebuttal, Bernstein said the plaintiffs don’t have to show that defendants filled orders for illegitimate prescriptions or shipped orders that were diverted for illegal uses.

“It’s enough to show that if you ship enough suspicious orders with no due diligence and if you fill enough red flag prescriptions with no due diligence … that a fact finder can reasonably draw the inference that that lead to diversion,” she argued.

Amid thousands of opioid crisis lawsuits across the country, the San Francisco bellwether, which kicked off on April 25, is the first trial to rope together defendants across the pharmaceutical supply chain: from manufacturing to distribution to pharmacy dispensing.

Judge Breyer, who put strict time limits on the trial, noted on June 27 that both sides wrapped up their cases within their allotted 45 hours, prompting him to wonder to courtroom chuckles if he “was just too generous.”

Closing arguments for the case are scheduled for three days, with four hours each day, starting on July 12.