The first big opioids verdict is both big and small
Johnson & Johnson has officially been found liable in Oklahoma for deceptive and false marketing of opioids — the first major instance of legal accountability for the opioid epidemic.
Yes, but: If Oklahoma's $572 million judgment is a sign of things to come, states may only be looking at short-term relief — and drug companies may only incur short-term annoyances, rather than crippling penalties.
The big picture: Judge Thad Balkman wrote in his decision that J&J "pervasively, systemically and substantially" created a public nuisance by falsely promoting its opioids as safe and necessary, which led to massive overprescribing and addiction.
- Oklahoma had claimed J&J was the opioid "kingpin."
Why it matters: "This is the first time ... that a pharmaceutical company has been found responsible in the court of law for causing the opioid crisis," said Andrew Kolodny, a doctor and opioid researcher who was a key witness for Oklahoma in the case. "This is a landmark decision."
Between the lines: $572 million is just the 1-year cost of abating Oklahoma's opioid crisis, the ruling says.
- The state wanted $17 billion, but the judge said it didn't present enough evidence to validate a longer-term payout. One year of addiction treatment services and other programs is a Band-Aid.
- The judgment is less than 4% of J&J's net profit from 2018, and significancly less than the $2 billion some Wall Street analysts expected J&J to end up paying — and that's why shares of J&J and other related companies soared in after-hours trading.
- If this case is used as a benchmark in the national lawsuit, J&J likely would pay billions — but again, not an insurmountable amount for a company that brings in more than $80 billion of sales annually.
What they're saying: J&J plans to appeal, saying in a statement the judge's decision was "flawed" and that it is ready to extend this fight into 2021.
- Wall Street prognosticator Kevin O'Leary, among others, has urged J&J and other companies to "fight like hell through the litigation."