Case Type: Public Interest Litigation
Companies: Opioid Manufacturers, Distributors, and Pharmacy Benefit Managers
The City of Galax, Virginia and Giles County, Virginia, represented by Sanford Heisler Sharp, LLP, Kaufman & Canoles, P.C., and The Cicala Law Firm PLLC today initiated legal action against opioid manufacturers, distributors, and pharmacy benefit managers (PBMs) for their role in creating the public health emergency caused by prescription opioids.
Galax and Giles County filed the lawsuits in state court against more than 15 opioid manufacturers, distributors, and PBMs — including pharmaceutical titan Purdue Pharma and worldwide distributor McKesson. The lawsuits allege that each defendant contributes to the opioid crisis in Southwest Virginia—drug manufacturers make the drugs and mispresent the truth about their benefits and addiction risks to doctors and patients; wholesale distributors ignore their responsibilities to report and stop suspicious orders of opioids leading to drug diversion to the black market; and PBMs leverage their role as middlemen to increase the flow of opioids into the marketplace. Galax and Giles County have alleged violations of statutory and common law public nuisance, the Virginia Consumer Protection Act, fraud, common law conspiracy, negligence, and unjust enrichment.
The defendants include manufacturers Purdue Pharma, Abbott Laboratories, Endo Pharmaceuticals, Mallinckrodt Pharmaceuticals; Teva Pharmaceuticals, Janssen Pharmaceuticals, Cephalon, Inc., Barr Laboratories, Inc., Actavis Pharma, Watson Laboratories, Inc., Allergan PLC, and Insys Therapeutics; distributors AmerisourceBergen Drug Corp., Cardinal Health Inc., and McKesson Corp.; and PBMs Express Scripts, Inc., CVS Health; United Health Group Inc., and OptumRx, Inc.
The harmful impact of opioids in Galax and Giles County cannot be overstated. The rate of emergency department visits for opioid overdoses, which was high in Galax to begin with, jumped from four times the statewide rate in 2015 to five times the statewide rate in 2016 and more than six times the statewide rate in 2017. In Giles County, the rate of Neonatal Abstinence Syndrome has been alarmingly high, and peaked in 2014 at more than eleven times greater than the statewide rate in Virginia. The rate of reported Hepatitis C cases in Galax and Giles County has been high, and in Galax, it peaked at an alarmingly high rate of 2,832 cases per 100,000 adults in 2015. That rate is more than thirty times greater than the statewide rate that year. Both communities have lost numerous citizens to opioid overdoses in recent years.
As relatively small municipalities, the financial cost of the opioid epidemic has been tremendous for Galax and Giles County. For example, the influx of opioids into Galax has led to a startling rise in the need for foster care and other child placement services in the City. Over the last five fiscal years, the City’s spending on foster care and related child-placement services increased 178%. Giles County has borne a similarly significant financial burden as a result of the opioid epidemic. For example, the County’s mandatory contribution to the New River Valley Regional Jail has increased by 49% over the last seven years because of an increase in the number of inmates from Giles County. This increase in the inmate population is directly correlated with an increase in criminal activity attributable to the opioid epidemic. The lawsuit aims to recover these costs and costs associated with the purchase of opioids prescribed to City and County employees.
“We are pleased to represent Galax and Giles County as they seek to hold the defendants accountable for their reprehensible actions and recover the funds these communities have spent to address the impact of the opioid crisis. The citizens of Galax and Giles County deserve justice for the harms inflicted upon them by the defendants and our respective firms are proud to take on this fight on their behalf,” said Kevin H. Sharp of Sanford Heisler Sharp, LLP.
Joanne Cicala added, “the opioid epidemic is not accidental. It is not a natural disaster. It is a man-made crisis. And worse – the companies that did this were not just seeking to build market share – they knew they were creating addicts. No local government wants to have to file a lawsuit. Local governments have enough to do already, providing services to the public on tight budgets. But this man-made crisis is costing Galax, Giles County, and communities like them dearly – and so they must respond. Those responsible for this epidemic – those who profited from it – must be held accountable for its costs.”