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Morning Briefing

Summaries of health policy coverage from major news organizations

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Wednesday, Aug 28 2019

Full Issue

How Johnson & Johnson, Best Known For Baby Powder And Band-Aids, Became A Leading Supplier Of Opioid Ingredients

The Oklahoma opioids case exposed cracks in Johnson & Johnson's reputation, some say. The New York Times looks at the company's history and where it got involved in the epidemic. In other news on the national drug crisis: questions about where to spend opioid settlement money bubble up; analysts try to guess how the Oklahoma settlement will effect others; and more.

In the 1980s, Johnson & Johnson needed a reliable supply of opium for a popular product, Tylenol with codeine. So the health care conglomerate, better known for baby shampoo and Band-Aids, bought a business that grew and processed opium poppies in faraway Tasmania, off the coast of Australia. By 2015, at the height of the nation鈥檚 opioid epidemic, Johnson & Johnson was the leading supplier for the raw ingredients in painkillers in the United States. It even developed a special strain of poppy, called Norman, that produced a core painkilling agent used in OxyContin, which would become Purdue Pharma鈥檚 blockbuster drug. (Thomas and Hsu, 8/27)

Larry Biegelsen, an analyst at Wells Fargo & Co., wrote in a note to clients after speaking with Johnson & Johnson management that the verdict is a 鈥渘et positive鈥 for the New Brunswick, N.J., company, because of how much less it was when compared with the $17.5 billion requested by the Oklahoma attorney general. Analysts at Raymond James Equity Research said they were disappointed with Judge Balkman鈥檚 decision, adding that if J&J were skilled at convincing physicians to prescribe their drug, then its market share would be higher than 1%. Both analysts rate the company 鈥渙utperform.鈥 (Hopkins, 8/27)

Oklahoma's legal fight against the opioid industry has racked up settlements and judgments of nearly $1 billion, but as the numbers keep rising, so do concerns over how that money will be spent. Experts say the $572 million judgment issued Monday against consumer products giant Johnson & Johnson could pay for a year's worth of statewide drug-treatment efforts. But the company has already announced plans to appeal, which could tie up the money for years. Meanwhile, addiction counselors worry about when their clients might get more help. (Murphy, 8/27)

Now that an Oklahoma state court judge has ruled Johnson & Johnson (JNJ) must pay $572 million to the state for contributing to the opioid crisis there, Wall Street is engaged in a parlor game seeking to answer a key question: How will this decision affect the massive amount of litigation elsewhere? Sorting this out takes us in a number of directions because there are lawsuits filed against different drug makers in different states, along with a huge case consolidated in a federal court in Cleveland. There are also varying legal issues in play, increasing pressure to reach settlements, and uncertainty about the extent to which drug companies have the ability to reach any number of deals. (Silverman, 8/27)

Attorney General Dave Yost is backing new legislation that would seek to allow his office to take over nearly 100 pending lawsuits filed by Ohio cities and counties against opioid manufacturers and distributors. The legislation, which has not yet been introduced in the Ohio General Assembly, also might -- according to at least one critic -- give the attorney general control over pending lawsuits involving sexual misconduct by former Ohio State University team doctor Richard Strauss and Columbus-area doctor William Husel, who has been accused of ordering potentially fatal doses of painkillers for 25 of his patients. (Pelzer, 8/27)

New Hampshire will have its own day in court in a lawsuit against Big Pharma next June, according to a state official overseeing four state lawsuits that challenge the marketing and distribution practices of opioids. But despite the potential for a multi-million dollar award, it won鈥檛 be enough to compensate for the lives and human potential lost to opioids, said James Boffetti, an associate New Hampshire attorney general and director of the Attorney General Division of Legal Counsel. (Hayward, 8/27)

The Ohio hospital system that found an intensive care doctor ordered excessive painkillers for about three dozen patients who died has reached settlements totaling $9 million in lawsuits over two deaths, which would be the highest known payouts so far in the related wrongful-death lawsuits. The latest cases settled by the Columbus-area Mount Carmel Health System alleged Dr. William Husel ordered drugs that caused the death of 58-year-old Donald McClung last September and hastened the death of 75-year-old Rebecca Walls in November, according to court records. (Franko, 8/27)

Kaiser Health News: In India鈥檚 Burgeoning Pain Market, U.S. Drugmakers Stand To Gain

Pain, like death, is a universal phenomenon. The sour grimace on the woman鈥檚 face, registering her bodily complaints to Dr. G.P. Dureja in his East Delhi office, would be recognized anywhere. Slouched shoulders, pinched forehead. She wore a willowy black kurta and cast a disapproving glance at the five pain physicians-in-training huddled behind Dureja, founder of Delhi Pain Management Centre and one of India鈥檚 pioneering pain physicians. (Varney, 8/28)

This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
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