Cities, counties seek damages from big pharma

The Association of Arkansas Counties, Arkansas Municipal League and Arkansas Public Entities Risk Management Association have hired attorneys to sue the pharmaceutical industry for costs cities and counties have borne as result of what's been called the opioid crisis.

The lobbying/advocacy groups for the state's cities and counties rarely align behind a common cause, but the urgency needed to address the scourge of opioid addiction has made peculiar bedfellows.

"What's really amazing is that these groups have decided this issue is so important that they need to work together," said Ralph Ohm, APERMA's general counsel. "Most of the time we're friendly competitors, but we all believe this is of such critical importance that we need to join up to deal with this issue."

The Garland County Quorum Court and Hot Springs Board of Directors adopted resolutions last year authorizing the county and city to join the litigation, which so far has garnered support from 69 counties and more than 150 cities statewide.

Ohm said the Cory Watson Attorneys law firm of Birmingham, Ala., has been hired to pursue claims alleging that four pharmaceutical companies acted fraudulently and defied federal regulations for prescription drug practices.

The Rainwater, Holt & Sexton law firm of Little Rock has also been retained. Ohm said he expects the case to be filed in either federal or state court in the next few weeks.

"These companies have failed to comply with federal regulations dealing with dispensing and accounting of medications," Ohm said. "Courts in other jurisdictions have concluded that these companies engaged in fraudulent activity in regards to dispensing these medications.

"This is not a new theory. Cities and counties in other states have pursued these claims and have been fairly successful."

Ohm said local governments have typically sought damages individually. He called the multi-jurisdictional lawsuit bringing together the state's political subdivisions a "new twist," one he expects local governments in other states to follow.

The AAC and AML have said local governments' proximity to the effects of opioid abuse gives them a stronger claim against the pharmaceutical industry than the states, which sued tobacco companies in the 1990s to recover tobacco-related Medicaid expenses. They're still benefiting from the resulting multibillion dollar settlement.

Ohm said a damage computation could be based on the percentage of local government budgets dedicated to confronting the opioid problem. Costs resulting from jail overcrowding, training law enforcement personnel to administer heroin overdose antidotes, opioid-related criminal cases interfering with the court system's case flow management and health care costs such as ambulance expenses for cities and counties with ambulance service could all factor into the calculation, he said.

"We'll be conservative with our estimates, but this has become such a huge problem that the numbers will still be overwhelming," he said.

The problem has particular relevancy in Arkansas, where, according to the resolutions the quorum court and city board adopted last year, the rate of opioid prescriptions is the second-highest in the country. The 114.6 prescriptions per 100 residents last year compared to a national ratio of 66.5 per 100 residents.

Ohm said he's seen the problem become more manifest in Division 2 of Garland County District Court, where he serves as a part-time judge.

"Where I sit I see a lot of DWIs from prescription medications," he said. "It's not really the case so much any more of a guy going to a bar and getting drunk. DWIs are no longer confined to alcohol or illegal drugs since prescription drug abuse has been on the rise."

The AAC filed a federal fraud claim against the pharmaceutical industry in December to recover money its health insurance fund paid for opioid prescriptions. Purdue Pharma, Cephalon, Inc., Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals, are among the defendants.

The complaint alleges deceptive trade practices, such as paying doctors and advocacy groups to publicly support the use of opioids as a treatment for chronic pain, caused the AAC's health insurance fund to pay for medications that were over prescribed to beneficiaries. Adverse reactions and overdoses caused by the over prescribing led to further health care and administrative costs, according to the complaint.

The case was transferred to the U.S. District Court for Northern Ohio last month, joining multi-jurisdictional litigation that includes more than 40 political subdivisions in 16 states.

Local on 02/03/2018