The War on Drug Makers: Kentucky's New Angle to Hold Big Pharma Accountable Draws on Successes Against Big Tobacco

Katy Meyer, KLJ Staff Editor

While Kentucky may be nationally renowned for its basketball, bourbon, and horses, it has also achieved infamy on the national stage for its continued struggle with prescription drug abuse and addiction.¹ To combat this epidemic, Kentucky legislators and government officials have been forced to take new, and often creative, steps. One example of this is Kentucky’s lawsuit against Purdue Pharma, L.P.²To date, there have been very few successful cases holding drug manufacturers accountable for the effects of their drugs, as most have been dismissed on summary judgment.³ However, Kentucky’s lawyers have taken on a new angle, claiming that the drug manufacturer’s “aggressive and deceptive” marketing techniques violate state law by misleading doctors as to the addictive nature of the drug.⁴ The claims are based on Medicaid fraud and false advertising, among other things.⁵While Kentucky’s suit is unique in that it brings a new perspective to the myriad of litigation against drug manufacturing companies, the assertions are not entirely novel. By introducing these claims as a framework to recover against the drug companies, Kentucky actually moves litigation against drug companies forward in a way that emulates the pattern of litigation against tobacco companies in the 1990s. While claims against tobacco companies started out with unsuccessful products liabilities claims in the 1950s, plaintiffs saw success in the 1990s when states began suing the tobacco companies under state consumer protection and antitrust laws and arguing that the companies had caused significant costs for public health systems.⁶ More than forty states were involved in this litigation, which settled in 1996 and cost the tobacco industry billions of dollars.⁷If the progression of Kentucky’s claim thus far is any indication, plaintiffs seeking relief from drug companies could see similar success under this model. The state won a hard-fought battle to keep the action in Pike County state court over Purdue’s removal and change of venue motion,⁸ and the court has ruled to allow the state to use Purdue’s admissions of liability concerning misbranding of the drug from a 2007 case.⁹Kentucky’s suit could set an important precedent for the future of litigation against drug companies and have far-reaching effects. While this suit alone could cost Purdue Pharma $1 billion, the company is worried about its larger, national impact as well.¹⁰ Kentucky’s action against the drugmaker has already caused national waves - Chicago and two counties in California have already filed suits based on similar claims.¹¹  The case is not only being compared to the lines of cases against tobacco companies in the 1990s and early 2000s for its approach – many commentators have noted that if the Kentucky suit is successful, it could trigger a similar line of cases and recovery to the tobacco litigation as well.¹²

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¹ Kentucky has an age-adjusted drug-poisoning death rate significantly higher than the national average, and the second-highest drug-poisoning rate of all the states, edged out only by West Virginia, according to a study released by the Center for Disease Control’s National Vital Statistics System. See Margaret Warner, et al., Trends in Drug-poisoning Deaths Involving Opiod Analgesics and Heroin: United States, 1999-2012, 4 fig. 2 (December 2014), available at  http://www.cdc.gov/nchs/data/hestat/drug_poisoning/drug_poisoning_deaths_1999-2012.pdf.

² See Laura Unger, Lawsuit seeks to make drugmaker pay for OxyContin abuse, USA Today, (December 29, 2014), available at http://www.usatoday.com/story/news/nation/2014/12/29/kentucky-battles-purdue-pharma-in-court-over-oxycontin-abuse/20803459/.

³ Richard C. Ausness, The Role of Litigation in the Fight Against Prescription Drug Abuse, W. Va. L. Rev. 1117, 1122 (2014).

⁴ Amended Complaint at ¶¶ 2, 10, 42, 81, Kentucky ex rel. Conway v. Purdue Pharma, L.P. (In re OxyContin Antitrust Litig.), 821 F. Supp. 2d 591, 594 (S.D.N.Y. 2011).

⁵ “Plaintiffs assert claims for: (1) violation of the Kentucky Medicaid Fraud Statute, KRS § 205.8463 and § 446.070; (2) violation of KRS § 15.060, which authorizes Kentucky's Attorney General to institute an action to recover fraudulent monies that have been paid out of the state's treasury; (3) violation of the Kentucky False Advertising Statute, KRS § 517.030 and §446.070; (4) public nuisance; (5) unjust enrichment and restitution; (6) indemnity; (7) negligence; (8) violation of state antitrust law; (9) strict liability; (10) common-law fraud; (11) conspiracy and concert of action; and (12) punitive damages. The Commonwealth seeks damages based on the Medicaid-related expenses it has incurred, as well as other equitable and injunctive relief.” Kentucky ex rel. Conway, supra note iv, at 594.

⁶ Tobacco Litigation: History and Recent Developments, NOLO.com, http://www.nolo.com/legal-encyclopedia/tobacco-litigation-history-and-development-32202.html]

⁷ Id.

⁸ Kentucky ex rel. Conway, supra note iv, at 591; See also Jack Brammer, Kentucky’s lawsuit against Purdue Pharma to remain in Pike, Kentucky.com, http://www.kentucky.com/2013/09/30/2852769/kentuckys-lawsuit-against-oxycontin.html.

⁹ United States v. Purdue Frederick Co., 495 F. Supp. 2d 569, 570 (W.D. Va. 2007).

¹⁰ David Armstrong, Drugmaker Warns that OxyContin Suit Could be ‘Crippling’, Bloomberg (October 20, 2014), http://www.bloomberg.com/news/2014-10-20/purdue-says-kentucky-suit-over-oxycontin-could-be-painful.html.

¹¹ Unger, supra note ii.

¹² Armstrong, supra note x.