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Thursday, August 29, 2019

How Cuyahoga and Summit Counties Have Estimated the Financial Damage Caused by Big Pharma

Posted By on Thu, Aug 29, 2019 at 11:06 AM

click to enlarge AJAY SURESH/FLICKR CREATIVE COMMONS
  • Ajay Suresh/Flickr Creative Commons

As the seven-week “bellwether” trial in mid-October at the Carl B. Stokes U.S. Courthouse in Cleveland looms that will help delineate the future and outcome of the more than 2,000 lawsuits filed by states and cities against opioid manufacturers and distributors, there has been movement that points to how this all might play out.

The last two weeks have seen major developments on the opioid lawsuit front — locally, with regard to the multidistrict litigation that's collected those 2,000 lawsuits before federal judge Dan Polster, and in Oklahoma.

In that state, a judge ruled earlier this week that Johnson and Johnson will have to pay $572 million for its role in the opioid crisis there. That number was far less than Oklahoma had sought — $17 billion — to deal with the aftermath of the crisis over the new two decades.



Endo and Allergan, meanwhile, have reached preliminary settlements with Cuyahoga and Summit Counties, the two plaintiffs in the bellwether trial, totaling $15 million.

And then there were reports this week that Purdue Pharma has offered to settle all of its outstanding lawsuits across the nation, including those included in the MDL, for $10 to $12 billion, $3 billion of which would come directly from the Sackler family, which would also give up ownership of Purdue as part of the settlement.

With the more than 2,000 cities and counties and states as plaintiffs in the MDL, and more than 20 pharmaceutical, distribution and retail companies as defendants, so far, about 500 depositions have been taken, more than 50 million pages of documents filed, and about 20 national addiction and health care “experts” set to testify if called. The motions filed are now more than 2,500.

“Up until our filings [a few weeks ago], people were unaware of 76 billion opioid pills being dumped on our country, and the public has been largely unaware of their internal documents that illustrate the strategies and techniques and motives of these companies,” said Cleveland attorney Frank Gallucci, who is working for Cuyahoga and Summit counties in the trial.

“But with this bellwether trial, people across the country and in our community —and the 12-member jury itself — will not only learn about the behavior and the damages that resulted from such behavior,” Gallucci continued, “but also the costs to the communities that experienced it and the needs that have to be rectified fairly.”

So how are plaintiffs mapping out what they think they’re owed by Big Pharma? Part of the equation is exactly why Summit and Cuyahoga jurisdictional examples for the test case.

While a lot of the initial public and media focus has been on places like Kentucky or West Virginia, longtime Cleveland lawyer Peter Weinberger, co-liaison for the plaintiffs’ side, says Summit and Cuyahoga counties aren’t outliers, and in fact are some of the best examples of what most of the country was dealing with.

For example, Logan and Mingo counties in West Virginia had 45.5 and 38.2 million pills prescribed, respectively, from 2006 to 2012. That’s roughly 179 and 203 pills per person each year. But the population of those counties are 25,000 and 35,000.

Cuyahoga and Summit had 267 and 168 million pills prescribed in those years, giving them a mid-range average of 29 and 44 pills per person each year. They also have a largely urban population of 1.2 million and 540,000 respectively.
“The reason these counties work is they have all the elements of the problems the cities and counties and states are alleging,” Weinberger said. He pointed out those problems are increased costs in law enforcement, social services spending, increased health care costs, and foster care for children – all of which can be linked in some ways to the opioid epidemic.

“[These counties] are good examples in that they were severely and significantly impacted by the excessive quantities of pills that were shipped into these counties by the defendants,” he said.

Which, of course, being a civil trial, brings us to the dollar amount math, if the defendants are found responsible.

First, if you take the settlement amount paid by Endo and Allergan last week, and then multiply that by the number of defendants and plaintiffs involved in the MDL, you can easily arrive at a number like $300 billion. Factor in that some players are bigger than others – like pill manufacturers Purdue Pharma and Ohio-based distributor Cardinal Health – and it is not out of the realm of possibility that the final settlement pot might have a trillion dollars in it.

The second part of the numbers game in this trial is proving the economic damage done by the companies. Two Harvard University academics — Thomas McGuire, professor of health economics, and David Cutler, professor of applied economics – have taken a shot at estimating what economic damages have hit the two Ohio counties from the opiate overdose epidemic in the past 15 years or so. Their reports are extensive and detailed. The estimates are big, but at times, seem a bit overblown. Nevertheless, they’re fascinating.

In direct money damages – meaning anything drug-related with a hint of opioids, heroin or fentanyl attached – Cuyahoga County has spent about $463 million from 2006-2018 in public spending on drug treatment programs, children’s services, jail and court costs, they say. That’s 31.5% of the total spending in those areas.

In Summit County, it is estimated that $145 million was spent in its social service programs with the pain med attachment, and that was 28.7% of their total spending.

But the two reports also made an attempt to estimate what the costs are when factoring in “misconduct” by the Big Pharma companies. That’s an attempt to quantify the effect of the alleged marketing and distribution of pills that disregarded addictive properties and the costs associated with those marketing choices.

Those factors bring the numbers down.

In Summit County, they drop to between $69 and $78 million, while in Cuyahoga County, it goes down to between $125 and $145 million.

According to the reports, the Alcohol, Drug Addiction and Mental Health Services (ADAMHS) of Cuyahoga County spent $300,000 more in 2006 based on the alleged “misconduct” of the opioid businesses, which increased to $2.1 million more in 2018, for a total of $12.7 million in misconduct funds over that time period. Cuyahoga County’s Children and Family Services saw their expenses go up from $1.2 million in 2006 to $8.6 million in 2018, with a total of $50.6 million

Summit County had similar numbers with the biggest increase in their child services related to opioid addiction service going up from $400,000 in 2006 to $5.5 million in 2018, for a total of $37.8 million over that 13-year period.

There will be no doubt that the overdose numbers will come into play in this bellwether case. Both counties has seen the number of opioid overdose deaths decline slightly in the past few years (in 2018 Cuyahoga County had 440 opioid-related deaths, and 556 in 2017), and there is no doubt that the defendants will play up the factor that the opioids are not the sole reason for the Northeast Ohio public spending economic problems.

“[The] estimate of juvenile removal attributable to opioids is unreliable because it is based on a single 2015 study … it does not suggest that the drug caused the removal, let alone that is was the sole cause,” the defendants’ attorneys filed in their response to the Cutler study.

The defendants filed a motion to exclude Cutler’s testimony. But Polster denied their motion this week, writing that “Cutler’s report is a model of transparency, explaining every choice he made in designing his analysis … [His] opinions, though clearly not perfect, are a product of reliable methodology and their assumptions and estimates rest upon rational bases.”

At the end of the day, however, the jury will likely be paying attention to personal stories much more than spending graphs. The jury will no doubt relate to those stories, given that they know friends, neighbors and family members who have overdosed or dealt with addiction.

In depositions done so far, one can see that that message will be pounded out repeatedly.

“[When we were] able to look at the people who were dying, looked at the histories of prescriptions, we started to find out that about 75% of them had been prescribed opioids prior to their deaths,” said Hugh Shannon, director of operations at Cuyahoga County Medical Examiner in his deposition in January.
“The county is the last safety net for a lot of people, and so taking out 3,000 [in overdose deaths] … they are people who are working every day, they are people contributing to our tax base, they are taking care of their parents, they’re taking care of their families. It has a ripple effect. It has a direct effect on harm to the county.”

Akron Police Chief Kenneth Ball expressed a similar feeling during his deposition last year. He remembered when the City of Akron had 33 people die from drug overdoses in July of 2016. In one instance, he found a young woman still alive — but in drug-induced unconsciousness — underneath two dead males. She was taken to a hospital and survived.

“I’ve seen and heard many, many people who talked about their circumstances or the circumstances of a loved one and what that path looked like for them … and what I would have perceived initially being the result of personal choice and a lack of value or lack of discipline,” Ball said in his deposition last November. “[But I know] people now who have talked about their individual circumstances where [they] were not involved in other addictive behaviors, that they were not a drug user in a criminal way prior to overdose … and a significant percentage of those had started with legal prescriptions.”

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