U.S. Officials Are Starting to Treat Opioid Companies Like Big Tobacco — and Suing Them

June 7, 2017

Michael P. Canty and Serena P. Hallowell discuss states’ responses to the opioid crisis

In cases against manufacturers and distributors on behalf of states, counties, and municipalities combatting the opioid crisis, there’s a separate legal argument, dubbed the “diversion theory” by some of its proponents. This argument has so far been leveled against companies that distribute opioids, particularly in a recent lawsuit by the Cherokee Nation against big names like the McKesson Corporation, Cardinal Health, AmerisourceBergen, CVS, Walgreens, and Walmart.

Under federal and some state laws, opioid distributors have a legal obligation to stop controlled substances from going to illicit purposes and misuse. The diversion theory argues that these distributors clearly did not do that: As the opioid epidemic spiraled out of control, and as some counties and states had more prescriptions than people, it should have become perfectly clear that something was going wrong—yet, the claim goes, distributors continued to let the drugs proliferate.

Firm partner Michael Canty drew a comparison between opioid distributors and credit card companies. “[Credit card companies say], ‘Someone tried to make a very large purchase on your account in another state, and we flagged it as suspicious and stopped it from going through.’ That’s what distributors should be doing. For example, there’s a small town with 500 residents, and the local pharmacies order a million pills from the distributors. That should set off an alarm bell from a compliance standpoint or a quality control standpoint, where the distributors say, ‘Wait a minute, what’s going on here? We need to investigate this order. And until it passes muster, we won’t ship.’”

The Cherokee Nation has some alarming numbers behind its claim, suggesting there were hundreds of pills on average for each opioid user in the Cherokee Nation. However, this is a national problem. For example, the CDC’s 2012 data found there were more painkiller prescriptions than people in several states.

“When you have 140 prescriptions being written for every 100 people, you know that people have failed to meet their obligations,” said Firm partner Serena Hallowell. “And they’re not just ethical obligations, which I would say they have too. They’re obligations under state and federal law and their own industry guidelines as well.”

“Both Democrat and Republican attorneys general have expressed an interest in this,” Canty said. “They are serious about the epidemic. They are educated on the epidemic. They understand the magnitude of the problem and want to be proactive in addressing it.”