States Strike Two Opioid Deals Raising $500 Million for Crisis

An opioid manufacturer and an advertising firm that aggressively marketed the painkillers for a decade struck separate deals with states on Thursday totaling $500 million, injecting fresh cash into the nationwide effort to tackle the fallout from the ongoing addiction epidemic.

Publicis Health LLC agreed to pay a total of $350 million to all 50 US states over its role in helping Purdue Pharma LP recklessly increase sales of OxyContin, even as the crisis grew. Separately, Hikma Pharmaceuticals agreed to pay $150 million to about a dozen states for helping fuel the opioid crisis by failing to monitor and report suspicious opioid orders from potentially illegal distributors.

Both deals, announced Thursday, come as state and local governments continue to struggle with a crisis that’s killed more than 500,000 people, many of whom became hopelessly addicted to opioids after having them prescribed by doctors.

Publicis Health, a unit of French media conglomerate Publicis Groupe SA, helped Purdue carry out a “predatory” marketing strategy to sway the most susceptible doctors to prescribe OxyContin at higher doses and for longer periods of time, according to statements Thursday from several state attorneys general.

“For a decade, Publicis helped opioid manufacturers like Purdue Pharma convince doctors to overprescribe opioids, directly fueling the opioid crisis and causing the devastation of communities nationwide,” New York Attorney General Letitia James, one of the leaders of the negotiations, said in a statement.

Publicis Health, which worked with Purdue from 2010 to 2019, implemented the drugmaker’s “Evolve to Excellence” plan that targeted the doctors who prescribed the most OxyContin and flooded them with sales calls and marketing intended to increase the dosages even more, according to the statement. That, in turn, led to a major rise in opioid prescriptions across the US, followed by greater abuse, addiction and overdose deaths, the New York attorney general said.

No Admission

“This settlement, in which the Attorneys General recognized Publicis Health’s ‘good faith and responsible corporate citizenship,’ is in no way an admission of wrongdoing or liability,” the company said in a statement. “We will, if need be, defend ourselves against any litigation that this agreement does not resolve.”

Under the deal, $343 million will go to all 50 US states plus the District of Columbia and certain US territories to fight the opioid crisis, plus an additional $7 million for states that led the negotiations. Publicis Health said its insurers will pay $130 million of the settlement.

Publicis also agreed not to accept future contracts related to the marketing or sale of opioids. It also agreed to release hundreds of thousands of documents related to its work for Purdue and make public its communications with another Purdue publicist, McKinsey & Co. as well as Practice Fusion, a software firm that designed a health-records systems tool with pop-up banners encouraging doctors to prescribe OxyContin, according to the statement.

Cities, states and municipalities have hammered more than a dozen drugmakers, drug distributors, and retail pharmacies in litigation and forced them to pay $50 billion in settlements over the companies’ misleading marketing and mishandling of opioid pain killers, according to data compiled by Bloomberg News.

Hikma, the latest manufacturer to settle, agreed to deals with at least a dozens states, providing them with $115 million in cash and $35 million worth of opioid addiction treatment medication.

“This settlement is not an admission of wrongdoing or liability and Hikma will continue to defend against any litigation that this settlement does not resolve,” the company said in a statement on its website.

James, the New York AG, said in a separate statement that from 2006 to 2021, Hikma failed to report suspicious orders even while its personnel “knew their systems to monitor suspicious orders were inadequate and prone to failure.”

Read More: Purdue Pharma to Plead Guilty, Pay $8.3 Billion Over Opioids

Purdue’s $6 billion opioid settlement is currently under review by the US Supreme Court, as the justices weighed Biden administration contentions that the accord improperly shields Sackler family members who own the company. Suits accused the company of downplaying the painkillers’ addiction risks and sacrificing patient safety to fatten up its bottom lines, making the family rich.

Household names like Johnson & Johnson, Walmart Inc. and CVS Health Corp., have reached settlements where they have collectively agreed to pay billions over the next two decades to bolster police and drug-treatment budgets drained by the opioid crisis. Others include distributors such as AmerisourceBergen and Cardinal Health, along with McKinsey & Co.

(Updates with Hikma settlement.)

--With assistance from Jef Feeley.

To contact the reporter on this story:
Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story:
Misyrlena Egkolfopoulou at megkolfopoul@bloomberg.net

Anthony Aarons

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