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The Opioid Crisis - What are the consequences?

03 August 2018 - by James Bird

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What is the opioid crisis?

Opioids are drugs that act on the nervous system to relieve pain. Their use is wide, for example, cancer patients use them for pain relief, as do patients recovering from surgery. However, if opioids are misused or abused it can lead to serious problems such as physical dependence and withdrawal symptoms.

According to a report from the National Institute of Drug Abuse, between 1991 and 2011 painkiller prescriptions tripled from 76 million to 219 million per year. As of 2016 more than 289 million prescriptions were written for opioid drugs per year. The ensuing crisis involved many parties in the supply chain having lawsuits filed against them.

What are the consequences of opioid addiction?

The allegations contained within the lawsuits claim that since the mid 1990’s opioid manufacturers have created a misleading marketing push by underplaying the risks and exaggerating the benefits. Physicians were allegedly encouraged to oversubscribe on the basis that they were safe and effective. Further, opioid distributors allegedly over supplied these pills, even in the knowledge that they ended up with people who misused them. Opioid manufacturers and distributors strongly deny these allegations.

Despite the US being the largest consumer of pharmaceuticals, it is having to come to grips with a situation which might equal the magnitude of the tobacco litigation of the 1990’s which culminated with the largest civil litigation settlement in US history.

Lawsuits and the opioid epidemic:

Lawsuits claim that prescription drugs were responsible for an individual’s addiction, which can be filed by individuals and families of the individuals who have passed away as a result of addiction. As a result, they are looking for compensation for treatment costs, legal expenses, loss of income and pain and suffering caused to the addict and their family.

Many allege that their addiction started with prescription drugs and moved onto illegal substances such as heroin when subscriptions finished. However, the main allegations relate to marketing practices and product diversion. These allegations can best be described as follows:-

1. Market and Prescription Practices

Drug companies, in seeking higher profits, allegedly mislead physicians about the risks of opioid medications. For example, some pharmaceutical companies and their opioid products were promoted as a safer alternative to morphine and were prescribed for conditions beyond severe pain such as backaches, arthritis and sports injuries.

2. Product Diversion

Product diversion is the transfer of a controlled substance from a lawful to an unlawful channel of distribution or use. It is believed that large quantities of opioid products were stolen from manufacturers, distributors, hospitals and medical centres. Internet sales, international smuggling and inappropriate prescriptions by physicians also lead to unlawful use of prescription drugs.

Many opioid lawsuits are also filed by individual states, cities, counties and local governments against pharmaceutical companies, distributors, pharmacies and physicians with the hope of offsetting the huge healthcare costs of handling the crisis.

Trump declares opioid emergency

In August 2017, Donald Trump declared the opioid crisis; a National Public Emergency. He has also called upon the Department of Justice to pursue pharmaceutical companies for compensation. As of May 2018, ConsumerSafety advised that over 600 state, county and city governments had filed lawsuits.

Working toward a solution

The National Institutes of Health (NIH) is trying to assist in solving the crisis by investigating and discovering effective ways to prevent opioid misuse, treat opioid use disorders and manage pain. It is working with pharmaceutical companies and academic research centres to help resolve the crisis. The US Food and Drug Administration (FDA) has also taken several measures along with lawmakers within the United States Congress where 38 bills aimed at combating the opioid crisis have been passed.

What about insurance?

Whilst counsel for insurers continues to determine the existence and scope of insurance coverage for these lawsuits, two main questions arise:

1. Which insurance policies will respond to the varied opioid claims?

Any organisation involved in the manufacture, distribution or prescription of opioids should have all insurance programmes evaluated for coverage of opioid related claims. Opioid related lawsuits can trigger various insurance coverages depending on what is alleged.

2. What impact will these opioid related claims have on policy terms and conditions for policy holders in the future?

It is certain that entities involved in the manufacture or distribution of opioid products will face difficulties finding unrestricted liability cover at a reasonable cost.

The opioid crisis continues and it will take many years to resolve. On the humanitarian front, steps are now being taken to help those afflicted. The opioid crisis has a long way to go and the lawyers on both sides are likely to devote a lot of resources to their respective clients’ positions.

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