14 November 2021 |

J&J Saved from Paying $465M for Opioid Crisis

By workweek


J&J Saved from Paying $465M for Opioid Crisis

Oklahoma’s Supreme Court tossed out Johnson & Johnson’s $465 million opioid lawsuit. This ruling is a blow to the Oklahoma communities deeply impacted by the opioid crisis, but a win for the opioid drug maker facing thousands of opioid-related lawsuits. 

The Deets
In 2019, an Oklahoma District judge ruled that J&J must pay $465 million for its role as a “public nuisance” in the opioid crisis. In this lawsuit, J&J was argued to be a public nuisance through its aggressive marketing of prescription pain pills, which led to devastating addiction and overdoses in Oklahoma communities.

Now, Oklahoma’s highest court reversed the 2019 ruling in a 5-1 vote: 

“Oklahoma’s public nuisance law does not extend to the manufacturing, marketing and selling of prescription opioids,” the judges wrote. Note, however, that Oklahoma’s public nuisance law was written in 1910 when manufacturing, marketing and selling of prescription opioids wasn’t really a thing. 

Don’t Be So Shocked
A California judge recently ruled that J&J and three other opioid makers cannot be held accountable for the opioid crisis. Like in Oklahoma’s ruling, the marketing and promotion of the companies’ pain medications “did not cause any public nuisance.” 

Big Picture
Total overdose deaths reached a record high of nearly 97,000 from March 2020 to March 2021. That’s roughly one-fifth of all opioid-related deaths from 1999 to 2019. The opioid crisis started when pharmaceutical companies began falsely reassuring the medical community that their opioids weren’t addictive, leading to doctors prescribing them at greater rates. Opioid drugmakers, like J&J, are finding as many ways possible to evade these lawsuits.


J&J Will Split Company into Two

Johnson & Johnson is separating its consumer health products from its pharmaceutical and device operations. The company’s consumer health business will be its own publicly-traded company. Its new name is TBD, but I think it should be “Johnson.”

The J&J Saga
The breakup comes when J&J balances thousands of lawsuits over its baby powder causing cancer and its role in the opioid crisis (see the above article). While Pfizer is making billions off of its Covid-19 vaccine — and thriving — J&J is still trying to gain traction with its vaccine following issues with production and clotting side effects. 

But Why Split? 
The split allows J&J to have a strong — but separate — focus on its core products and operations, giving the company “even more agility” and “a better opportunity for capital allocation.” J&J will now be better suited to continue serving healthcare stakeholders, including patients, while accelerating profitable growth. The consumer health business is expected to generate $15 billion in FY 2021, while the pharmaceutical and Medical Devices segments are expected to generate $77 billion. 

General Electric announced it would split up into three companies: aviation, healthcare and energy. The company’s reason for doing so is akin to J&J’s: “greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value.” Will we see more companies following suit? 


Private Insurance Premiums Bumped Up 4% 

Kaiser Family Foundation released their 23rd Employer Health Benefits Survey, revealing just how the pandemic has shaped employer-sponsored health insurance. This is my second-most favorite survey, right behind the census. 

Survey Deets
KFF surveyed over 1,600 private firms and non-federal government employers with three or more employees. Here are the key findings: 

  • PPOs enrolled 46% of covered workers in 2021, the most common type of coverage.
  • The average single and family premiums increased 4% over the past year, right in line with workers’ wages and inflation increases. Four percent may seem small, but the average premium for family coverage has increased 47% over the last 10 years.
  • Employees contributed 17% of the premium for single coverage and 28% for family coverage. Those at smaller firms contributed more to their family coverage premiums than those at larger firms (37% vs. 24%). 
  • Nearly 40% of employers with at least 50 workers changed (and improved) their mental health and substance abuse benefits since the pandemic. 

Zoom Out
The pandemic shook the job market, leading to the loss of jobs and — because this is America — the loss of private insurance. The fact that insurance premiums are holding steady is a good sign.