Big Pharma class action alleges opioid epidemic caused insurance premiums to rise

By Elizabeth Alt | May 13, 2018

SAN FRANCISCO – A class action lawsuit has been filed alleging pharmaceutical companies are directly responsible for the opioid epidemic that has in turn caused health insurance payments to increase. 

Jordan Chu filed the lawsuit on behalf of himself and a class of others on May 2, requesting a trial by jury for violations of California’s Unfair Competition Law and Business and Professions Code, violations of the Racketeering Influenced and Corrupt Organizations Act, conspiracy to violate the Racketeering Influenced and Corrupt Organizations Act, public nuisance, unjust enrichment, negligence, and civil conspiracy.

The lawsuit claims: “All of the defendants in this action share responsibility for creating, sustaining, and prolonging the opioid epidemic.” The defendants listed are pharmaceutical companies, including Purdue Pharma, Teva Ltd., Janssen Pharmaceuticals, which is owned by Johnson & Johnson; and Endo Pharmaceuticals.

Chu filed the lawsuit in U.S. District Court for the Northern California District, claiming the companies that produce, market and sell opioids have caused insurance premiums to increase for “Every California purchaser of private health insurance." Chu states that his monthly premium has gone up almost $100 from 2017 to 2018. The lawsuit claims that premiums have been on the rise for several years as insurance providers began factoring in the costs of future opioid-related care, such as ER visits, addiction treatment, and babies born addicted to opioids, and passing the cost down to their insureds.

Chu states the companies'’ “well-funded campaign of deception” directly caused the opioid epidemic that has led to a devastating number of deaths because the companies misrepresented the many risks and dangerous addictive nature of the pain medicine when marketing and selling the opioids to doctors to treat their patients, which “generated far more opioid prescriptions than there should have been." 

Chu says the flood of opioid prescriptions paved the way for people to sell their prescription opioids, raising the price of prescriptions, creating an illegal market that eventually forced people who genuinely needed the medicine to the streets to purchase opioids and even heroin. The class states this has created a national epidemic of opioid abuse and death and that the defendants have made huge profits. The lawsuit notes that Purdue Pharma, for example, has made almost $3 billion from the sales of the pain medication OxyContin since 2009.

Chu claims that the defendants knew or should have known that their alleged deception would result in millions of people becoming addicted to opioids, “imposing tremendous medical and other costs that would be borne by all purchasers of health insurance.”

The suit seeks restitution, an order enjoining defendants from future violations, equitable relief, actual damages, treble damages, attorneys’ fees and other fees.

U.S. District Court for the Northern District of California, case number 3:18-cv-02576-JCS

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