The Opioid Epidemic

June 12, 2018

Summary Written by by Senayda Salazar

The opioid epidemic is a crisis which encompasses the misuse of prescription and non prescription opioids in the United States. Opioids are a class of drugs that bind opioids receptors in the brain which blocks pain, slows breathing, has a calming effect, and an anti depressing effect. Statistics have shown Americans consume ten times the opioids of other countries. Hence, it has resulted in numerous legislative actions against pharmaceutical companies, manufactures and distributors driving class actions suits and multidistrict litigation resulting in excessive insurance costs. There are three classes of opioids: natural (morphine and codeine), semi-synthetic (hydrocodone, oxycodone, and heroin), and synthetic (methadone and fentanyl). In the 1990s, doctors were afraid to prescribe opioids. However, it was believed that pain was under treated and experts called for better pain assessment. In 2000, the Joint Commission on the Accreditation of Healthcare Organization announced pain standards for healthcare organizations. As a consequence, pain was considered “the fifth vital sign” and significantly increased the prescription of opioids resulting in an epidemic in the United States.  

Accordingly, approximately half of the United States opioid market is treatment for non-acute/non-cancer pain.  From 2000 to 2016, approximately 600,000 people in the United States have died from a drug overdose which is estimated that 66% involved an opioid.  Further, nearly 80% of Americans using heroin reported using prescription opioids first.  Heroin use has shifted from predominately minority men living in the cities and increased among most demographic groups.   

As a result, there have been several legislative actions in 2018: (1) Attorney General Jeff Sessions announced that the DEA would conduct an operation to focus on pharmacies and prescribers who are dispensing unusual/disproportionate amount of opioids; (2) DOJ established the Prescription Interdiction and Litigation Task Force examining state and local government lawsuits involving opioid manufacturers; and (3) DOJ filed a “friend of the court” brief in the Multi-District Litigation seeking to provide the federal government’s expertise and legal counsel to the court.  

State and local governments are suing “Big Pharma” for costs associated with the opioid crisis. State Attorneys General in 41 states are investigating the role of pharmaceutical companies seeking the information how the companies market and sell prescription opioids.

Actions are against manufacturers, distributors, and pharmacies.  Additionally, there has been an increase in class action suits which include individuals and corporate entities that purchased health insurance, including individuals who paid for part of an employer-sponsored insurance plan resulting in increased healthcare costs covered by private insurers - $14B increase in nationwide private health insurance costs in 2013.  The numbers have increased throughout the years and resulted in multidistrict litigation to reach universal settlements. 

Due to these suits, the insurance policies that have been affected include: CGL which might come within the scope of coverage due to “occurrence” and “bodily injury” allegations. However, policies might not afford coverage because of the products exclusion.  D&O generally cover defendants facing shareholder actions, derivative suits, and government inquiries and investigations. Doctors and pharmacists may be sued for opioid overdoses.  Intentional versus negligent conduct is paramount for insurance coverage. Doctors and worker comp advocates argue that injured workers gave up their right to sue employers with the expectation they would receive comprehensive medical care.  

In conclusion, there is an opioid epidemic in the United States which has been statistically proven. It has resulted in numerous legislative actions against pharmaceutical companies, manufactures and distributors driving legislative, class actions suits and multidistrict litigation resulting in insurance costs.