Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 1 of 110 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 PORT GAMBLE S’KLALLAM TRIBE, SUQUAMISH TRIBE, and JAMESTOWN S’KLALLAM TRIBE, Plaintiffs, Case No.: COMPLAINT JURY TRIAL DEMANDED vs. PURDUE PHARMA L.P., PURDUE PHARMA INC., THE PURDUE FREDERICK COMPANY, CEPHALON, INC., TEVA PHARMACEUTICAL INDUSTRIES, LTD., TEVA PHARMACEUTICALS USA, INC., JANSSEN PHARMACEUTICALS, INC., JOHNSON & JOHNSON, ORTHOMCNEIL-JANSSEN PHARMACEUTICALS, INC., JANSSEN PHARMACEUTICA, INC., ENDO HEALTH SOLUTIONS INC., ENDO PHARMACEUTICALS INC., ALLERGAN PLC, ACTAVIS PLC, WATSON PHARMACEUTICALS, INC., WATSON LABORATORIES, INC., ACTAVIS PHARMA, INC., WATSON PHARMA, INC., ACTAVIS LLC, MALLINCKRODT PLC; MALLINCKRODT LLC; MCKESSON CORP., CARDINAL HEALTH, INC., AMERISOURCEBERGEN CORP., and JOHN & JANE DOES 1-100 INCLUSIVE, Defendants. HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 2 of 110 1 TABLE OF CONTENTS INTRODUCTION .................................................................................................................. 1 2 I. 3 II. THE PARTIES ..................................................................................................................................4 4 A. The Plaintiffs ..................................................................................................................................4 5 B. Pharmaceutical Defendants ..........................................................................................................6 6 7 C. Distributor Defendants................................................................................................................11 8 D. John and Jane Does 1-100, inclusive ........................................................................................13 9 III. JURISDICTION AND VENUE ....................................................................................................13 10 IV. ADDITIONAL FACTUAL ALLEGATIONS ............................................................................14 11 A. Overview of the Opioid Epidemic ............................................................................................14 12 13 14 B. The Pharmaceutical Defendants spread false or misleading information about the safety of opioids. ..................................................................................................................20 1. The Pharmaceutical Defendants engaged in false and misleading direct marketing of opioids. ..............................................................................................................24 2. The Pharmaceutical Defendants used “detailing” and speaker programs to spread false and misleading information about opioids. ....................................................25 3. The Pharmaceutical Defendants deceptively marketed opioids through unbranded advertising disseminated by seemingly independent third parties but which was really created by the Pharmaceutical Defendants. ....................................28 15 16 17 18 19 20 21 22 23 24 25 26 C. The Pharmaceutical Defendants’ statements about the safety of opioids were patently false. ..............................................................................................................................38 D. The Pharmaceutical Defendants misrepresented the benefits of chronic opioid therapy. ............................................................................................................................53 E. All Defendants created an illicit market for opioids. ..............................................................62 1. The Distributor Defendants negligently failed to control the flow of opioids to the Tribes through illicit channels. .......................................................................................65 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - i 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 3 of 110 2. 1 2 3 F. The Pharmaceutical Defendants negligently failed to control the flow of opioids to the Tribes through illicit channels.....................................................................................73 Defendants’ unlawful conduct and breaches of legal duties caused the harm alleged herein and substantial damages. ..................................................................................77 4 5 6 G. The statutes of limitations are tolled and Defendants are estopped from asserting statutes of limitations as defenses. ............................................................................................80 H. The impact of opioid abuse on the Tribes.................................................................................82 7 V. CAUSES OF ACTION ...................................................................................................................89 8 9 10 COUNT 1: PUBLIC NUISANCE and NUISANCE PER SE, RCW 7.48.010 et seq. ...............89 COUNT 2: VIOLATIONS OF THE WASHINGTON CONSUMER PROTECTION ACT, RCW 19.86 et seq. ...........................................................................................................92 11 12 13 COUNT 3: RACKETEER-INFLUENCED AND CORRUPT ORGANIZATIONS ACT, 18 U.S.C. § 1961 et seq. .................................................................................................94 COUNT 4: LANHAM ACT, 15 U.S.C. § 1125(a)(1)(B) ..............................................................99 14 15 16 COUNT 5: FRAUD ..........................................................................................................................100 COUNT 6: NEGLIGENCE .............................................................................................................101 17 COUNT 7: GROSS NEGLIGENCE ..............................................................................................102 18 COUNT 8: NEGLIGENCE PER SE ..............................................................................................103 19 COUNT 9: UNJUST ENRICHMENT ...........................................................................................104 20 COUNT 10: CIVIL CONSPIRACY .......................................................................................105 21 22 PRAYER FOR RELIEF .......................................................................................................................106 23 24 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - ii 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 4 of 110 I. 1 2 3 4 INTRODUCTION 1. An epidemic of prescription opioid abuse is devastating the United States. Native Americans, Indian Tribes, and communities in Indian Country have been particularly hard hit, causing Plaintiffs Port Gamble S’Klallam Tribe, Suquamish Tribe, and Jamestown S’Klallam 5 6 7 Tribe (collectively, the “Tribes”) to suffer substantial loss of resources, economic damages, and damages to the health and welfare of the Tribes’ members. 8 9 2. The Tribes bring this action in their own proprietary capacity and under their parens patriae authority in the public interest to protect the health, safety, and welfare of all 10 members of the Tribes. 11 3. 12 Opioid analgesics are widely diverted and improperly used, and the 13 widespread abuse of opioids has resulted in a national epidemic of opioid overdose deaths and 14 addictions.1 The opioid epidemic is “directly related to the increasingly widespread misuse of 15 powerful opioid pain medications.”2 16 4. Since the mid-1990s, opioids have become the most prescribed class of drugs 17 18 in America. Between 1991 and 2011, opioid prescriptions in the U.S. nearly tripled from 76 19 million to 219 million per year.3 In 2016, health care providers wrote more than 289 million 20 prescriptions for opioid pain medication, more than enough for every adult in the United States 21 to have a bottle of pills.4 In terms of annual sales, the increase has been ten-fold; before the FDA 22 23 24 25 26 1 See Nora D. Volkow & A. Thomas McLellan, Opioid Abuse in Chronic Pain - Misconceptions and Mitigation Strategies, 374 N. ENG. J. MED. 1253 (2016). 2 See Robert M. Califf et al., A Proactive Response to Prescription Opioid Abuse, 374 N. ENG. J. MED. 1480 (2016). 3 Nora D. Volkow, America’s Addiction to Opioids: Heroin and Prescription Drug Abuse, Appearing before the U.S. Senate Caucus on International Narcotics Control, NIH National Institute on Drug Abuse (May 14, 2014), https://www.drugabuse.gov/about-nida/legislative-activities/testimony-to-congress/2016/americas-addiction-toopioids-heroin-prescription-drug-abuse. 4 Prevalence of Opioid Misuse, BupPractice, https://www.buppractice.com/node/15576 (last visited Feb. 27, 2018). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 1 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 5 of 110 1 approved OxyContin in 1995, annual opioid sales hovered around $1 billion. By 2015, they 2 increased to almost $10 billion. By 2020, revenues are projected to grow to $18 billion.5 3 5. The cause of this epidemic and the conditions for its acceleration were 4 intentionally brought about by Defendants, who made billions of dollars off the epidemic. 5 6 Opioids are now the leading cause of accidental death in the U.S., surpassing deaths caused by 7 car accidents. Opioid overdose deaths (which include prescription opioids as well as heroin) have 8 risen steadily every year, from approximately 4,030 in 1999, to 15,597 in 2009, and to over 33,000 9 in 2015. In 2016, that toll climbed to 53,000.6 The recent surge in opioid-related deaths involves 10 prescription opioids, heroin, and other synthetic opioids. More than half of all opioid overdose 11 12 deaths involve a prescription opioid like those manufactured by Defendants,7 and the increase in 13 overdoses from non-prescription opioids is directly attributable to Defendants’ success in 14 expanding the market for opioids of any kind. 15 16 6. The epidemic has hit the Tribes very hard. In 2010, the Portland Area office of the Indian Health Service (which encompasses the Tribes’ medical services) recorded fewer 17 18 than 200 patients making fewer than 500 patient-encounters for opioid-related issues; in 2016, 19 those numbers skyrocketed to 2,000 patients and over 19,000 patient-encounters.8 As a further 20 example, Clallam County, Washington—home of Plaintiff Jamestown S’Klallam Tribe—had the 21 5 22 23 24 25 26 Report: Opioid pain sales to hit $18.4B in the U.S. by 2020, CenterWatch (July 17, 2017), https://www.centerwatch.com/news-online/2017/07/17/report-opioid-pain-sales-hit-18-4b-u-s-2020/#more-31534. 6 Overdose Death Rates, NIH National Institute on Drug Abuse, https://www.drugabuse.gov/related-topics/trendsstatistics/overdose-death-rates (revised Sept. 2017). 7 Understanding the Epidemic, Centers for Disease Control and Prevention, https://www.cdc.gov/drugoverdose/epidemic/index.html (last updated Aug. 30, 2017). 8 Jessica Leston, DrPH/MPH, Northwest Portland Area Indian Health Board, The Opioid Crisis in Indian Country, Presentation to the Affiliated Tribes of Northwest Indians Winter Convention 2018, http://www.atnitribes.org/sites/default/files/OpioidCrisis.ATNI_.W18.pdf (last updated Feb. 1, 2018). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 2 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 6 of 110 1 highest rate of opioid-related deaths of any county in Washington between 2012 and 2016, at 16.5 2 people per 100,000.9 That County also averages more than one opioid prescription per resident, 3 with 1,164 prescriptions per 1,000 Clallam County residents.10 4 7. The effects of the opioid crisis have been exacerbated by Defendants’ efforts to 5 6 conceal or minimize the risks of—and to circumvent or ignore safeguards against—opioid abuse. 8. 7 8 9 The Tribes have seen child welfare and foster care costs associated with opioid- addicted parents skyrocket; their health services have been overwhelmed; education and addiction therapy costs have substantially increased; and almost every tribal member has been affected. 10 9. These costs could have been—and should have been—prevented by the opioid 11 12 industry. The prescription drug industry is required by statute and regulation to secure and monitor 13 opioids at every step of the stream of commerce, thereby protecting opioids from theft, misuse, 14 and diversion. The industry is also supposed to implement processes to alert it to “red flags” that 15 stop suspicious or unusual orders by pharmacies, doctors, clinics, or patients. 16 10. Instead of acting with reasonable care and in compliance with their legal duties, 17 18 19 the Defendants intentionally flooded the market with opioids and pocketed billions of dollars in the process. 20 21 11. Defendants also flooded the market with false statements designed to persuade both doctors and patients that prescription opioids posed a low risk of addiction. Those claims 22 23 24 25 9 Opioid-related Deaths in Washington State, 2006-2016, Washington State Department of Health (May 2017), available at https://www.doh.wa.gov/Portals/1/Documents/Pubs/346-083-SummaryOpioidOverdoseData.pdf. 10 See Population and Total Controlled Substances Prescriptions, Clallam County, CY 2014, Washington State Department of Health 630-126 (May 2017), available at https://www.doh.wa.gov/Portals/1/Documents/2600/PMPcountyProfiles/630-126-ClallamCountyProfile2014.pdf. 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 3 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 7 of 110 1 were false.11 2 3 Defendants’ actions directly and foreseeably caused damages to the Tribes, 12. including the costs of (a) medical and therapeutic care, prescription drug purchases, and other 4 treatment costs for patients suffering from opioid addiction or disease, overdose, or death; (b) 5 6 counseling, treatment and rehabilitation services; (c) treatment of infants born with opioid-related 7 medical conditions; (d) welfare and foster care for children whose parents suffer from opioid- 8 related disability or incapacitation; and (e) law enforcement and public safety relating to the opioid 9 epidemic within the tribal communities. The Tribes have also suffered substantial damages due to 10 the lost productivity of tribal members, increased administrative costs, and the lost opportunity for 11 12 13 growth and self-determination. These damages have been suffered and continue to be suffered directly, by the Tribes. 14 15 The Tribes also seek the means to abate the epidemic created by Defendants’ 13. wrongful and/or unlawful conduct. 16 II. THE PARTIES 17 A. 18 The Plaintiffs 14. 19 The Port Gamble S’Klallam Tribe is a federally recognized sovereign Indian 20 nation, with its principal business address in Kingston, Washington. The Port Gamble S’Klallam 21 Tribe exercises inherent governmental authority on behalf of the Tribe itself and its members. 22 The Port Gamble S’Klallam Tribe is located on its reservation and other tribal lands in Kitsap 23 24 25 26 County, Washington. 11 See Letter from Vivek H. Murthy, U.S. Surgeon General, August 2016, available at http://turnthetiderx.org/ (last accessed Feb. 27, 2018). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 4 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 8 of 110 15. 1 2 3 The Suquamish Tribe is a federally recognized sovereign Indian nation, with its principal business address in Suquamish, Washington. The Suquamish Tribe exercises inherent governmental authority on behalf of the Tribe itself and its members. The Suquamish 4 Tribe is located on its reservation and other tribal lands in Kitsap County, Washington. 5 16. 6 The Jamestown S’Klallam Tribe is a federally recognized sovereign Indian 7 nation, with its principal business address in Sequim, Washington. The Jamestown S’Klallam 8 Tribe exercises inherent governmental authority on behalf of the Tribe itself and its members. 9 The Jamestown S’Klallam Tribe is located on its reservation and other tribal lands in Clallam and 10 Jefferson Counties, Washington. 11 17. 12 The Tribes have inherent sovereignty over unlawful conduct that takes place 13 on, or has a direct impact on, land that constitutes Indian Country within the Tribes. Federal law 14 recognizes the Tribes’ authority over its members and its territory, specifically the authority to 15 promote the autonomy and the health and welfare of the Tribes. Defendants engaged in activities 16 and conduct that takes place on or has a direct impact on land that constitutes Indian Country 17 18 within the Tribes. The distribution and diversion of opioids into Washington and onto the Tribes’ 19 lands and surrounding areas, created the foreseeable opioid crisis and opioid public nuisance for 20 which the Tribes here seek relief. 21 22 18. The Tribes have standing to recover damages incurred as a result of Defendants’ actions and omissions. The Tribes have standing to bring actions including, inter alia, 23 24 25 standing to bring claims under the federal RICO statutes, pursuant to 18 U.S.C. §§ 1961(3) and 1964. 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 5 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 9 of 110 19. 1 2 Members of the Tribes affected by the opioid crisis described in this complaint live on the Tribes’ reservations, as well as throughout Washington. 3 B. Pharmaceutical Defendants 4 20. The Pharmaceutical Defendants are defined below. At all relevant times, the 5 6 Pharmaceutical Defendants have packaged, distributed, supplied, sold, placed into the stream of 7 commerce, labeled, described, marketed, advertised, promoted, and purported to warn or 8 purported to inform prescribers and users regarding the benefits and risks associated with the use 9 of prescription opioid drugs. The Pharmaceutical Defendants, at all times, have manufactured 10 and sold prescription opioids without fulfilling their legal duty to prevent diversion and report 11 12 suspicious orders. 21. 13 PURDUE PHARMA L.P. is a limited partnership organized under the laws of 14 Delaware. PURDUE PHARMA INC. is a New York corporation with its principal place of 15 business in Stamford, Connecticut, and THE PURDUE FREDERICK COMPANY is a Delaware 16 corporation with its principal place of business in Stamford, Connecticut. Purdue Pharma L.P., 17 18 19 Purdue Pharma Inc., and The Purdue Frederick Company are referred to collectively as “Purdue.” 20 21 22. Each Purdue entity acted in concert with one another and acted as agents and/or principals of one another in connection with the conduct described herein. 22 23. Purdue manufactures, promotes, sells, and distributes opioids such as 23 24 25 26 OxyContin, MS Contin, Dilaudid/Dilaudid HP, Butrans, Hysingla ER,,12 and Targiniq ER in the 12 Long-acting or extended release (ER or ER/LA) opioids are designed to be taken once or twice daily. Short-acting opioids, also known as immediate release (IR) opioids, last for approximately 4-6 hours. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 6 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 10 of 110 1 U.S., including Washington. OxyContin is Purdue’s best-selling opioid. Since 2009, Purdue’s 2 annual sales of OxyContin have fluctuated between $2.47 billion and $2.99 billion, up four-fold 3 from its 2006 sales of $800 million. OxyContin constitutes roughly 30% of the entire market for 4 analgesic drugs (painkillers). Purdue has registered with the Washington State Department of 5 6 7 8 9 10 Health as a Pharmacy Manufacturer and Pharmacy Wholesaler. 24. CEPHALON, INC. is a Delaware corporation with its principal place of business in Frazer, Pennsylvania. TEVA PHARMACEUTICAL INDUSTRIES, LTD. (“Teva Ltd.”) is an Israeli corporation with its principal place of business in Petah Tikva, Israel. In 2011, Teva Ltd. acquired Cephalon, Inc. TEVA PHARMACEUTICALS USA, INC. (“Teva USA”) is a wholly 11 12 owned subsidiary of Teva Ltd. and is a Delaware corporation with its principal place of business 13 in Pennsylvania. Teva USA acquired Cephalon, Inc. in October 2011. 14 Industries, Ltd., Teva Pharmaceuticals USA, Inc., and Cephalon, Inc. are referred to collectively 15 as “Cephalon.” 16 25. Teva Pharmaceuticals Cephalon, Inc. manufactures, promotes, sells and distributes opioids such as 17 18 Actiq and Fentora in the U.S., including in Washington. The FDA approved Actiq and Fentora 19 only for the management of breakthrough cancer pain in patients who are tolerant to around-the- 20 clock opioid therapy for their underlying persistent cancer pain. In 2008, Cephalon pleaded guilty 21 to a criminal violation of the Federal Food, Drug and Cosmetic Act for its misleading promotion 22 of Actiq and two other drugs and agreed to pay $425 million. 23 24 26. Teva Ltd., Teva USA, and Cephalon, Inc. work together closely to market and 25 sell Cephalon products in the United States. Teva Ltd. conducts all sales and marketing activities 26 for Cephalon in the United States through Teva USA and has done so since its October 2011 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 7 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 11 of 110 1 acquisition of Cephalon. Teva Ltd. and Teva USA hold out Actiq and Fentora as Teva products 2 to the public. Teva USA sells all former Cephalon-branded products through its “specialty 3 medicines” division. The FDA approved prescribing information and medication guide, which 4 is distributed with Cephalon opioids marketed and sold in Washington, discloses that the guide 5 6 was submitted by Teva USA, and directs physicians to contact Teva USA to report adverse 7 events. Teva Ltd. has directed Cephalon, Inc. to disclose that it is a wholly owned subsidiary of 8 Teva Ltd. on prescription savings cards distributed in Washington, indicating Teva Ltd. would 9 be responsible for covering certain co-pay costs. All of Cephalon’s promotional websites, 10 including those for Actiq and Fentora, prominently display Teva Ltd.’s logo. Teva Ltd.’s 11 12 financial reports list Cephalon’s and Teva’s USA’s sales as its own, and its year-end report for 13 2012 – the year immediately following the Cephalon acquisition – attributed a 22% increase in 14 its specialty medicine sales to “the inclusion of a full year of Cephalon’s specialty sales.” Through 15 interrelated operations like these, Teva Ltd. operates in Washington and the rest of the United 16 States through its subsidiaries Cephalon and Teva USA. The United States is the largest of Teva 17 18 Ltd.’s global markets, representing 53% of its global revenue in 2015, and, were it not for the 19 existence of Teva USA and Cephalon, Inc., Teva Ltd. would conduct those companies’ business 20 in the United States itself. Upon information and belief, Teva Ltd. directs the business practices 21 of Cephalon and Teva USA, and their profits inure to the benefit of Teva Ltd. as controlling 22 shareholder. Cephalon has registered with the Washington State Department of Health as a 23 24 25 26 Pharmacy Wholesaler. 27. JANSSEN PHARMACEUTICALS, INC. is a Pennsylvania corporation with its principal place of business in Titusville, New Jersey, and is a wholly owned subsidiary of 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 8 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 12 of 110 1 JOHNSON & JOHNSON (“J&J”), a New Jersey corporation with its principal place of business 2 in New Brunswick, New Jersey. ORTHO-MCNEIL-JANSSEN PHARMACEUTICALS, INC., 3 now known as Janssen Pharmaceuticals, Inc., is a Pennsylvania corporation with its principal 4 place of business in Titusville, New Jersey. JANSSEN PHARMACEUTICA, INC., now known 5 6 as Janssen Pharmaceuticals, Inc., is a Pennsylvania corporation with its principal place of business 7 in 8 Pharmaceuticals, Inc., Janssen Pharmaceutica, Inc., and J&J are referred to collectively as 9 “Janssen”). Upon information and belief, J&J controls the sale and development of Janssen 10 Titusville, New Jersey. (Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceutical’s products and corresponds with the FDA regarding Janssen’s products. 11 12 28. Janssen manufactures, promotes, sells, and distributes drugs in the U.S., 13 including in Washington, including the opioid Duragesic (fentanyl). Until January 2015, Janssen 14 developed, marketed, and sold the opioids Nucynta and Nucynta ER. Together, Nucynta and 15 Nucynta ER accounted for $172 million in sales in 2014. Janssen has registered with the 16 Washington State Department of Health as a Pharmacy Wholesaler. 17 18 29. ENDO HEALTH SOLUTIONS INC. is a Delaware corporation with its 19 principal place of business in Malvern, Pennsylvania. ENDO PHARMACEUTICALS INC. is a 20 wholly owned subsidiary of Endo Health Solutions Inc. and is a Delaware corporation with its 21 principal place of business in Malvern, Pennsylvania. (Endo Health Solutions Inc. and Endo 22 Pharmaceuticals Inc. are referred to collectively as “Endo”). 23 24 30. Endo develops, markets, and sells prescription drugs, including the opioids 25 Opana/Opana ER, Percodan, Percocet, and Zydone, in the U.S., including in Washington. 26 Opioids made up roughly $403 million of Endo’s overall revenues of $3 billion in 2012. Opana 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 9 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 13 of 110 1 ER yielded $1.15 billion in revenue from 2010 and 2013, and it accounted for 10% of Endo’s 2 total revenue in 2012. Endo also manufactures and sells generic opioids such as oxycodone, 3 oxymorphone, hydromorphone, and hydrocodone products in the U.S., including in Washington, 4 by itself and through its subsidiary, Qualitest Pharmaceuticals, Inc. Endo and/or its subsidiaries 5 6 7 8 9 have registered with the Washington State Department of Health as a Pharmacy Wholesaler. 31. ALLERGAN PLC is a public limited company incorporated in Ireland with its principal place of business in Dublin, Ireland. ACTAVIS PLC acquired Allergan plc in March 2015. Before that, WATSON PHARMACEUTICALS, INC. acquired Actavis, Inc. in October 10 2012. The combined company changed its name to Actavis, Inc. as of January 2013, and then to 11 12 Actavis plc in October 2013. WATSON LABORATORIES, INC. is a Nevada corporation with 13 its principal place of business in Corona, California, and is a wholly owned subsidiary of 14 Allergan plc (f/k/a Actavis, Inc., f/k/a Watson Pharmaceuticals, Inc.). ACTAVIS PHARMA, 15 INC. (f/k/a Actavis, Inc.) is a Delaware corporation with its principal place of business in New 16 Jersey, and was formerly known as WATSON PHARMA, INC. ACTAVIS LLC is a Delaware 17 18 limited liability company with its principal place of business in Parsippany, New Jersey. Each 19 of these defendants is owned by Allergan plc, which uses them to market and sell its drugs in the 20 United States, including in Washington. Upon information and belief, Allergan plc exercises 21 control over these marketing and sales efforts, and profits from the sale of Allergan/Actavis 22 products ultimately inure to its benefit. Allergan plc, Actavis plc, Actavis, Inc., Actavis LLC, 23 24 25 26 Actavis Pharma, Inc., Watson Pharmaceuticals, Inc., Watson Pharma, Inc., and Watson Laboratories, Inc. are referred to collectively as “Actavis.” 32. Actavis manufactures, promotes, sells, and distributes opioids, including the 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 10 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 14 of 110 1 branded drugs Kadian and Norco, a generic version of Kadian, and generic versions of Duragesic 2 and Opana, in the U.S., including in Washington. Actavis has registered with the Washington 3 State Department of Health as a Pharmacy Wholesaler. 4 33. MALLINCKRODT, PLC is an Irish public limited company headquartered in 5 6 Staines-upon-Thames, United Kingdom, with its U.S. headquarters in St. Louis, Missouri. 7 MALLINCKRODT, LLC, is a limited liability company organized and existing under the laws of 8 the State of Delaware. Mallinckrodt, LLC is a wholly owned subsidiary of Mallinckrodt, plc. 9 Mallinckrodt, plc and Mallinckrodt, LLC are collectively referred to as “Mallinckrodt.” 10 34. Mallinckrodt manufactures, markets, and sells drugs in the United States 11 12 including generic oxycodone, of which it is one of the largest manufacturers. In July 2017, 13 Mallinckrodt agreed to pay $35 million to settle allegations brought by the Department of Justice 14 that it failed to detect and notify the DEA of suspicious orders of controlled substances. 15 Mallinckrodt has been registered with the Washington State Department of Health as a Pharmacy 16 Wholesaler. 17 35. 18 19 20 21 22 Collectively, Purdue, Cephalon, Janssen, Endo, Actavis and Mallinckrodt are the “Pharmaceutical Defendants.” C. Distributor Defendants CARDINAL HEALTH, INC. (“Cardinal”) is a publicly traded company 36. incorporated under the laws of Ohio and with a principal place of business in Ohio. 23 24 37. Cardinal distributes prescription opioids to providers and retailers, including 25 in Washington. Cardinal is also registered with the Washington Department of Health as a 26 pharmacy, a pharmaceutical manufacturer, a non-resident pharmacist, and a pharmaceutical 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 11 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 15 of 110 1 wholesaler. 2 3 38. AMERISOURCEBERGEN CORPORATION (“AmerisourceBergen”) is a publicly traded company incorporated under the laws of Delaware and with a principal place of 4 business in Pennsylvania. 5 39. 6 AmerisourceBergen distributes prescription opioids to providers and retailers, 7 including in Washington. AmerisourceBergen is registered with the Washington Department of 8 Health as a pharmaceutical wholesaler. 9 40. MCKESSON CORPORATION (“McKesson”) is a publicly traded company 10 incorporated under the laws of Delaware and with a principal place of business in San Francisco, 11 12 13 California. 41. McKesson distributes prescription opioids to providers and retailers, including 14 in Washington. McKesson is registered with the Washington Department of Health as a 15 pharmaceutical wholesaler and a non-resident pharmacist. 16 42. Collectively, Cardinal, AmerisourceBergen, and McKesson are the “Distributor 17 18 19 Defendants”. 43. The data which reveals and/or confirms the identity of each wrongful opioid 20 distributor is hidden from public view in the DEA’s confidential ARCOS database. See Madel v. 21 U.S. Dep't of Justice, 784 F.3d 448, 451 (8th Cir. 2015). Neither the DEA nor the wholesale 22 distributors will voluntarily disclose the data necessary to identify with specificity the transactions 23 24 25 26 which will form the evidentiary basis for the claims asserted herein. See id. at 452-53. 44. Collectively, AmerisourceBergen, Cardinal, and McKesson dominate 85% of the market share for the distribution of prescription opioids. The “Big 3” are Fortune 500 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 12 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 16 of 110 1 corporations listed on the New York Stock Exchange whose principal business is the nationwide 2 wholesale distribution of prescription drugs. See Fed. Trade Comm’n v. Cardinal Health, Inc., 12 3 F. Supp. 2d 34, 37 (D.D.C. 1998) (describing Cardinal, McKesson, and AmerisourceBergen 4 predecessors). Each has been investigated and/or fined by the DEA for the failure to report 5 6 suspicious orders. The Tribes have reason to believe each has engaged in unlawful conduct which 7 resulted in the diversion of prescription opioids into the Tribes’ communities. The Tribes name 8 each of the “Big 3” herein as defendants and places the industry on notice that the Tribes are acting 9 to abate the public nuisance plaguing their communities. The Tribes will request expedited 10 discovery pursuant to Rule 26(d) of the Federal Rules of Civil Procedure to secure the data 11 12 13 necessary to reveal and/or confirm the identities of the wholesale distributors, including data from the ARCOS database. 14 D. 15 16 John and Jane Does 1-100, inclusive 45. In addition to Defendants, the true names, roles, and/or capacities in the wrongdoing alleged herein of Defendants named John and Jane Does 1 through 100, inclusive, 17 18 are currently unknown to Plaintiffs, and thus are named Defendants under ficitious names as 19 permitted by the Rules of this Court. Plaintiffs will amend this complaint and identify their true 20 identities and their involvement in the wrongdoing at issue, as well as the specific causes of action 21 asserted against them when they become known. 22 III. JURISDICTION AND VENUE 23 24 46. This Court has subject-matter jurisdiction under 28 U.S.C. § 1331 because this 25 action presents a federal question. This Court has supplemental jurisdiction over the state-law 26 causes of action under 28 U.S.C. § 1367 because the state-law claims are part of the same case or 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 13 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 17 of 110 1 controversy. 2 3 47. This Court has personal jurisdiction over all Defendants because all Defendants have substantial contacts and business relationships with the State of Washington, 4 including consenting to be sued in Washington by registering an agent for service of process 5 6 and/or obtaining a Washington Department of Health license, and have purposefully availed 7 themselves of business opportunities within the State of Washington, including by marketing, 8 distributing, or selling prescription opioids within the State of Washington and within the Tribes’ 9 communities. 10 48. This Court also has personal jurisdiction over all of the defendants under 18 11 12 U.S.C. § 1965(b). This Court may exercise nationwide jurisdiction over the named Defendants 13 where the “ends of justice” require national service and Plaintiff demonstrates national contacts. 14 Here, the interests of justice require that Plaintiff be allowed to bring all members of the 15 nationwide RICO enterprise before the court in a single trial. See, e.g., Iron Workers Local Union 16 No. 17 Ins. Fund v. Philip Morris Inc., 23 F. Supp. 2d 796 (N.D. Ohio 1998). 17 49. 18 Venue is proper in this Court under 28 U.S.C. § 1391(b) and 18 U.S.C. § 1965 19 because a substantial part of the events or omissions giving rise to this action occurred in this 20 judicial district and because all defendants are subject to this Court’s exercise of personal 21 jurisdiction. 22 IV. ADDITIONAL FACTUAL ALLEGATIONS 23 24 25 26 A. Overview of the Opioid Epidemic 50. The term “opioid” includes all drugs derived from the opium poppy. The United States Food and Drug Administration describes opioids as follows: “Prescription opioids 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 14 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 18 of 110 1 are powerful pain-reducing medications that include prescription oxycodone, hydrocodone, and 2 morphine, among others, and have both benefits as well as potentially serious risks. These 3 medications can help manage pain when prescribed for the right condition and when used 4 properly. But when misused or abused, they can cause serious harm, including addiction, 5 6 overdose, and death.”13 51. 7 Prescription opioids with the highest potential for addiction are listed under 8 Schedule II of the Controlled Substances Act. This includes non-synthetic opium derivatives (such 9 as codeine and morphine, also known generally as “opiates”), partially synthetic derivatives (such 10 as hydrocodone and oxycodone), and fully synthetic derivatives (such as fentanyl and methadone). 11 52. 12 Historically, opioids were considered too addictive and debilitating for the 13 treatment of chronic pain, like back pain, migraines, and arthritis. According to Dr. Caleb 14 Alexander, director of Johns Hopkins University’s Center for Drug Safety and Effectiveness, 15 “[opioids] have very, very high inherent risks . . . and there’s no such thing as a fully safe 16 opioid.”14 17 53. 18 Opioids also tend to induce tolerance, whereby a person who uses opioids 19 repeatedly over time no longer responds to the drug as strongly as before, thus requiring a higher 20 dose to achieve the same effect. This tolerance contributes to the high risk of overdose during a 21 relapse. 22 54. Before the 1990s, generally accepted standards of medical practice dictated 23 24 25 26 13 See U.S. Food & Drug Admin.,U.S. Dep't of Health and Human Servs., Opioid Medications, https://www.fda.gov/Drugs/DrugSafety/InformationbyDrugClass/ucm337066.htm (last updated Feb. 15, 2018). 14 Matthew Perrone et al., Drugmakers push profitable, but unproven, opioid solution, Center for Public Integrity, Dec. 15, 2016, available at https://www.publicintegrity.org/2016/12/15/20544/drugmakers-push-profitableunproven-opioid-solution (last accessed Feb. 27, 2018). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 15 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 19 of 110 1 that opioids should only be used short-term for acute pain, pain relating to recovery from surgery, 2 or for cancer or palliative (end-of-life) care. Due to the lack of evidence that opioids improved 3 patients’ ability to overcome pain and function, coupled with evidence of greater pain complaints 4 as patients developed tolerance to opioids over time, and the serious risk of addiction and other 5 6 7 side effects, the use of opioids for chronic pain was discouraged or prohibited. As a result, doctors generally did not prescribe opioids for chronic pain. 8 9 55. To take advantage of the much larger and more lucrative market for chronic pain patients, the Pharmaceutical Defendants had to change this.15 10 56. As described herein, Defendants engaged in conduct that directly caused 11 12 13 doctors to unwittingly prescribe skyrocketing amounts of opioids. Defendants also intentionally neglected their obligations to prevent diversion of the highly addictive substance. 14 15 16 57. As a result of Defendants’ wrongful conduct, the number of prescriptions for opioids increased sharply, reaching nearly 250,000,000 prescriptions in 2013, almost enough for every person in the United States to have a bottle of pills. This represents an increase of 300% 17 18 since 1999. In 2014, there were enough opioid prescriptions in the State of Washington for 831 19 out of every 1,000 residents to have his or her own bottle of opiates.16 In Clallam County, there 20 were 1,164 opioid prescriptions per every 1,000 residents;17 in Jefferson County, there were 819.6 21 See Harriet Ryan et al., ‘You want a description of hell?’ OxyContin’s 12-hour problem, L.A. Times, May 5, 2016, available at http://www.latimes.com/projects/oxycontin-part1 (last accessed Feb. 27, 2018). 16 Population and Total Controlled Substances Prescriptions, Clallam County, CY 2014, Washington State Department of Health 630-126 (May 2017), https://www.doh.wa.gov/Portals/1/Documents/2600/PMPcountyProfiles/630-126-ClallamCountyProfile2014.pdf. 17 Id. 15 22 23 24 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 16 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 20 of 110 1 opioid prescriptions for every 1,000 residents;18 and in Kitsap County, 788.319 2 3 58. Many Americans, including Washingtonians and members of the Tribes, are now addicted to prescription opioids. In 2016, drug overdoses killed over 60,000 people in the 4 United States, an increase of more than 22 percent over the previous year. The New York Times 5 6 reported in September 2017 that the opioid epidemic is now killing babies and toddlers because 7 deadly opioids are “everywhere” and are mistaken as candy.20 The opioid epidemic has been declared 8 a public health emergency by the President of the United States. 9 59. The wave of addiction was created by the increase in opioid prescriptions. One 10 in four Americans receiving long-term opioid therapy struggles with opioid addiction. Nearly two 11 12 million Americans have a prescription opioid use disorder. 60. 13 In Washington State, nearly 700 people died of opioid overdoses in 2016, with 14 more than half of those arising from prescriptions, and most others from heroin overdoses. 15 However, 80 percent of heroin users started using opioids from prescription sources.21 The 16 problem in Washington State is most acute in Native American communities, where the overdose 17 18 rate is more than twice as high as that among white Washingtonians.22 61. 19 20 21 22 23 24 25 26 According to the National Institute of Health’s National Institute on Drug 18 Population and Total Controlled Substances Prescriptions, Jefferson County, CY 2014, Washington State Department of Health 630-126 (May 2017), https://www.doh.wa.gov/Portals/1/Documents/2600/PMPcountyProfiles/630-126-JeffersonCountyProfile2014.pdf. 19 Population and Total Controlled Substances Prescriptions, Kitsap County, CY 2014, Washington State Department of Health 630-126 (May 2017), https://www.doh.wa.gov/Portals/1/Documents/2600/PMPcountyProfiles/630-126-KitsapCountyProfile2014.pdf. 20 Julie Turkewitz, “The Pills are Everywhere:” How the Opioid Crisis Claims Its Youngest Victims, N.Y. Times, Sept. 20, 2017, available at https://www.nytimes.com/2017/09/20/us/opioid-deaths-children.html (last accessed Feb. 27, 2018). 21 Office of the Att'y Gen. of Washington State, Reducing the Supply of Illegal Opioids in Washington State, Report of 2017 Summit (Nov. 2017), available at http://www.atg.wa.gov/opioid-epidemic. 22 Austin Jenkins, Inslee Wants Washington State to Declare Opioid ‘Public Health Crisis,’ KUOW.org (Jan 12, 2018), available at http://kuow.org/post/inslee-wants-washington-state-declare-opioid-public-health-crisis. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 17 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 21 of 110 1 Abuse, approximately 21 to 29 percent of patients prescribed opioids for chronic pain misuse them. 2 Between 8 and 10 percent develop an opioid use disorder. Four to 6 percent of people who misuse 3 prescription opioids transition to heroin abuse, and about 80 percent of people who use heroin first 4 misused prescription opioids. 5 6 7 8 62. Deaths from prescription opioids have quadrupled in the past 20 years. 63. Treatment admissions for abuse of opioids and emergency room visits for non- medical opioid use have also dramatically increased. 9 64. The increases in opioid deaths and treatments are directly tied to the prescribing 10 practices created by Defendants. According to the CDC, opioid analgesic sales increased four-fold 11 12 13 between 1999 and 2010, and this was paralleled by an increase in opioid overdose deaths and substance abuse treatment admissions during the same time period:23 14 15 16 17 18 19 20 21 22 23 24 U.S. Dep’t of Health & Human Servs., Addressing Prescription Drug Abuse in the United States at 14 (Sept. 2013), https://www.cdc.gov/drugoverdose/pdf/hhs_prescription_drug_abuse_report_09.2013.pdf. 23 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 18 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 22 of 110 65. 1 2 3 People who are addicted to prescription opioid painkillers are forty times more likely to be addicted to heroin.24 Heroin is pharmacologically similar to prescription opioids. Available data indicates that the nonmedical use of prescription opioids is a strong risk factor for 4 heroin use. According to the CDC, heroin drug overdose deaths have more than tripled between 5 6 2012 and 2016.25 66. 7 8 9 10 Prescription opioid abuse “is a serious national crisis that affects public health as well as social and economic welfare.” The economic burden of prescription opioid misuse alone is $78.5 billion a year, including the costs of healthcare, lost productivity, addiction treatment, and criminal justice expenditures.26 11 67. 12 Prescription opioid abuse disproportionately impacts American Indian 13 communities, including the Tribes. The CDC reported in 2012 that 1 in 10 American 14 Indians/Alaska Natives (over the age of 12) used prescription pain medicine for nonprescription 15 purposes, compared with 1 in 20 whites and 1 in 30 African-Americans.27 The Plaintiff Tribes are 16 also disproportionately affected. In Washington State, American Indians die of drug overdoses 17 18 19 20 21 22 23 24 25 26 at a rate of 29 in 100,000, compared to a rate of 12 for whites, 11 for African Americans, 3 for Latino/as, and 2 for Asian Americans.28 Centers for Disease Control, Today’s Heroin Epidemic, Webpage, https://www.cdc.gov/vitalsigns/heroin/infographic.html#infographic (last updated July 7, 2015). 25 Rose A Rudd, et al., Increases in Drug and Opioid-Involved Overdose Deaths – United States 2010-2015, 65 Morbidity & Mortality Wkly. Rep. 1445 (2016), https://www.cdc.gov/mmwr/volumes/65/wr/mm655051e1.htm. 26 Opioid Overdose Crisis, NIH, National Institute on Drug Abuse, Webpage, available at https://www.drugabuse.gov/drugs-abuse/opioids/opioid-crisis. 27 US Medicine (2012). IHS Grapples with Pervasive Prescription Opioid Misuse in Tribal Areas. Addiction, available at http://www.usmedicine.com/clinical-topics/addiction/ihs-grapples-with-pervasive-prescription-opioidmisuse-in-tribal-areas/. 28 Christine Vestal, Fighting Opioid Abuse in Indian Country, Stateline, Pew Charitable Trusts (Dec. 6, 2016), http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2016/12/06/fighting-opioid-abuse-in-indiancountry. 24 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 19 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 23 of 110 68. 1 Drug overdose deaths among all Americans increased more than 200 percent 2 between 1999 and 2015. In that same time, the death rate rose by more than 500 percent among 3 American Indians and Alaska Natives.29 4 69. The death rate for heroin overdoses among Native Americans has also 5 6 skyrocketed, rising 236 percent from 2010 to 2014.30 70. 7 8 particularly in the areas home to the Tribes. 9 B. The Pharmaceutical Defendants spread false or misleading information about the safety of opioids. 10 11 12 13 There is limited access to opioid treatment programs in Washington State, 71. Each Pharmaceutical Defendant developed a well-funded marketing scheme based on deception to persuade doctors and patients that opioids can and should be used for treatment of chronic pain, resulting in opioid treatment for a far larger group of patients who are 14 15 much more likely to become addicted. In connection with this scheme, each Pharmaceutical 16 Defendant spent, and continued to spend, millions of dollars on promotional activities and 17 materials that falsely deny or minimize the risks of opioids while overstating the benefit of using 18 them for chronic pain. 19 72. The deceptive marketing schemes included, among others, (1) false or 20 21 misleading direct, branded advertisements; (2) false or misleading direct-to-physician marketing, 22 also known as “detailing;” (3) false or misleading materials, speaker programs, webinars, and 23 brochures; and (4) false or misleading unbranded advertisements or statements by purportedly 24 29 25 26 27 Eugene Scott, Native Americans, among the most harmed by the opioid epidemic, are often left out of the conversation, Wash. Post, Oct. 30, 2017, available at http://wapo.st/2hnjL4f?tid=ss_mail&utm_term=.ea1ca76fe714 (last accessed Feb. 27, 2018). 30 Dan Nolan and Chris Amico, How Bad is the Opioid Epidemic?, PBS.org (Feb. 23, 2016), available at https://www.pbs.org/wgbh/frontline/article/how-bad-is-the-opioid-epidemic/ (last accessed Feb. 27, 2018). HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 20 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 24 of 110 1 neutral third parties that were really designed and distributed by the Pharmaceutical Defendants. 2 In addition to using third parties to disguise the source of their misinformation campaign, the 3 Pharmaceutical Defendants also retained the services of certain physicians, known as “key 4 opinion leaders” or “KOLs” to convince both doctors and patients that opioids were safe for the 5 6 7 8 9 10 treatment of chronic pain. 73. The Pharmaceutical Defendants have made false and misleading claims, contrary to the language on their drugs’ labels regarding the risks of using their drugs that: (1) downplayed the seriousness of addiction; (2) created and promoted the concept of “pseudoaddiction” when signs of actual addiction began appearing and advocated that the signs 11 12 of addiction should be treated with more opioids; (3) exaggerated the effectiveness of screening 13 tools to prevent addiction; (4) claimed that opioid dependence and withdrawal are easily 14 managed; (5) denied the risks of higher dosages; and (6) exaggerated the effectiveness of “abuse- 15 deterrent” opioid formulations to prevent abuse and addiction. The Pharmaceutical Defendants 16 have also falsely touted the benefits of long-term opioid use, including the supposed ability of 17 18 19 20 21 22 opioids to improve function and quality of life, even though there was no scientifically reliable evidence to support the Pharmaceutical Defendants’ claims. 74. The Pharmaceutical Defendants have disseminated these common messages to reverse the popular and medical understanding of opioids and risks of opioid use. They disseminated these messages directly, through their sales representatives, in speaker groups led 23 24 by physicians the Pharmaceutical Defendants recruited for their support of the Pharmaceutical 25 Defendants’ marketing messages, through unbranded marketing and through industry-funded 26 front groups. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 21 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 25 of 110 75. 1 2 3 These statements were not only unsupported by or contrary to the scientific evidence, they were also contrary to pronouncements by and guidance from the FDA and CDC based on that same evidence. 4 76. The Pharmaceutical Defendants began their marketing schemes decades ago 5 6 and continue them today. 77. 7 8 As discussed herein, the 2016 CDC Guideline makes it patently clear that the Pharmaceutical Defendants’ schemes were and continue to be deceptive.31 9 78. On information and belief, as a part of their deceptive marketing scheme, the 10 Pharmaceutical Defendants identified and targeted susceptible prescribers and vulnerable patient 11 12 populations in the U.S., including in Washington. 79. 13 For example, on information and belief, the Pharmaceutical Defendants 14 focused their deceptive marketing on primary care doctors, who were more likely to treat chronic 15 pain patients and prescribe them drugs, but were less likely to be schooled in treating pain and 16 the risks and benefits of opioids and therefore more likely to accept the Pharmaceutical 17 18 Defendants’ misrepresentations. 80. 19 20 On information and belief, the Pharmaceutical Defendants also targeted vulnerable patient populations like the elderly and veterans, injured workers, and cancer patients, 21 31 22 23 Deborah Dowell et al., CDC Guideline for Prescribing Opioids for Chronic Pain—United States, 2016, 65 Morbidity & Mortality Wkly. Rep. 1 (2016) [hereinafter "2016 CDC Guideline"], available at https://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm. 24 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 22 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 26 of 110 1 who tend to suffer from chronic pain.32 In Washington, deaths due to opioid prescriptions are 2 highest among 45-65 year olds.33 3 81. The Pharmaceutical Defendants targeted these vulnerable patients even though 4 the risks of long-term opioid use were significantly greater for them. For example, the 2016 CDC 5 6 Guideline observed that existing evidence showed that elderly patients taking opioids suffer from 7 elevated fall and fracture risks, greater risk of hospitalization, and increased vulnerability to 8 adverse drug effects and interactions. The Guideline therefore concluded that there are special 9 risks of long-term opioid use for elderly patients and recommended that doctors use “additional 10 caution and increased monitoring”34 to minimize the risks of opioid use in elderly patients. The 11 12 13 same is true for veterans, who are more likely to use anti-anxiety drugs (benzodiazepines) for posttraumatic stress disorder, which interact dangerously with opioids. 14 15 16 82. To increase the impact of their deceptive marketing schemes, on information and belief the Pharmaceutical Defendants coordinated and created unified marketing plans to ensure that the Pharmaceutical Defendants’ messages were consistent and effective across all their 17 18 marketing efforts. 83. 19 Defendants’ efforts have been wildly successful. Opioids are now the most 20 prescribed class of drugs. Globally, opioid sales generated $1.1 billion in revenue for drug 21 companies in 2010 alone; sales in the United States have exceeded $8 billion in revenue annually 22 23 24 25 32 Gary Franklin, et al., A Comprehensive Approach to Address the Prescription Opioid Epidemic in Washington State: Milestones and Lessons Learned, 105 AM. J. PUB. HEALTH 463 (March 2015), available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4330848/. 33 Washington State Dep’t of Health, Opioid-related Deaths in Washington State 2006-2016, (May 2017) https://www.doh.wa.gov/Portals/1/Documents/Pubs/346-083-SummaryOpioidOverdoseData.pdf. 34 2016 CDC Guideline, supra note 31, at 27. 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 23 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 27 of 110 1 since 2009.35 In an open letter to the nation’s physicians in August 2016, the then-U.S. surgeon 2 General expressly connected this “urgent health crisis” to heavy marketing of opioids to doctors. 3 . . [m]any of [whom] were even taught – incorrectly – that opioids are not addictive when 4 prescribed for legitimate pain.”36 5 84. 6 The Pharmaceutical Defendants intentionally continued their conduct, as 7 alleged herein, with knowledge that such conduct was creating the opioid nuisance and causing 8 the harms and damages alleged herein. 9 1. The Pharmaceutical Defendants engaged in false and misleading direct marketing of opioids. 85. The Pharmaceutical Defendants’ direct marketing of opioids generally 10 11 12 proceeded on two tracks: advertising campaigns and direct-to-physician marketing. 13 86. First, each Pharmaceutical Defendant conducted and continues to conduct 14 15 advertising campaigns touting the purported benefits of their branded drugs. For example, upon 16 information and belief, the Pharmaceutical Defendants spent more than $14 million on medical 17 journal advertising of opioids in 2011, nearly triple what they spent in 2001. 18 19 87. A number of the Pharmaceutical Defendants’ branded ads deceptively portrayed the benefits of opioids for chronic pain. For example: 20 a. Endo, on information and belief, has distributed and made available on its 21 22 website opana.com a pamphlet promoting Opana ER with photographs depicting 23 patients with physically demanding jobs like construction worker and chef, 24 See Katherine Eban, Oxycontin: Purdue Pharma’s Painful Medicine, Fortune (Nov. 9, 2011), available at http://fortune.com/2011/11/09/oxycontin-purdue-pharmas-painful-medicine/; David Crow, Drugmakers Hooked on 10bn Opioid Habit, Fin. Times (August 10, 2016), available at https://www.ft.com/content/f6e989a8-5dac-11e6bb77-a121aa8abd95. 36 Murthy, supra note 11. 35 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 24 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 28 of 110 1 misleadingly implying that the drug would provide long-term pain relief and 2 functional improvement. 3 b. On information and belief, Purdue also ran a series of ads, called “Pain 4 vignettes,” for OxyContin in 2012 in medical journals. These ads featured chronic 5 pain patients and recommended OxyContin for each. One ad described a “54-year- 6 7 old writer with osteoarthritis of the hands” and implied that OxyContin would help 8 the writer work more effectively. 9 88. Although Endo and Purdue agreed in late 2015 and 2016 to halt these 10 misleading representations in New York, they continued to disseminate them elsewhere. 11 12 89. The direct advertising disseminated by the Pharmaceutical Defendants did not 13 disclose studies that were not favorable to their products, nor did they disclose that they did not 14 have clinical evidence to support many of their claims. 15 2. The Pharmaceutical Defendants used “detailing” and speaker programs to spread false and misleading information about opioids. 90. Second, each Pharmaceutical Defendant promoted the use of opioids for 16 17 18 19 chronic pain through “detailers”—sophisticated and specially trained sales representatives who visited individual doctors and medical staff in their offices—and small group speaker programs. 20 21 22 23 24 25 91. The Pharmaceutical Defendants invested heavily in promoting the use of opioids for chronic pain through detailers and small group speaker programs. 92. The Pharmaceutical Defendants have not corrected this misinformation. Instead, each Defendant devoted massive resources to direct sales contacts with doctors. Upon information and belief, the Pharmaceutical Defendants spend in excess of $168 million in 2014 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 25 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 29 of 110 1 alone on detailing branded opioids to doctors, more than twice what they spent on detailing in 2 2000. 3 93. On information and belief, these detailers have spread and continue to spread 4 misinformation regarding the risks and benefits of opioids to hundreds of thousands of doctors, 5 6 7 including doctors in Washington. For example, on information and belief, the Pharmaceutical Defendants’ detailers, over the past two years, continue to falsely and misleadingly: 8 a. Describe the risk of addiction as low or fail to disclose the risk of addition; 9 b. Describe their opioid products as “steady state” – falsely implying that these 10 products are less likely to produce the high and lows that fuel addiction – or as less 11 12 likely to be abused or result in addiction; 13 c. Tout the effectiveness of screening or monitoring patients as a strategy for 14 managing opioid abuse and addiction; 15 d. State that there is no maximum dose and that doctors can safely increase doses 16 without disclosing the significant risks to patients at higher doses; 17 18 e. Discuss “pseudoaddiction”; 19 f. State that patients would not experience withdrawal if they stopped using their 20 opioid products; 21 g. State that their opioid products are effective for chronic pain without disclosing 22 the lack of evidence for the effectiveness of long-term opioid use; and 23 24 25 h. State that abuse-deterrent formulations are tamper- or crush-resistant and harder to abuse or misuse. 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 26 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 30 of 110 94. 1 Because these detailers must adhere to scripts and talking points drafted by the 2 Pharmaceutical Defendants, it can be reasonably inferred that most, if not all, of the 3 Pharmaceutical Defendants’ detailers made and continue to make these misrepresentations to the 4 thousands of doctors they have visited and continue to visit. The Pharmaceutical Defendants have 5 6 not corrected this misinformation. 95. 7 8 9 The Pharmaceutical Defendants’ detailing to doctors was highly effective in the national proliferation of prescription opioids. On information and belief, the Pharmaceutical Defendants used sophisticated data mining and intelligence to track and understand the rates of 10 initial prescribing and renewal by individual doctors, allowing specific and individual targeting, 11 12 customizing, and monitoring of their marketing. 96. 13 The Pharmaceutical Defendants also identified doctors to serve, for payment 14 and other remuneration, on their speakers’ bureaus and to attend programs with speakers and 15 meals paid for by the Pharmaceutical Defendants. These speakers gave the false impression that 16 they are providing unbiased and medically accurate presentations when they were, in fact, 17 18 presenting a script prepared by the Pharmaceutical Defendants. On information and belief, these 19 presentations conveyed misleading information, omitted material information, and failed to 20 correct the Pharmaceutical Defendants’ prior misrepresentations about the risks and benefits of 21 opioids. 22 97. Each Pharmaceutical Defendant devoted and continues to devote massive 23 24 25 26 resources to direct sales contacts with doctors. 98. Marketing impacts prescribing habits, with face-to-face detailing having the greatest influence. On information and belief, more frequent prescribers are generally more likely 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 27 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 31 of 110 1 to have received a detailing visit, and in some instances, more infrequent prescribers of opioids 2 received a detailing visit from a Pharmaceutical Defendant’s detailer and then prescribed only 3 that Pharmaceutical Defendant’s opioid products. 4 99. The FDA has cited at least one Pharmaceutical Defendant for deceptive 5 6 promotions by its detailers and direct-to-physician marketing. In 2010, the FDA notified Actavis 7 that certain brochures distributed by Actavis were “false or misleading because they omit and 8 minimize the serious risks associated with the drug, broaden and fail to present the limitations to 9 10 the approved indication of the drug, and present unsubstantiated superiority and effectiveness claims.” The FDA also found that “[t]hese violations are a concern from a public health 11 12 13 perspective because they suggest that the product is safer and more effective than has been demonstrated.”37 14 3. The Pharmaceutical Defendants deceptively marketed opioids through unbranded advertising disseminated by seemingly independent third parties but which was really created by the Pharmaceutical Defendants. 100. The Pharmaceutical Defendants also deceptively marketed opioids through 15 16 17 18 unbranded advertising – i.e., advertising that promotes opioid use generally but does not name a 19 specific opioid. This advertising was ostensibly created and disseminated by independent third 20 parties. But by funding, directing, reviewing, editing, and distributing this unbranded advertising, 21 the Pharmaceutical Defendants coordinated and controlled the deceptive messages disseminated 22 by these third parties and acted in concert with them to falsely and misleadingly promote opioids 23 24 25 26 for the treatment of chronic pain. 37 Letter from Thomas Abrams, Director, Div. of Drug Marketing, Advertising & Communications, U.S. Food & Drug Admin., to Doug Boothe, CEO, Actavis Elizabeth LLC (Feb. 18, 2010), available at http://www.fdanews.com/ext/resources/files/archives/a/ActavisElizabethLLC.pdf. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 28 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 32 of 110 1 2 3 101. The Pharmaceutical Defendants marketed opioids through third-party, unbranded advertising to avoid regulatory scrutiny because that advertising is not submitted to and typically is not reviewed by the FDA. The Pharmaceutical Defendants also used third-party, 4 unbranded advertising to give the false appearance that the deceptive messages came from an 5 6 independent and objective source. Like tobacco companies, the Pharmaceutical Defendants used 7 third parties that they funded, directed, and controlled to carry out and conceal their scheme to 8 deceive doctors and patients about the risks and benefits of long-term opioid use for chronic pain. 9 102. The Pharmaceutical Defendants’ deceptive unbranded marketing often 10 contradicted what they said in their branded materials reviewed by the FDA. 11 12 103. The Pharmaceutical Defendants also spoke through a small circle of doctors— 13 KOLs—who, upon information and belief, were selected, funded, and elevated by the 14 Pharmaceutical Defendants because their public positions supported the use of opioids to treat 15 chronic pain. 16 104. Pro-opioid doctors are one of the most important avenues that the 17 18 Pharmaceutical Defendants use to spread their false and misleading statements about the risks 19 and benefits of long-term opioid use. The Pharmaceutical Defendants know that doctors rely 20 heavily and more uncritically on their peers for guidance, and KOLs provide the false appearance 21 of unbiased and reliable support for chronic opioid therapy. 22 105. For example, the New York Attorney General (“NY AG”) found in its 23 24 settlement with Purdue that through March 2015, the Purdue website “In the Face of Pain” failed 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 29 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 33 of 110 1 to disclose that doctors who provided testimonials on the site were paid by Purdue, 38 and 2 concluded that Purdue’s failure to disclose these financial connections potentially misled 3 consumers regarding the objectivity of the testimonials. 4 106. Pro-opioid KOLs have admitted to making false claims about the effectiveness 5 6 of opioids. Dr. Russell Portenoy received research support, consulting fees, and other 7 compensation from Cephalon, Endo, Janssen, and Purdue, among others. Dr. Portenoy admitted 8 that he “gave innumerable lectures . . . about addictions that weren’t true.” His lectures falsely 9 10 claimed that fewer than 1 percent of patients would become addicted to opioids. Dr. Portenoy admitted that the primary goal was to “destigmatize” opioids, and he conceded that “[d]ata about 11 12 the effectiveness of opioids does not exist.” According to Dr. Portenoy, “Did I teach about pain 13 management specifically about opioid therapy, in a way that reflects misinformation? Well,. . . 14 .I guess I did.” Dr. Portenoy admitted that “[i]t was clearly the wrong thing to do.”39 15 16 107. Dr. Portenoy also made frequent media appearances promoting opioids and spreading misrepresentation, such as his claim that “the likelihood that the treatment of pain using 17 18 an opioid drug which is prescribed by a doctor will lead to addiction is extremely low.” He 19 appeared on Good Morning America in 2010 to discuss the use of opioids long-term to treat 20 chronic pain. On this widely-watched program, broadcast across the country, Dr. Portenoy 21 claimed: “Addiction, when treating pain, is distinctly uncommon. If a person does not have a 22 23 24 25 38 See New York State Office of the Att'y Gen., A.G. Schneiderman Announces Settlement with Purdue Pharma That Ensures Responsible and Transparent Marketing Of Prescription Opioid Drugs By The Manufacturer (August 20, 2015), https://ag.ny.gov/press-release/ag-schneiderman-announces-settlement-purdue-pharma-ensuresresponsible-and-transparent (last accessed Feb. 27, 2018). 39 Thomas Catan & Evan Perez, A Pain-Drug Champion Has Second Thoughts, Wall St. J. (Dec. 17, 2012), available at https://www.wsj.com/articles/SB10001424127887324478304578173342657044604 (last accessed Feb. 27, 2018). 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 30 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 34 of 110 1 history, a personal history, of substance abuse, and does not have a history in the family of 2 substance abuse, and does not have a very major psychiatric disorder, most doctors can feel very 3 assured that the person is not going to become addicted.”40 4 108. Another KOL, Dr. Lynn Webster, was the co-founder and Chief Medical 5 6 Director of Lifetree Clinical Research, an otherwise unknown pain clinic in Salt Lake City, Utah. 7 Dr. Webster was President of the American Academy of Pain Medicine (“AAPM”) in 2013. He 8 is a Senior Editor of Pain Medicine, the same journal that published Endo special advertising 9 supplements touting Opana ER. Dr. Webster was the author of numerous CMEs sponsored by 10 Cephalon, Endo and Purdue. At the same time, Dr. Webster was receiving significant funding 11 12 from the Pharmaceutical Defendants (including nearly $2 million from Cephalon). 109. 13 Ironically, Dr. Webster created and promoted the Opioid Risk Tool, a five- 14 question, one-minute screening tool relying on patient self-reports that purportedly allows doctors 15 to manage the risk that their patients will become addicted to or abuse opioids. The claimed ability 16 to pre-sort patients likely to become addicted is an important tool in giving doctors confidence to 17 18 prescribe opioids long-term, and, for this reason, references to screening appear in various 19 industry supported guidelines. Versions of Dr. Webster’s Opioid Risk Tool appear on, or are 20 linked to, websites run by Endo, Janssen and Purdue. Unaware of the flawed science and industry 21 bias underlying this tool, certain states and public entities have incorporated the Opioid Risk Tool 22 into their own guidelines, indicating, also, their reliance on the Pharmaceutical Defendants and 23 24 25 those under their influence and control. 40 Good Morning America (ABC television broadcast Aug. 30, 2010). 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 31 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 35 of 110 110. 1 2 3 4 In 2011, Dr. Webster presented via webinar a program sponsored by Purdue entitled “Managing Patient’s Opioid Use: Balancing the Need and the Risk.” Dr. Webster recommended use of risk screening tools, urine testing and patient agreements as a way to prevent “overuse of prescriptions” and “overdose deaths.” This webinar was available to and was intended 5 6 to reach doctors in the Tribes’ communities and doctors treating members of the Tribes’ 7 communities.41 8 111. 9 10 Dr. Webster also was a leading proponent of the concept of “pseudoaddiction,” the notion that addictive behaviors should be seen not as warnings, but as indications of undertreated pain. In Dr. Webster’s description, the only way to differentiate the two was to 11 12 increase a patient’ dose of opioids. As he and co-author Beth Dove wrote in their 2007 book 13 Avoiding Opioid Abuse While Managing Pain—a book that is still available online—when faced 14 with signs of aberrant behavior, increasing the dose “in most cases . . . should be the clinician’s 15 first response.”42 Upon information and belief, Endo distributed this book to doctors. Years later, 16 Dr. Webster reversed himself, acknowledging that “[pseudoaddiction] obviously became too 17 18 much of an excuse to give patients more medication.”43 112. 19 The Pharmaceutical Defendants cited and promoted favorable studies or 20 articles by their KOLs. By contrast Pharmaceutical Defendants did not support, acknowledge, or 21 disseminate publications of doctors unsupportive or critical of chronic opioid therapy. 22 23 24 25 See Emerging Solutions in Pain, Managing Patient’s Opioid Use: Balancing the Need and the Risk, http://www.emergingsolutionsinpain.com/ce-education/opioidmanagement?option=com_continued&view=frontmatt er&Itemid=303 &course=209 (last visited Feb. 22, 2018). 42 Lynn R. Webster & Beth Dove, Avoiding Opioid Abuse While Managing Pain at 59 (2007). 43 John Fauber, Painkiller Boom Fueled by Networking, Milwaukee Wisc. J. Sentinel (Feb. 18, 2012). 41 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 32 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 36 of 110 1 2 3 4 113. On information and belief, the Pharmaceutical Defendants also entered into arrangements with seemingly unbiased and independent patient and professional organizations to promote opioids for the treatment of chronic pain. Under the direction and control of the Pharmaceutical Defendants, these “Front Groups” – which include, but are not limited to, the 5 6 American Pain Foundation (“APF”) (of which Dr. Portenoy was a member) and the American 7 Academy of Pain Medicine – generated treatment guidelines, unbranded materials, and programs 8 that favored chronic opioid therapy. The evidence did not support these guidelines, materials, and 9 programs at the time they were created, and the scientific evidence does not support them today. 10 Indeed, they stand in marked contrast to the 2016 CDC Guideline. 11 12 13 14 15 16 114. The Pharmaceutical Defendants worked together, through Front Groups, to spread their deceptive messages about the risks and benefits of long-term opioid therapy. 115. On information and belief, these Front Groups also assisted the Pharmaceutical Defendants by responding to negative articles, by advocating against regulatory or legislative changes that would limit opioid prescribing in accordance with the scientific evidence, and by 17 18 19 conducting outreach to vulnerable patient populations targeted by the Pharmaceutical Defendants. 116. These Front Groups depended on the Pharmaceutical Defendants for funding 20 and, in some cases, for survival. On information and belief, the Pharmaceutical Defendants 21 exercised control over programs and materials created by these groups by collaborating on, 22 editing, and approving their content, and by funding their dissemination. In doing so, the 23 24 25 Pharmaceutical Defendants made sure that the Front Groups would generate only the messages the Pharmaceutical Defendants wanted to distribute. Despite this, the Front Groups held 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 33 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 37 of 110 1 themselves out as independent and serving the needs of their members – whether patients 2 suffering from pain or doctors treating those patients. 3 117. Defendants Cephalon, Endo, Janssen and Purdue, in particular, utilized many 4 Front Groups, including many of the same ones. Several of the most prominent are described 5 6 below, but there are many others, including the American Pain Society (“APS”), American 7 Geriatrics Society (“AGS”), the Federation of State Medical Boards (“FSMB”), American Chronic 8 Pain Association (“ACPA”), the Center for Practical Bioethics (“CPB”), the U.S. Pain Foundation 9 (“USPF”) and the Pain & Policy Studies Group (“PPSG”).44 10 118. Organizations, including the U.S. Senate Finance Committee, began to investigate 11 12 APF in 2012 to determine the links, financial and otherwise, between the organization and the opioid 13 industry.45 The investigation revealed that APF received 90 percent of its funding from the drug and 14 medical-device industry, and “its guides for patients, journalists and policymakers had played down 15 the risks associated with opioid painkillers while exaggerating the benefits from the drugs.” Within 16 days of the beginning of the Senate Finance Committee’s investigation, APF dissolved “due to 17 18 irreparable economic circumstances.” 119. 19 Another front group for the Pharmaceutical Defendants was the American 20 Academy of Pain Medicine (“AAPM”). With the assistance, prompting, involvement, and funding of 21 the Pharmaceutical Defendants, the AAPM issued purported treatment guidelines and sponsored and 22 23 24 25 26 44 See generally, e.g., Letter from Sen. Ron Wyden, U.S. Senate Comm. on Finance, to Sec. Thomas E. Price, U.S. Dep’t of Health and Human Servs., (May 5, 2015), https://www.finance.senate.gov/imo/media/doc/050517%20Senator%20Wyden%20to%20Secretary%20Price%20re %20FDA%20Opioid%20Prescriber%20Working%20Group.pdf. 45 Charles Ornstein & Tracy Weber, Senate Panel Investigates Drug Companies Ties to Pain Groups, Washington Post (May 8, 2012), available at https://www.washingtonpost.com/national/health-science/senate-panelinvestigates-drug-companies-ties-to-paid-groups/2012/05/08/gIQA2X4qBU_story.html (last accessed Feb. 26, 2017). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 34 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 38 of 110 1 hosted medical education programs essential to the Pharmaceutical Defendants’ deceptive marketing 2 of chronic opioid therapy. 3 120. AAPM received substantial funding from opioid manufacturers. For example, 4 AAPM maintained a corporate relations council, whose members paid $25,000 per year (on top 5 6 of other funding) to participate. The benefits included allowing members to present educational 7 programs at off-site dinner symposia in connection with AAPM’s marquee event – its annual 8 meeting held in Palm Springs, California, or other resort locations. AAPM describes the annual 9 event as an “exclusive venue” for offering education programs to doctors. Membership in the 10 corporate relations council also allows drug company executives and marketing staff to meet with 11 12 AAPM executive committee members in small settings. Defendants Endo, Purdue, and Cephalon 13 were members of the council and presented deceptive programs to doctors who attended this 14 annual event. 15 16 121. Upon information and belief, AAPM is viewed internally by Endo as “industry friendly,” with Endo advisors and speakers among its active members. Endo attended AAPM 17 18 conferences, funded its CMEs, and distributed its publications. The conferences sponsored by 19 AAPM heavily emphasized sessions on opioids – 37 out of roughly 40 at one conference alone. 20 AAPM’s presidents have included top industry-supported KOLs Perry Fine and Lynn Webster. 21 Dr. Webster was even elected president of AAPM while under a DEA investigation. 22 122. The Pharmaceutical Defendants were able to influence AAPM through both 23 24 25 their significant and regular funding and the leadership of pro-opioid KOLs within the organization. 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 35 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 39 of 110 123. 1 In 1996, AAPM and APS jointly issued a consensus statement, “The Use of 2 Opioids for the Treatment of Chronic Pain,” which endorsed opioids to treat chronic pain and 3 claimed that the risk of a patients’ addiction to opioids was low. Dr. Haddox, who co-authored 4 the AAPM/APS statement, was a paid speaker for Purdue at the time. Dr. Portenoy was the sole 5 6 7 consultant. The consensus statement remained on AAPM’s website until 2011, and, upon information and belief, was taken down from AAPM’s website only after a doctor complained.46 8 9 124. AAPM and APS issued their own guidelines in 2009 (“AAPM/APS Guidelines”) and continued to recommend the use of opioids to treat chronic pain.47 Treatment 10 guidelines have been relied upon by doctors, especially the general practitioners and family 11 12 doctors targeted by the Pharmaceutical Defendants. Treatment guidelines not only directly inform 13 doctors’ prescribing practices, but are cited throughout the scientific literature and referenced by 14 third-party payors in determining whether they should cover treatments for specific indications. 15 Pharmaceutical sales representatives employed by Endo, Actavis, and Purdue discussed treatment 16 guidelines with doctors during individual sales visits. 17 125. 18 At least 14 of the 21 panel members, who drafted the AAPM/APS Guidelines, 19 including KOLs Dr. Portenoy and Dr. Perry Fine of the University of Utah, received support from 20 Janssen, Cephalon, Endo, and Purdue. The AAPM/APS Guidelines promote opioids as “safe and 21 effective” for treating chronic pain, despite acknowledging limited evidence, and conclude that 22 the risk of addiction is manageable for patients regardless of past abuse histories.48 One panel 23 24 25 26 46 The Use of Opioids for the Treatment of Chronic Pain: A Consensus Statement From the American Academy of Pain Medicine and the American Pain Society, 13 Clinical J. Pain 6 (1997). 47 Roger Chou et al., Clinical Guidelines for the Use of Chronic Opioid Therapy in Chronic Noncancer Pain, 10 J. Pain 113 (2009). 48 Id. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 36 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 40 of 110 1 member, Dr. Joel Saper, Clinical Professor of Neurology at Michigan State University and 2 founder of the Michigan Headache & Neurological Institute, resigned from the panel because of 3 his concerns that the 2009 Guidelines were influenced by contributions that drug companies, 4 including Pharmaceutical Defendants, made to the sponsoring organizations and committee 5 6 members. These AAPM/APS Guidelines have been a particularly effective channel of deception 7 and have influenced not only treating physicians, but also the body of scientific evidence on 8 opioids; the Guidelines have been cited hundreds of times in academic literature, were 9 disseminated in the Tribes’ communities during the relevant time period, are still available online, 10 and were reprinted in the Journal of Pain. The Pharmaceutical Defendants widely referenced and 11 12 13 14 15 16 promoted the 2009 Guidelines without disclosing the lack of evidence to support them or the Pharmaceutical Defendants financial support to members of the panel. 126. On information and belief, the Pharmaceutical Defendants combined their efforts through the Pain Care Forum (“PCF”), which began in 2004 as an APF project. PCF is comprised of representatives from opioid manufacturers (including Endo, Janssen, and Purdue) 17 18 and various Front Groups, almost all of which received substantial funding from the 19 Pharmaceutical Defendants. Among other projects, PCF worked to ensure that an FDA-mandated 20 education project on opioids was not unacceptably negative and did not require mandatory 21 participation by prescribers. PCF also worked to address a lack of coordination among its 22 members and developed cohesive industry messaging. 23 24 127. On information and belief, through Front Groups and KOLs, the 25 Pharmaceutical Defendants wrote or influenced prescribing guidelines that reflected the 26 messaging the Pharmaceutical Defendants wanted to promote rather than scientific evidence. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 37 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 41 of 110 128. 1 2 3 Defendants collaborated to spread deceptive messages about the risks and benefits of long-term opioid use. 4 C. 5 6 Through these means, and likely others still concealed, the Pharmaceutical The Pharmaceutical Defendants’ statements about the safety of opioids were patently false. The Pharmaceutical Defendants’ misrepresentations reinforced each other and 129. 7 created the dangerously misleading impressions that (a) starting patients on opioids was low-risk 8 9 because most patients would not become addicted, and because those who were at greatest risk 10 of addiction could be readily identified and managed; (b) patients who displayed signs of 11 addiction probably were not addicted and, in any event, could easily be weaned from the drugs; 12 13 (c) the use of higher opioid doses, which many patients need to sustain pain relief as they develop tolerance to the drugs, do not pose special risks; and (d) abuse-deterrent opioids both prevent 14 15 16 abuse and overdose and are inherently less addictive. 130. Some examples of these false claims include: 17 a. Actavis’ predecessor caused a patient education brochure, Managing Chronic 18 Back Pain, to be distributed beginning in 2003 that admitted that opioid addiction 19 is possible, but falsely claimed that it is “less likely if you have never had an 20 21 addiction problem.” Based on Actavis’ acquisition of its predecessor’s marketing 22 materials along with the rights to Kadian, it appears that Actavis continued to use 23 this brochure in 2009 and beyond. 24 b. Cephalon and Purdue sponsored APF’s Treatment Options: A Guide for 25 People Living with Pain (2007), which suggests that addiction is rare and limited 26 27 to extreme cases of unauthorized dose escalations, obtaining duplicative HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 38 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 42 of 110 1 prescriptions, or theft. This publication is available today.49 2 c. Endo sponsored a website, “PainKnowledge,” which, upon information and 3 belief, claimed in 2009 that “[p]eople who take opioids as prescribed usually do 4 not become addicted.” Upon information and belief, another Endo website, 5 PainAction.com, stated “Did you know? Most chronic pain patients do not become 6 7 addicted to the opioid medications that are prescribed for them.” Endo also 8 distributed an “Informed Consent” document on PainAction.com that 9 misleadingly suggested that only people who “have problems with substance 10 abuse and addiction” are likely to become addicted to opioid medications. 11 d. Upon information and belief, Endo distributed a pamphlet with the Endo logo 12 13 entitled Living with Someone with Chronic Pain, which stated that “[m]ost health 14 care providers who treat people with pain agree that most people do not develop 15 an addiction problem.” 16 e. Jannsen reviewed and distributed a patient education guide entitled Finding 17 Relief: Pain Management for Older Adults (2009), which described as “myth” the 18 19 claim that opioids are addictive, and asserted as fact that “[m]any studies show 20 that opioids are rarely addictive when used properly for the management of chronic 21 pain.” 22 f. Janssen currently runs a website, prescriberesponsibly.com (last updated July 23 2, 2015) which claims that concerns about opioid addiction are “overestimated.”50 24 25 26 49 APF, Treatment Options: A Guide for People Living with Pain (2007), available at https://assets.documentcloud.org/documents/277605/apf-treatmentoptions.pdf (last accessed Feb. 22, 2018). 50 Available at http://www.prescriberesponsibly.com/articles/opioid-pain-management (last accessed Feb. 22, 2018). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 39 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 43 of 110 1 g. Purdue sponsored APF’s A Policymaker’s Guide to Understanding Pain & Its 2 Management – which claims that less than 1% of children prescribed opioids will 3 become addicted and that pain is undertreated due to “misconceptions about opioid 4 addiction[].” This publication is still available online.51 5 h. Consistent with the Pharmaceutical Defendants’ published marketing materials, 6 7 upon information and belief, detailers for the Pharmaceutical Defendants in 8 Washington have minimized or omitted and continue to minimize or omit any 9 discussion with doctors or their medical staff in Washington about the risk of 10 addiction; misrepresented the potential for abuse of opioids with purportedly abuse11 deterrent formulations; and routinely did not correct the misrepresentations noted 12 above. 13 14 15 16 131. The Pharmaceutical Defendants engaged in this campaign of misinformation in an intentional effort to deceive doctors and patients and thereby increase the use of their opioid products. 17 19 debunked by the FDA and CDC, and are contrary to longstanding scientific evidence. 20 21 22 The Pharmaceutical Defendants’ misrepresentations have been conclusively 132. 18 As noted in the 2016 CDC Guideline endorsed by the FDA, there is “extensive 133. evidence” of the “possible harms of opioids (including opioid use disorder [an alternative term for opioid addiction]).”52 The Guideline points out that “[o]pioid pain medication use presents 23 24 25 51 APF, A Policymaker's Guide to Understanding Pain & Its Management, at 6 (Oct. 2011), available at http://s3.documentcloud.org/documents/277603/apf-policymakers-guide.pdf (last accessed Feb. 22, 2018). 52 2016 CDC Guideline, supra note 31, at 15. 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 40 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 44 of 110 1 serious risks, including . . . opioid use disorder”53 and that “continuing opioid therapy for [three] 2 3 months substantially increases risk for opioid use disorder.”54 3 The FDA further exposed the falsity of Defendants’ claims about the low risk 134. 4 of addiction when it announced changes to the labels for ER/LA opioids in 2013 and for IR 5 6 opioids in 2016. In its announcements, the FDA found that “most opioid drugs have ‘high 7 potential for abuse’” and that opioids “are associated with a substantial risk of misuse, abuse, 8 NOWS [neonatal opioid withdrawal syndrome], addiction, overdose and death.” (Emphasis 9 added).55 According to the FDA, because of the “known serious risks” associated with long-term 10 opioid use, including “risks of addiction, abuse, and misuse, even at recommended doses, and 11 12 because of the greater risks of overdose and death,” opioids should be used only “in patients for 13 whom alternative treatment options” like non-opioid drugs have failed. (Emphasis added). The 14 FDA further acknowledged that the risk is not limited to patients who seek drugs illicitly; 15 addiction “can occur in patients appropriately prescribed [opioids].” 16 135. The Pharmaceutical Defendants have been, and are, aware that their 17 18 misrepresentations about opioids are false. 20 The NY AG, in a 2016 settlement agreement with Endo, found that opioid “use 136. 19 disorders appear to be highly prevalent in chronic pain patients treated with opioids, with up to 21 53 22 23 24 25 26 Id. at 2. Id. at 25. 55 Letter from Janet Woodcock, M.D., Dir., Ctr. For Drug Evaluation and Research, U.S. Food & Drug Admin., U.S. Dep’t of Health and Human Servs., to Andrew Koldny, M.D., President, Physicians for Responsible Opioid Prescribing (Sept. 10, 2013), available at https://www.regulations.gov/contentStreamer?documentId=FDA-2012-P0818-0793&attachmentNumber=1&contentType=pdf (last accessed Feb. 27, 2018); Letter from Janet Woodcock, M.D., Dir., Ctr. For Drug Evaluation and Research, U.S. Food & Drug Admin., U.S. Dep’t of Health and Human Servs., to Peter R. Mathers & Jennifer A. Davidson, Kleinfeld, Kaplan & Becker, LLP (Mar. 22, 2016), available at https://www.regulations.gov/contentStreamer?documentId=FDA-2014-P-02050006&attachmentNumber=1&contentType=pdf (last accessed Feb. 27, 2018). 54 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 41 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 45 of 110 1 40% of chronic pain patients treated in specialty and primary care outpatient centers meeting the 2 clinical criteria for an opioid use disorder.”56 Endo had claimed on its www.opana.com website 3 that “[m]ost healthcare providers who treat patients with pain agree that patients treated with 4 prolonged opioid medicines usually do not become addicted,”57 but the NY AG found that Endo 5 6 had no evidence for that statement. Consistent with this, Endo agreed not to “make statements that 7 . . . opioids generally are non-addictive” or “that most patients who take opioids do not become 8 addicted”58 in New York. 9 137. The Pharmaceutical Defendants falsely instructed doctors and patients that the 10 signs of addiction are actually signs of undertreated pain and should be treated by prescribing 11 12 more opioids. The Pharmaceutical Defendants called this phenomenon “pseudoaddiction” – a 13 term coined by Dr. David Haddox, who went to work for Purdue, and popularized by Dr. Portenoy 14 – and falsely claimed that pseudoaddiction is substantiated by scientific evidence. Some 15 illustrative examples of these deceptive claims are described below: 16 a. Cephalon and Purdue sponsored Responsible Opioid Prescribing (2007), 17 which taught that behaviors such as “requesting drugs by name”, “demanding or 18 19 manipulative behavior,” seeing more than one doctor to obtain opioids, and 20 hoarding, are all signs of pseudoaddiction, rather than true addiction. The 2012 21 edition of Responsible Opioid Prescribing remains for sale online.59 22 b. On information and belief, Janssen sponsored, funded, and edited the Let’s 23 24 25 26 56 Assurance of Discontinuance, In re Endo Health Solutions Inc. and Endo Pharm. Inc. (Assurance No. 15-228), at 13, available at https://ag.ny.gov/pdfs/Endo_AOD_030116-Fully_Executed.pdf (last accessed December 19, 2017). 57 Id. at 6. 58 Id. at 15. 59 See Scott M. Fishman, M.D., Responsible Opioid Prescribing: A Clinician’s Guide (2d ed. 2012). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 42 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 46 of 110 1 Talk Pain website, which in 2009 stated: “pseudoaddiction . . . refers to patient 2 behaviors that may occur when pain is under-treated . . . . Pseudoaddiction is 3 4 different from true addiction because such behaviors can be resolved with effective pain management.” 5 6 c. Endo sponsored a National Initiative on Pain Control (“NIPC”) CME program 7 in 2009 entitled “Chronic Opioid Therapy: Understanding Risk While Maximizing 8 Analgesia,” which, upon information and belief, promoted pseudoaddiction by 9 teaching that a patient’s aberrant behavior was the result of untreated pain. Endo 10 appears to have substantially controlled NIPC by funding NIPC projects; 11 12 developing, specifying, and reviewing content; and distributing NIPC materials. 13 d. Purdue published a pamphlet in 2011 entitled Providing Relief, Preventing 14 Abuse, which, upon information and belief, described pseudoaddiction as a 15 concept that “emerged in the literature” to describe the inaccurate interpretation of 16 [drug- seeking behaviors] in patients who have pain that has not been effectively 17 18 treated.” 19 e. Upon information and belief, Purdue sponsored a CME program titled “Path 20 of the Patient, Managing Chronic Pain in Younger Adults at Risk for Abuse”. In a 21 role play, a chronic pain patient with a history of drug abuse tells his doctor that 22 he is taking twice as many hydrocodone pills as directed. The narrator notes that 23 24 because of pseudoaddiction, the doctor should not assume the patient is addicted 25 even if he persistently asks for a specific drug, seems desperate, hoards medicine, 26 or “overindulges in unapproved escalating doses.” The doctor treats this patient by 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 43 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 47 of 110 prescribing a high-dose, long acting opioid. 1 2 3 4 138. Pseudoaddiction is fictional. The 2016 CDC Guideline rejects the concept of pseudoaddiction. The Guideline nowhere recommends that opioid dosages be increased if a patient is not experiencing pain relief. To the contrary, the Guideline explains that “[p]atients who 5 6 do not experience clinically meaningful pain relief early in treatment . . . are unlikely to experience 7 pain relief with longer-term use,”60 and that physicians should “reassess[] pain and function 8 within 1 month” in order to decide whether to “minimize risks of long-term opioid use by 9 discontinuing opioids” because the patient is “not receiving a clear benefit.”61 10 139. In connection with its settlement with the NY AG, Endo was forced to admit 11 12 that the concept of pseudoaddiction was a sham. In finding that “[t]he 'pseudoaddiction' concept 13 has never been empirically validated and in fact has been abandoned by some of its proponents,” 14 the NY AG, in its 2016 settlement with Endo, reported that despite the fact that Endo trained its 15 sales representative to use the concept of pseudoaddiction, “Endo’s Vice President for 16 Pharmacovigilance and Risk Management testified to [the NY AG] that he was not aware of any 17 18 19 research validating the ‘pseudoaddiction’ concept” and acknowledged the difficulty in distinguishing “between addiction and ‘pseudoaddiction.’”62 20 21 22 140. The Pharmaceutical Defendants falsely instructed doctors and patients that addiction risk screening tools, patient contracts, urine drug screens, and similar strategies allow them to reliably identify and safely prescribe opioids to patients predisposed to addiction. These 23 24 25 misrepresentations were especially insidious because the Pharmaceutical Defendants aimed them 60 2016 CDC Guideline, supra note 31, at 13. Id. at 25. 62 See supra note 56, at 7. 61 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 44 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 48 of 110 1 at general practitioners and family doctors who lack the time and expertise to closely manage 2 higher-risk patients on opioids. The Pharmaceutical Defendants’ misrepresentations made these 3 doctors feel more comfortable prescribing opioids to their patients, and patients more comfortable 4 starting on opioid therapy for chronic pain. Some illustrative examples of these deceptive claims 5 6 are described below: 7 a. On information and belief, Endo paid for a 2007 supplement in the Journal of 8 Family Practice written by a doctor who became a member of Endo’s speakers 9 bureau in 2010. The supplement, entitled Pain Management Dilemmas in Primary 10 Care: Use of Opioids, emphasized the effectiveness of screening tools, claiming 11 12 that patients at high risk of addiction could safely receive chronic opioid therapy 13 using a “maximally structured approach” involving toxicology screens and pill 14 counts. 15 b. On information and belief, Purdue sponsored a November 2011 webinar, 16 Managing Patient’s Opioid Use: Balancing the Need and Risk, which claimed that 17 18 screening tools, urine tests, and patient agreements prevent “overuse of 19 prescriptions” and “overdose deaths.” 20 c. On information and belief, as recently as 2015, Purdue has represented in 21 scientific conferences that “bad apple” patients – and not opioids – are the source 22 of the addiction crisis and that once those “bad apples” are identified, doctors can 23 24 safely prescribe opioids without causing addiction. 25 d. On information and belief, detailers for the Pharmaceutical Defendants have 26 touted and continue to tout to doctors in Washington the reliability and 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 45 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 49 of 110 1 effectiveness of screening or monitoring patients as a tool for managing opioid 2 abuse and addiction. 3 141. Once again, the 2016 CDC Guideline confirms that these statements were 4 false, misleading, and unsupported at the time they were made by the Pharmaceutical Defendants. 5 6 The Guideline notes that there are no studies assessing the effectiveness of risk mitigation 7 strategies – such as screening tools, patient contracts, urine drug testing, or pill counts widely 8 believed by doctors to detect and deter abuse – “for improving outcomes related to overdose, 9 addiction, abuse, or misuse.”63 As a result, the Guideline recognizes that available risk screening 10 tools “show insufficient accuracy for classification of patients as at low or high risk for [opioid] 11 12 13 abuse or misuse” and counsels that doctors “should not overestimate the ability of these tools to rule out risks from long-term opioid therapy.”64 (Emphasis added). 14 15 16 142. To underplay the risk and impact of addiction and make doctors feel more comfortable starting patients on opioids, the Pharmaceutical Defendants falsely claimed that opioid dependence can easily be addressed by tapering and that opioid withdrawal is not a 17 18 problem, and failed to disclose the increased difficulty of stopping opioids after long-term use 143. 19 For example, on information and belief, a 2011 non-credit educational program 20 sponsored by Endo, entitled Persistent Pain in the Older Adult, claimed that withdrawal symptoms 21 can be avoided by tapering a patient’s opioid dose by 10%-20% for 10 days. 22 Purdue sponsored APF’s A Policymaker’s Guide to Understanding Pain & Its 144. 23 24 25 Management, which claimed that “[s]ymptoms of physical dependence can often be ameliorated 63 64 26 2016 CDC Guideline, supra note 31, at 11. Id. at 28. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 46 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 50 of 110 1 by gradually decreasing the dose of medication during discontinuation” without mentioning any 2 hardships that might occur.65 3 4 145. The Pharmaceutical Defendants deceptively minimized the significant symptoms of opioid withdrawal – which, as explained in the 2016 CDC Guideline, include drug 5 6 craving, anxiety, insomnia, abdominal pain, vomiting, diarrhea, tremor, and tachycardia (rapid 7 heartbeat) – and grossly understated the difficulty of tapering, particularly after long-term opioid 8 use. 9 Contrary to the Pharmaceutical Defendants’ representations, the 2016 CDC 146. 10 Guideline recognizes that the duration of opioid use and the dosage of opioids prescribed should 11 12 be “limit[ed]” to “minimize the need to taper opioids to prevent distressing or unpleasant 13 withdrawal symptoms,” because “physical dependence on opioids is an expected physiologic 14 response in patients exposed to opioids for more than a few days.” (emphasis added). The 15 Guideline further states that “more than a few days of exposure to opioids significantly increases 16 hazards” and “each day of unnecessary opioid use increases likelihood of physical dependence 17 18 without adding benefit."66 147. 19 The Pharmaceutical Defendants falsely claimed that doctors and patients could 20 increase opioid dosages indefinitely without added risk and failed to disclose the greater risks to 21 patients at higher dosages. The ability to escalate dosages was critical to the Pharmaceutical 22 Defendants’ efforts to market opioids for long-term use to treat chronic pain because, absent this 23 24 25 misrepresentation, doctors would have abandoned treatment when patients built up tolerance and 65 66 26 APF, Policymaker's Guide, supra note 51, at 32. 2016 CDC Guideline, supra note 31, at 24. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 47 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 51 of 110 1 lower dosages did not provide pain relief. Some illustrative examples of these deceptive claims 2 are described below: 3 a. On information and belief, Actavis’s predecessor created a patient brochure 4 for Kadian in 2007 that stated, “Over time, your body may become tolerant of your 5 current dose. You may require a dose adjustment to get the right amount of pain 6 7 relief. This is not addiction.” 8 b. Cephalon and Purdue sponsored APF’s Treatment Options: A Guide for 9 People Living with Pain (2007), which claims that some patients “need” a larger 10 dose of an opioid, regardless of the dose currently prescribed. The guide stated that 11 opioids have “no ceiling dose” and are therefore the most appropriate treatment 12 13 for severe pain. This guide is still available online.67 14 c. Endo sponsored a website, “PainKnowledge,” which, upon information and 15 belief, claimed in 2009 that opioid dosages may be increased until “you are on the 16 right dose of medication for your pain.” 17 d. Endo distributed a pamphlet edited by a KOL entitled Understanding Your 18 19 Pain: Taking Oral Opioid Analgesics (2004 Endo Pharmaceuticals PM-0120). In 20 Q&A format, it asked “If I take the opioid now, will it work later when I really 21 need it?” The response is, “The dose can be increased. . . .You won’t ‘run out’ of 22 pain relief.”68 23 e. Janssen, on information and belief, sponsored a patient education guide 24 25 67 APF, Treatment Options, supra note 49, at 12. Margo McCaffery & Chris Pasero, Endo Pharm., Understanding Your Pain: Taking Oral Opioid Analgesics (Russell K. Portenoy, M.D., ed., 2004). 68 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 48 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 52 of 110 1 entitled Finding Relief: Pain Management for Older Adults (2009), which was 2 distributed by its sales force. This guide listed dosage limitations as 3 “disadvantages” of other pain medicines but omitted any discussion of risks of 4 increased opioid dosages. 5 f. On information and belief, Purdue’s In the Face of Pain website promoted the 6 7 notion that if a patient’s doctor does not prescribe what, in the patient’s view, is a 8 sufficient dosage of opioids, he or she should find another doctor who will. 9 g. Purdue sponsored APF’s A Policymaker’s Guide to Understanding Pain & Its 10 Management, which taught that dosage escalations are “sometimes necessary,” 11 even unlimited ones, but did not disclose the risks from high opioid dosages. This 12 13 publication is still available online.69 14 h. In 2007, Purdue sponsored a CME entitled “Overview of Management 15 Options” that was available for CME credit and available until at least 2012. The 16 CME was edited by a KOL and taught that NSAIDs and other drugs, but not 17 opioids, are unsafe at high dosages. 18 19 i. Seeking to overturn the criminal conviction of a doctor for illegally prescribing 20 opioids, the Front Group APF and others argued to the United States Fourth Circuit 21 Court of Appeals that “there is no ‘ceiling dose’” for opioids.70 22 j. On information and belief, Purdue’s detailers have told doctors in Washington 23 that they should increase the dose of OxyContin, rather than the frequency of use, 24 25 69 APF, Policymaker's Guide, supra note 51, at 32. Brief of the American Pain Foundation (APF), the National Pain Foundation, and the National Foundation for the Treatment of Pain in Support of Appellant and Reversal of the Conviction, United States v. Hurowitz, No. 05-4474, at 9 (4th Cir. Sept. 8, 2005). 70 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 49 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 53 of 110 to address early failure. 1 2 3 4 148. These claims conflict with the scientific evidence, as confirmed by the FDA and CDC. As the CDC explains in its 2016 Guideline, the “[b]enefits of high-dose opioids for chronic pain are not established” while the “risks for serious harms related to opioid therapy 5 6 increase at higher opioid dosage.” More specifically, the CDC explains that “there is now an 7 established body of scientific evidence showing that overdose risk is increased at higher opioid 8 dosages.” The CDC also states that there are “increased risks for opioid use disorder, respiratory 9 depression, and death at higher dosages.”71 10 149. The Pharmaceutical Defendants’ deceptive marketing of the so-called abuse- 11 12 13 deterrent properties of some of their opioids has created false impressions that these opioids can prevent and curb addiction and abuse. 14 15 16 150. These abuse deterrent formulations (AD opioids) purportedly are harder to crush, chew, or grind; become gelatinous when combined with a liquid, making them harder to inject; or contain a counteragent such as naloxone that is activated if the tablets are tampered with. 17 18 Despite this, AD opioids can be defeated – often quickly and easily – by those determined to do 19 so. The 2016 CDC Guideline state that “[n]o studies” support the notion that “abuse-deterrent 20 technologies [are] a risk mitigation strategy for deterring or preventing abuse,”72 noting that the 21 technologies—even when they work—do not prevent opioid abuse through oral intake, the most 22 common route of opioid abuse, and can still be abused by non-oral routes. Moreover, they do not 23 24 25 reduce the rate of misuse and abuse by patients who become addicted after using opioids long71 72 26 2016 CDC Guideline, supra note 31, at 21-23. 2016 CDC Guideline, supra note 31, at 22. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 50 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 54 of 110 1 term as prescribed or who escalate their use by taking more pills or higher doses. Tom Frieden, 2 the Director of the CDC, has further reported that his staff could not find “any evidence showing 3 the updated opioids [ADFs] actually reduce rates of addiction, overdoses, or death.”73 4 151. Despite this lack of evidence, the Pharmaceutical Defendants have made and 5 6 7 continue to make misleading claims about the ability of their so-called abuse- deterrent opioid formulations to prevent or reduce abuse and addiction and the safety of these formulations. 8 9 152. For example, Endo has marketed Opana ER74 as tamper- or crush-resistant and less prone to misuse and abuse even though: (1) on information and belief, the FDA warned in a 10 2013 letter that there was no evidence that Opana ER would provide a reduction in oral, intranasal 11 12 or intravenous abuse; and (2) Endo’s own studies, which it failed to disclose, showed that Opana 13 ER could still be ground and chewed. Nonetheless, Endo’s advertisements for Opana ER falsely 14 claimed that it was designed to be crush resistant, in a way that suggested it was more difficult to 15 abuse. And on information and belief, detailers for Endo have informed doctors that Opana ER is 16 harder to abuse. 17 153. 18 In its 2016 settlement with the NY AG, Endo agreed not to make statements 19 in New York that Opana ER was “designed to be, or is crush resistant.” The NY AG found those 20 statements false and misleading because there was no difference in the ability to extract the 21 narcotic from Opana ER. The NY AG also found that Endo failed to disclose its own knowledge 22 23 24 25 26 27 73 Matthew Perrone et al., Drugmakers push profitable, but unproven, opioid solution, Center for Public Integrity (Dec. 15, 2016), available at https://www.publicintegrity.org/2016/12/15/20544/drugmakers-push-profitableunproven-opioid-solution (last accessed Feb. 27, 2018). 74 Because Opana ER could be “readily prepared for injection” and was linked to outbreaks of HIV and a serious blood disease, in May 2017, an FDA advisory committee recommended that Opana ER be withdrawn from the market. The FDA adopted this recommendation on June 8, 2017 and requested that Endo withdraw Opana ER from the market. Press Release, “FDA requests removal of Opana ER for risks related to abuse,” June 8, 2017, available at https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm562401.htm (last accessed Feb. 27, 2018). HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 51 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 55 of 110 1 of the crushability of redesigned Opana ER in its marketing to formulary committees and 2 pharmacy benefit managers. 3 4 154. Likewise, Purdue has engaged and continues to engage in deceptive marketing of its AD opioids – i.e., reformulated Oxycontin and Hysingla. Before April 2013, Purdue did not 5 6 market its opioids based on their abuse deterrent properties. However, beginning in 2013 and 7 continuing today, detailers from Purdue regularly use the so-called abuse deterrent properties of 8 Purdue’s opioid products as a primary selling point to differentiate those products from their 9 10 competitors. Specifically, on information and belief, these detailers: (1) falsely claim that Purdue’s AD opioids prevent tampering and cannot be crushed or snorted; (2) falsely claim that 11 12 Purdue’s AD opioids prevent or reduce opioid misuse, abuse, and diversion, are less likely to 13 yield a euphoric high, and are disfavored by opioid abusers; (3) falsely claim Purdue’s AD opioids 14 are “safer” than other opioids; and (4) fail to disclose that Purdue’s AD opioids do not impact oral 15 abuse or misuse and that its abuse deterrent properties can be defeated. 16 155. These statements and omissions by Purdue are false and misleading. Purdue 17 18 knew and should have known that reformulated OxyContin is not better at tamper resistance than 19 the original OxyContin and is still regularly tampered with and abused. A 2015 study also shows 20 that many opioid addicts are abusing Purdue’s AD opioids through oral intake or by defeating the 21 abuse deterrent mechanism. Indeed, one-third of the patients in the study defeated the abuse 22 deterrent mechanism and were able to continue inhaling or injecting the drug. And to the extent 23 24 that the abuse of Purdue’s AD opioids was reduced, those addicts simply shifted to other drugs 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 52 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 56 of 110 1 such as heroin.75 Despite this, J. David Haddox, the Vice President of Health Policy for Purdue, 2 falsely claimed in 2016 that the evidence does not show that Purdue’s AD opioids are being 3 abused in large numbers.76 4 156. The development, marketing, and sale of AD opioids is a continuation of the 5 6 Pharmaceutical Defendants’ strategy to use misinformation to drive profit. The Pharmaceutical 7 Defendants’ claims that AD opioids are safe falsely assuage doctors’ concerns about the toll 8 caused by the explosion in opioid abuse, causing doctors to prescribe more AD opioids, which 9 are far more expensive than other opioid products even though they provide little or no additional 10 benefit. 11 D. 12 13 The Pharmaceutical Defendants misrepresented the benefits of chronic opioid therapy. 157. To convince doctors and patients that opioids should be used to treat chronic 14 15 16 pain, the Pharmaceutical Defendants also had to persuade them that there was a significant upside to long-term opioid use. 17 18 19 158. The 2016 CDC Guideline makes clear that there is “insufficient evidence to determine long-term benefits of opioid therapy for chronic pain.”77 In fact, the CDC found that “[n]o evidence shows a long-term benefit of opioids in pain and function versus no opioids for 20 21 22 23 24 25 chronic pain with outcomes examined at least 1 year later (with most placebo-controlled 75 Cicero, Theodore J., and Matthew S. Ellis, Abuse-deterrent formulations and the Prescription Opioid Abuse Epidemic in the United States: Lessons Learned From Oxycontin (2015) 72.5 JAMA PSYCHIATRY 424-430. 76 See Harrison Jacobs, There is a big problem with the government’s plan to stop the drug-overdose epidemic, Business Insider, Mar. 14, 2016, available at http://www.businessinsider.com/robert-califf-abuse-deterrent-drugshave-a-big-flaw-2016-3 (last accessed Feb. 27, 2018). 77 2016 CDC Guideline, supra note 31, at 19. 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 53 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 57 of 110 1 randomized trials ≤ 6 weeks in duration)”78 and that other treatments were more or equally 2 beneficial and less harmful than long-term opioid use. 3 4 159. The FDA, too, has recognized the lack of evidence to support long-term opioid use. In 2013, the FDA stated that it was “not aware of adequate and well-controlled studies of 5 6 opioid use longer than 12 weeks.”79 160. 7 8 9 Despite this, the Pharmaceutical Defendants falsely and misleadingly touted the benefits of long-term opioid use and falsely and misleadingly suggested that these benefits were supported by scientific evidence. Not only have the Pharmaceutical Defendants failed to 10 correct these false and misleading claims, they continue to make them today. 11 161. 12 For example, the Pharmaceutical Defendants falsely claimed that long-term 13 opioid use improved patients’ function and quality of life. Some illustrative examples of these 14 deceptive claims are described below: 15 a. On information and belief, Actavis distributed an advertisement that claimed 16 that the use of Kadian to treat chronic pain would allow patients to return to work, 17 relieve “stress on your body and your mental health,” and help patients enjoy their 18 19 lives. 20 b. Endo distributed advertisements that claimed that the use of Opana ER for 21 chronic pain would allow patients to perform demanding tasks like construction 22 work or work as a chef and portrayed seemingly healthy, unimpaired subjects. 23 c. On information and belief, Janssen sponsored and edited a patient education 24 25 78 79 26 Id. at 15. Letter from Janet Woodcock to Andrew Koldny, supra note 55, at 9. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 54 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 58 of 110 1 guide entitled Finding Relief: Pain Management for Older Adults (2009) – which 2 states as “a fact” that “opioids may make it easier for people to live normally.” The 3 guide lists expected functional improvements from opioid use, including sleeping 4 through the night, returning to work, recreation, sex, walking, and climbing stairs 5 and states that “[u]sed properly, opioid medications can make it possible for people 6 7 with chronic pain to ‘return to normal.’” 8 d. Responsible Opioid Prescribing (2007), sponsored and distributed by Endo 9 and Purdue, taught that relief of pain by opioids, by itself, improved patients’ 10 function. The book remains for sale online. 11 e. APF’s Treatment Options: A Guide for People Living with Pain, sponsored by 12 13 Cephalon and Purdue, counseled patients that opioids “give [pain patients] a 14 quality of life we deserve.” This publication is still available online.80 15 f. On information and belief, Endo’s NIPC website painknowledge.com claimed 16 that with opioids, “your level of function should improve; you may find you are 17 now able to participate in activities of daily living, such as work and hobbies, that 18 19 you were not able to enjoy when your pain was worse.” Elsewhere, the website 20 touted improved quality of life (as well as “improved function”) as benefits of 21 opioid therapy. 22 g. On information and belief, Janssen sponsored, funded, and edited a website, 23 Let’s Talk Pain, in 2009, which featured an interview edited by Janssen claiming 24 that opioids allowed a patient to “continue to function.” 25 26 80 APF, Treatment Options, supra note 49 at 15. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 55 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 59 of 110 1 h. Purdue sponsored the development and distribution of APF’s A Policymaker’s 2 Guide to Understanding Pain & Its Management, which claimed that “multiple 3 clinical studies” have shown that opioids are effective in improving daily function, 4 psychological health, and health-related quality of life for chronic pain patients.81 5 The Policymaker’s Guide is still available online today. 6 7 i. In a 2015 video on Forbes.com82 discussing the introduction of Hysingla ER, 8 Purdue’s Vice President of Health Policy, J. David Haddox, talked about the 9 importance of opioids, including Purdue’s opioids, to chronic pain patients’ 10 “quality of life,” and complained that CDC statistics do not take into account that 11 patients could be driven to suicide without pain relief. 12 162. 13 The above claims find no support in the scientific literature. The FDA and 14 other federal agencies have made this clear for years. Most recently, the 2016 CDC Guideline 15 approved by the FDA concluded that “there is no good evidence that opioids improve pain or 16 function with long-term use, and . . . complete relief of pain is unlikely.”83 (Emphasis added). The 17 18 CDC reinforced this conclusion throughout its 2016 Guideline: 19 a. “No evidence shows a long-term benefit of opioids in pain and function versus 20 no opioids for chronic pain with outcomes examined at least 1 year later . . . .”84 21 b. “Although opioids can reduce pain during short-term use, the clinical evidence 22 23 24 25 81 APF, Policymaker's Guide, supra note 51, at 29. Matthew Harper, Why Supposedly Abuse-Proof Pills Won’t Stop Opioid Overdose Deaths, Forbes (Apr. 17, 2015), available at https://www.forbes.com/sites/matthewherper/2015/04/17/why-supposedly-abuse-proof-pills-pillwont-stop-opioid-overdose-deaths/#6a4e41f06ce1 (last accessed Feb. 27, 2018). 83 2016 CDC Guideline, supra note 31, at 20. 84 Id. at 15. 82 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 56 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 60 of 110 1 review found insufficient evidence to determine whether pain relief is sustained 2 and whether function or quality of life improves with long-term opioid therapy.”85 3 c. “[E]vidence is limited or insufficient for improved pain or function with long- 4 term use of opioids for several chronic pain conditions for which opioids are 5 commonly prescribed, such as low back pain, headache, and fibromyalgia.”86 6 163. 7 8 9 The CDC also noted that the risks of addiction and death “can cause distress and inability to fulfill major role obligations.”87 As a matter of common sense (and medical evidence), drugs that can kill patients or commit them to a life of addiction or recovery do not 10 improve their function and quality of life. 11 164. 12 The 2016 CDC Guideline was not the first time a federal agency repudiated 13 the Pharmaceutical Defendants’ claim that opioids improved function and quality of life. In 2010, 14 the FDA warned Actavis that “[w]e are not aware of substantial evidence or substantial clinical 15 experience demonstrating that the magnitude of the effect of the drug [Kadian] has in alleviating 16 pain, taken together with any drug-related side effects patients may experience … results in any 17 18 overall positive impact on a patient’s work, physical and mental functioning, daily activities, or 19 enjoyment of life.”88And upon information and belief, in 2008 the FDA sent a warning letter to 20 an opioid manufacturer, making it publicly clear “that [the claim that] patients who are treated 21 with the drug experience an improvement in their overall function, social , function, and ability 22 to perform daily activities . . . has not been demonstrated by substantial evidence or substantial 23 24 85 Id. at 18. Id. at 18-19. 87 Id. at 20. 88 Warning Letter from Thomas Abrams, Dir., FDA Div. of Mktg., Adver., & Commc’ns, to Doug Boothe, CEO, Actavis Elizabeth LLC, Feb. 18, 2010, at 5, available at https://www.fdanews.com/ext/resources/files/archives/a/ActavisElizabethLLC.pdf (last accessed Feb. 27, 2018). 86 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 57 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 61 of 110 1 clinical experience.” 2 3 165. The Pharmaceutical Defendants also falsely and misleadingly emphasized or exaggerated the risks of competing products like NSAIDs, so that doctors and patients would look 4 to opioids first for the treatment of chronic pain. For example, the Pharmaceutical Defendants 5 6 frequently contrasted the lack of a ceiling dosage for opioids with the risks of a competing class 7 of analgesics: over-the-counter nonsteroidal anti-inflammatories (or NSAIDs). The 8 Pharmaceutical Defendants deceptively describe the risks from NSAIDs while failing to disclose 9 the risks from opioids.51 The Pharmaceutical Defendants have overstated the number of deaths from 10 NSAIDS and have prominently featured the risks of NSAIDS, while minimizing or failing to 11 12 mention the serious risks of opioids. Once again, these misrepresentations by the Pharmaceutical 13 Defendants contravene pronouncements by and guidance from the FDA and CDC based on the 14 scientific evidence. For example, the 2016 CDC Guideline states that NSAIDs, not opioids, should 15 be the first-line treatment for chronic pain, particularly arthritis and lower back pain. 16 166. For example, Purdue misleadingly promoted OxyContin as being unique among 17 18 opioids in providing 12 continuous hours of pain relief with one dose. OxyContin does not last 19 for 12 hours – a fact that Purdue has known at all times relevant to this action. Upon information 20 and belief, Purdue’s own research shows that OxyContin wears off in under six hours in one 21 quarter of patients and in under 10 hours in more than half. This is because OxyContin tablets 22 release approximately 40% of their active medicine immediately, after which release tapers. This 23 24 triggers a powerful initial response, but provides little or no pain relief at the end of the dosing 25 period, when less medicine is released. This phenomenon is known as “end of dose” failure, and 26 the FDA found in 2008 that a “substantial proportion” of chronic pain patients taking OxyContin 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 58 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 62 of 110 1 experience it. This not only renders Purdue’s promise of 12 hours of relief false and deceptive, it 2 also makes OxyContin more dangerous because the declining pain relief patients experience 3 toward the end of each dosing period drives them to take more OxyContin before the next dosing 4 period begins, quickly increasing the amount of drug they are taking and spurring growing 5 6 dependence. 167. 7 8 9 Cephalon deceptively marketed its opioids Actiq and Fentora for chronic pain even though the FDA has expressly limited their use to the treatment of cancer pain in opioid tolerant individuals. Both Actiq and Fentora are extremely powerful fentanyl-based IR opioids. 10 Neither is approved for, or has been shown to be safe or effective for, chronic pain. Indeed, the 11 12 13 FDA expressly prohibited Cephalon from marketing Actiq for anything but cancer pain, and refused to approve Fentora for the treatment of chronic pain because of the potential harm. 14 15 16 168. Despite this, on information and belief, Cephalon conducted and continues to conduct a well-funded campaign to promote Actiq and Fentora for chronic pain and other noncancer conditions for which it was not approved, appropriate or safe.89 As part of this campaign, 17 18 Cephalon used CMEs, speaker programs, KOLs, journal supplements, and detailing by its sales 19 representatives to give doctors the false impression that Actiq and Fentora are safe and effective 20 for treating non-cancer pain. 21 22 169. Cephalon’s deceptive marketing gave doctors and patients the false impression that Actiq and Fentora were not only safe and effective for treating chronic pain, but were also 23 24 25 26 approved by the FDA for such uses. For example: See Press Release, U.S. Dep’t of Justice, Biopharmaceutical Company, Cephalon, to Pay $425 million & Enter Plea To Resolve Allegations of Off-Label Marketing (Sept. 29, 2008), https://www.justice.gov/archive/opa/pr/2008/September/08-civ-860.html (last accessed Feb. 27, 2018). 89 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 59 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 63 of 110 1 a. Cephalon paid to have a CME it sponsored, Opioid-Based Management of 2 Persistent and Breakthrough Pain, published in a supplement of Pain Medicine 3 News in 2009. The CME instructed doctors that “[c]linically, broad classification 4 of pain syndromes as either cancer- or non-cancer- related has limited utility” and 5 6 recommended Actiq and Fentora for patients with chronic pain. 7 b. Upon information and belief, Cephalon’s sales representatives set up hundreds 8 of speaker programs for doctors, including many non- oncologists, which 9 promoted Actiq and Fentora for the treatment of non-cancer pain. 10 c. In December 2011, Cephalon widely disseminated a journal supplement 11 12 entitled “Special Report: An Integrated Risk Evaluation and Mitigation Strategy 13 for Fentanyl Buccal Tablet (FENTORA) and Oral Transmucosal Fentanyl Citrate 14 (ACTIQ)” to Anesthesiology News, Clinical Oncology News, and Pain Medicine 15 News – three publications that are sent to thousands of anesthesiologists and other 16 medical professionals. The Special Report openly promotes Fentora for “multiple 17 18 19 causes of pain” – and not just cancer pain. 170. The Pharmaceutical Defendants, both individually and collectively, made, 20 promoted, and profited from their misrepresentations about the risks and benefits of opioids for 21 chronic pain even though they knew that their misrepresentations were false and misleading. The 22 history of opioids, as well as research and clinical experience over the last 20 years, established 23 24 that opioids were highly addictive and responsible for a long list of very serious adverse outcomes. 25 The Pharmaceutical Defendants had access to scientific studies, detailed prescription data, and 26 reports of adverse events, including reports of addiction, hospitalization, and deaths – all of which 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 60 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 64 of 110 1 made clear the harms from long-term opioid use and that patients are suffering from addiction, 2 overdoses, and death in alarming numbers. More recently, the FDA and CDC have issued 3 4 pronouncements based on the medical evidence that conclusively expose the known falsity of the Pharmaceutical Defendants’ misrepresentations. 5 6 171. On information and belief, the Pharmaceutical Defendants coordinated their 7 messaging through national and regional sales and speaker trainings and coordinated 8 advertisements and marketing materials. 9 172. Moreover, at all times relevant to this Complaint, the Pharmaceutical 10 Defendants took steps to avoid detection of and to fraudulently conceal their deceptive marketing 11 12 and unlawful, unfair, and fraudulent conduct. For example, the Pharmaceutical Defendants 13 disguised their own role in the deceptive marketing of chronic opioid therapy by funding and 14 working through third parties like Front Groups and KOLs. The Pharmaceutical Defendants 15 purposefully hid behind the assumed credibility of these individuals and organizations and relied 16 on them to vouch for the accuracy and integrity of the Pharmaceutical Defendants’ false and 17 18 19 misleading statements about the risks and benefits of long-term opioid use for chronic pain. 173. Finally, the Pharmaceutical Defendants manipulated their promotional 20 materials and the scientific literature to make it appear that these items were accurate, truthful, 21 and supported by objective evidence when they were not. The Pharmaceutical Defendants 22 distorted the meaning or import of studies they cited and offered them as evidence for propositions 23 24 the studies did not support. The lack of support for the Pharmaceutical Defendants’ deceptive 25 messages was not apparent to medical professionals who relied upon them in making treatment 26 decisions, nor could it have been detected by the Tribes. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 61 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 65 of 110 174. 1 The Pharmaceutical Defendants’ efforts to artificially increase the number of 2 opioid prescriptions directly and predictably caused a corresponding increase in opioid abuse. In 3 the 2016 report, the CDC explained that “[o]pioid pain reliever prescribing has quadrupled since 4 1999 and has increased in parallel with [opioid] overdoses.”90 Many abusers start with legitimate 5 6 prescriptions. For these reasons, the CDC concluded that efforts to rein in the prescribing of 7 opioids for chronic pain are critical “[t]o reverse the epidemic of opioid drug overdose deaths and 8 prevent opioid-related morbidity.”91 Accordingly, the Pharmaceutical Defendants’ false and 9 misleading statements directly caused the current opioid epidemic. 10 E. All Defendants created an illicit market for opioids. 11 175. 12 13 of an illicit market for prescription opioids, further fueling the opioid epidemic. 14 15 16 In addition to the allegations above, all Defendants played a role in the creation 176. Each participant in the supply chain shares the responsibility for controlling the availability of prescription opioids. Opioid “diversion” occurs whenever the supply chain of prescription opioids is broken, allowing drugs to be transferred from a legitimate channel of 17 18 distribution or use to an illegitimate channel of distribution or use. 19 177. Diversion can occur at any point in the opioid supply chain. 20 178. For example, diversion can occur at the wholesale level of distribution when 21 22 distributors allow opioids to be lost or stolen in transit, or when distributors fill suspicious orders of opioids from buyers, retailers, or prescribers. Suspicious orders include orders of unusually 23 24 25 26 27 large size, orders that are disproportionately large in comparison to the population of a community Rose A Rudd, et al., Increases in Drug and Opioid-Involved Overdose Deaths – United States 2000-2014, 64 Morbidity & Mortality Wkly. Rep. 1378, at 1381 (2016), available at https://www.cdc.gov/mmwr/pdf/wk/mm6450.pdf. 91 Id. 90 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 62 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 66 of 110 1 served by the pharmacy, orders that deviate from a normal pattern, and/or orders of unusual 2 frequency. 3 179. Diversion can occur at pharmacies or retailers when a pharmacist fills a 4 prescription despite having reason to believe it was not issued for a legitimate medical purpose 5 6 or in the usual course of practice. Some of the signs that a prescription may have been issued for 7 an illegitimate medical purpose include when the patient seeks to fill multiple prescriptions from 8 different doctors (known as doctor shopping), when they travel great distances between the doctor 9 or their residence and the pharmacy to get the prescription filled, when they present multiple 10 prescriptions for the largest dose of more than one controlled substance, or when there are other 11 12 “red flags” surrounding the transaction. These red flags should trigger closer scrutiny of the 13 prescriptions by the pharmacy and lead to a decision that the patient is not seeking the medication 14 to treat a legitimate medical condition. 15 16 180. Diversion occurs through the use of stolen or forged prescriptions or the sale of opioids without prescriptions, including patients seeking prescription opioids under false 17 18 pretenses. Opioids can also be diverted when stolen by employees or others. 19 181. Opioid diversion occurs at an alarming rate in the United States. 20 182. Each participant in the supply chain, including each Defendant, has a common 21 22 law duty to prevent diversion by using reasonable care under the circumstances. This includes a duty not to create a foreseeable risk of harm to others. Additionally, one who engages in 23 24 affirmative conduct and thereafter realizes or should realize that such conduct has created an 25 unreasonable risk of harm to another is under a duty to exercise reasonable care to prevent the 26 threatened harm. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 63 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 67 of 110 183. 1 In addition to their common law duties, Defendants are subject to the statutory 2 requirements of the Controlled Substances Act, 21 U.S.C. § 801 et seq. (the “CSA”), and its 3 implementing regulations. Congress passed the CSA partly out of a concern about “the 4 widespread diversion of [controlled substances] out of legitimate channels into the illegal 5 6 7 8 9 market.” H.R. Rep. No. 91-1444, 91st Cong., Sess. 1 (1970), reprinted in U.S.C.C.A.N. 4566, 4572. 184. Washington law also prohibits, among other things, “deceptive acts or practices in the conduct of any trade or commerce.” RCW 19.86.020. 10 185. Washington law also provides criminal penalties for, among other things, any 11 12 13 14 15 16 person who does not comply with the strict distribution and dispensing requirements under the State Uniform Controlled Substances Act, RCW Chapter 69.50. 186. Defendants’ repeated and prolific violations of these requirements show that they have acted with willful disregard for the Tribes, tribal communities, and the people therein. 187. The CSA imposes a legal framework for the distribution and dispensing of 17 18 19 20 21 22 controlled substances. This framework acts as a system of checks and balances from the manufacturing level through delivery of the controlled substance to the patient or ultimate user. 188. Every person or entity that manufactures, distributes, or dispenses opioids must obtain a registration with the DEA. Registrants at every level of the supply chain must fulfill their obligations under the CSA. 23 24 189. All opioid distributors are required to maintain effective controls against 25 opioid diversion. They are required to create and use a system to identify and report to law 26 enforcement downstream suspicious orders of controlled substances, such as orders of unusually 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 64 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 68 of 110 1 large size, orders that are disproportionate, orders that deviate from a normal pattern, and/or 2 orders of unusual frequency. To comply with these requirements, distributors must know their 3 customers, must conduct due diligence, must report suspicious orders, and must terminate orders 4 if there are indications of diversion. 5 6 190. Under the CSA, anyone authorized to handle controlled substances must track 7 shipments. The DEA’s Automation of Reports and Consolidation Orders System (“ARCOS”) is 8 an automated drug reporting system that records and monitors the flow of Schedule II controlled 9 10 substances from the point of manufacture through distribution to the point of sale. ARCOS accumulates data on distributors’ controlled substances and transactions, which are then used to 11 12 identify diversion. Each person or entity registered to distribute ARCOS reportable controlled 13 substances, including opioids, must report each acquisition and distribution transaction to the 14 DEA. See 21 U.S.C. § 827; 21 C.F.R. § 1304.33. Each registrant must also maintain a complete, 15 accurate and current record of each substance manufactured, imported, received, sold, delivered, 16 exported, or otherwise disposed of. 17 18 19 20 191. diversion set forth in 21 C.F.R. § 1301.71. 1. The Distributor Defendants negligently failed to control the flow of opioids to the Tribes through illicit channels. 192. The DEA has provided guidance to distributors on how to combat opioid 21 22 Each registrant must also comply with the security requirements to prevent 23 diversion. On information and belief, since 2006 the DEA has conducted one-on-one briefings 24 with distributors regarding downstream customer sales, due diligence, and regulatory 25 responsibilities. On information and belief, the DEA also provides distributors with data on 26 27 controlled substance distribution patterns and trends, including data on the volume and frequency HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 65 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 69 of 110 1 of orders and the percentage of controlled versus non-controlled purchases. On information and 2 belief, the DEA has also hosted conferences for opioid distributors and has participated in 3 numerous meetings and events with trade associations. 4 193. On September 27, 2006, and December 27, 2007, the DEA Office of Diversion 5 6 7 8 9 Control sent letters to all registered distributors providing guidance on suspicious order monitoring and the responsibilities and obligations of registrants to prevent diversion. 194. As part of the legal obligation to maintain effective controls against diversion, the distributor is required to exercise due care in confirming the legitimacy of each and every 10 order prior to filling. Circumstances that could be indicative of diversion include ordering 11 12 excessive quantities of a limited variety of controlled substances while ordering few if any other 13 drugs; ordering a disproportionate amount of controlled substances versus non-controlled 14 prescription drugs; ordering excessive quantities of a limited variety of controlled substances in 15 combination with lifestyle drugs; and ordering the same controlled substance from multiple 16 distributors. 17 18 195. Suspicious orders must be reported when discovered. Registrants must 19 perform an independent analysis of a suspicious order prior to the sale to determine if the 20 controlled substances would likely be diverted, and filing a suspicious order and then completing 21 the sale does not absolve the registrant from legal responsibility. 22 196. On information and belief, the Distributor Defendants’ own industry group, 23 24 the Healthcare Distribution Management Association, published Industry Compliance Guidelines 25 titled “Reporting Suspicious Orders and Preventing Diversion of Controlled Substances” 26 emphasizing the critical role of each member of the supply chain in distributing controlled 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 66 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 70 of 110 1 substances. These industry guidelines stated: “At the center of a sophisticated supply chain, 2 distributors are uniquely situated to perform due diligence in order to help support the security of 3 controlled substances they deliver to their customers.” 4 197. Opioid distributors have admitted to the magnitude of the problem and, at least 5 6 7 superficially, their legal responsibilities to prevent diversion. They have made statements assuring the public they are supposedly undertaking a duty to curb the opioid epidemic. 8 9 198. These assurances, on their face, of identifying and eliminating criminal activity and curbing the opioid epidemic create a duty for the Distributor Defendants to take reasonable 10 measures to do just that. 11 199. 12 Despite their duties to prevent diversion, the Distributor Defendants have 13 knowingly or negligently allowed diversion.92 The DEA has repeatedly taken action to attempt 14 to force compliance, including 178 registrant actions between 2008 and 2012, 76 orders to show 15 cause issued by the Office of Administrative Law Judges, and 41 actions involving immediate 16 suspension orders.93 The Distributor Defendants’ wrongful conduct and inaction have resulted in 17 18 numerous civil fines and other penalties, including: 19 a. In a 2017 Administrative Memorandum of Agreement between McKesson and 20 the DEA, McKesson admitted that it “did not identify or report to [the] DEA 21 certain orders placed by certain pharmacies which should have been detected by 22 23 24 25 26 Scott Higham and Lenny Bernstein, The Drug Industry’s Triumph Over the DEA, Wash. Post, Oct. 15, 2017, available at http://wapo.st/opioids?tid=ss_mail (last accessed Dec. 21, 2017); Lenny Bernstein et al., How drugs intended for patients ended up in the hands of illegal users: ‘No one was doing their job,’ Wash. Post, Oct. 22, 2016, available at http://wapo.st/2etAUdQ?tid=ss_mail&utm_term=.96341c37bdb5 (last accessed Dec. 21, 2017). 93 Evaluation and Inspections Div., Office of the Inspector Gen., U.S. Dep’t of Justice, The Drug Enforcement Administration’s Adjudication of Registrant Actions 6 (May 2014), available at https://oig.justice.gov/reports/2014/e1403.pdf (last accessed Feb. 27, 2018). 92 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 67 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 71 of 110 1 McKesson as suspicious based on the guidance contained in the DEA Letters.” 2 McKesson was fined $150,000,000.94 3 b. McKesson has a history of repeatedly failing to perform its duties. In May 4 2008, McKesson entered into a settlement with the DEA on claims that McKesson 5 failed to maintain effective controls against diversion of controlled substances. 6 7 McKesson allegedly failed to report suspicious orders from rogue Internet 8 pharmacies around the Country, resulting in millions of doses of controlled 9 substances being diverted. McKesson’s system for detecting “suspicious orders” 10 from pharmacies was so ineffective and dysfunctional that at one of its facilities 11 in Colorado between 2008 and 2013, it filled more than 1.6 million orders, for tens 12 13 of millions of controlled substances, but it reported just 16 orders as suspicious, 14 all from a single consumer. 15 c. On November 28, 2007, the DEA issued an Order to Show Cause and 16 Immediate Suspension Order against a Cardinal Health facility in Auburn, 17 Washington, for failure to maintain effective controls against diversion. 18 19 d. On December 5, 2007, the DEA issued an Order to Show Cause and Immediate 20 Suspension Order against a Cardinal Health facility in Lakeland, Florida, for 21 failure to maintain effective controls against diversion. 22 e. On December 7, 2007, the DEA issued an Order to Show Cause and Immediate 23 Suspension Order against a Cardinal Health facility in Swedesboro, New Jersey, 24 25 26 Administrative Memorandum of Agreement between the U.S. Dep’t of Justice, the Drug Enf’t Admin., and the McKesson Corp., at 3 (Jan. 17, 2017), available at https://www.justice.gov/opa/press-release/file/928476/download (last accessed Feb. 27, 2018). 94 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 68 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 72 of 110 1 for failure to maintain effective controls against diversion. 2 f. On January 30, 2008, the DEA issued an Order to Show Cause and Immediate 3 Suspension Order against a Cardinal Health facility in Stafford, Texas, for failure 4 to maintain effective controls against diversion. 5 g. In 2008, Cardinal paid a $34 million penalty to settle allegations about opioid 6 7 diversion taking place at seven of its warehouses in the United States.95 8 h. On February 2, 2012, the DEA issued another Order to Show Cause and 9 Immediate Suspension Order against a Cardinal Health facility in Lakeland, 10 Florida, for failure to maintain effective controls against diversion. 11 i. In 2012, Cardinal reached an administrative settlement with the DEA relating 12 13 to opioid diversion between 2009 and 2012 in multiple states. 14 j. In December 2016, the Department of Justice announced a multi-million dollar 15 settlement with Cardinal for violations of the Controlled Substances Act.96 16 k. On information and belief, in connection with the investigations of Cardinal, 17 the DEA uncovered evidence that Cardinal’s own investigator warned Cardinal 18 19 against selling opioids to a particular pharmacy in Wisconsin that was suspected 20 of opioid diversion. Cardinal did nothing to notify the DEA or cut off the supply 21 of drugs to the suspect pharmacy. Cardinal did just the opposite, pumping up 22 opioid shipments to the pharmacy to almost 2,000,000 doses of oxycodone in one 23 24 25 26 95 Lenny Bernstein and Scott Higham, Cardinal Health fined $44 million for opioid reporting violations, Wash. Post, Jan. 11, 2017, available at http://wapo.st/2j8VHEc?tid=ss_mail&utm_term=.e5b03bdcdffa (last accessed Feb. 27, 2018). 96 Press Release, United States Dep’t of Justice, Cardinal Health Agrees to $44 Million Settlement for Alleged Violations of Controlled Substances Act (Dec. 23, 2016), available at https://www.justice.gov/usao-md/pr/cardinalhealth-agrees-44-million-settlement-alleged-violations-controlled-substances-act (last accessed Feb. 27, 2018). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 69 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 73 of 110 1 year, while other comparable pharmacies were receiving approximately 69,000 2 doses/year. 3 l. In 2007, AmerisourceBergen lost its license to send controlled substances from 4 a distribution center amid allegations that it was not controlling shipments of 5 6 prescription opioids to Internet pharmacies. 7 m. In 2012, AmerisourceBergen was implicated for failing to protect against 8 diversion of controlled substances into non-medically necessary channels. 9 200. Although distributors have been penalized by law enforcement authorities, 10 these penalties have not changed their conduct. They pay fines as a cost of doing business in an 11 12 13 industry that generates billions of dollars in revenue and profit. 201. The Distributor Defendants’ failure to prevent the foreseeable injuries from 14 opioid diversion created an enormous black market for prescription opioids, which market 15 extended to the Tribes and their members. Each Distributor Defendant knew or should have 16 known that the opioids reaching the Tribes were not being consumed for medical purposes and 17 18 19 20 21 22 that the amount of opioids flowing to the Tribes was far in excess of what could be consumed for medically necessary purposes. 202. The Distributor Defendants negligently or intentionally failed to adequately control their supply lines to prevent diversion. A reasonably prudent distributor of Schedule II controlled substances would have anticipated the danger of opioid diversion and protected against 23 24 it by, for example, taking greater care in hiring, training, and supervising employees; providing 25 greater oversight, security, and control of supply channels; looking more closely at the 26 pharmacists and doctors who were purchasing large quantities of commonly abused opioids in 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 70 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 74 of 110 1 amounts greater than the populations in those areas would warrant; investigating demographic or 2 epidemiological facts concerning the increasing demand for narcotic painkillers in and around the 3 Tribes; providing information to pharmacies and retailers about opioid diversion; and in general, 4 simply following applicable statutes, regulations, professional standards, and guidance from 5 6 7 8 9 government agencies and using a little bit of common sense. 203. On information and belief, the Distributor Defendants made little to no effort to visit the pharmacies servicing the areas around the Tribes to perform due diligence inspections to ensure that the controlled substances the Distributor Defendants had furnished were not being 10 diverted to illegal uses. 11 12 204. On information and belief, the compensation the Distributor Defendants 13 provided to certain of their employees was affected, in part, by the volume of their sales of opioids 14 to pharmacies and other facilities servicing the areas around the Tribes, thus improperly creating 15 incentives that contributed to and exacerbated opioid diversion and the resulting epidemic of 16 opioid abuse. 17 18 205. It was reasonably foreseeable to the Distributor Defendants that their conduct 19 in flooding the market in and around the Tribes with highly addictive opioids would allow opioids 20 to fall into the hands of children, addicts, criminals, and other unintended users. 21 22 206. It is reasonably foreseeable to the Distributor Defendants that, when unintended users gain access to opioids, tragic preventable injuries will result, including 23 24 25 26 addiction, overdoses, and death. It is also reasonably foreseeable that many of these injuries will be suffered by Tribe members, and that the costs of these injuries will be borne by the Tribes. 207. The Distributor Defendants knew or should have known that the opioids being 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 71 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 75 of 110 1 diverted from their supply chains would contribute to the opioid epidemic faced by the Tribes, 2 and would create access to opioids by unauthorized users, which, in turn, perpetuates the cycle of 3 addiction, demand, illegal transactions, economic ruin, and human tragedy. 4 208. The Distributor Defendants were aware of widespread prescription opioid 5 6 abuse in and around the Tribes, but, on information and belief, they nevertheless persisted in a 7 pattern of distributing commonly abused and diverted opioids in specific geographic areas, in 8 such quantities, and with such frequency, that they knew or should have known these commonly 9 abused controlled substances were not being prescribed and consumed for legitimate medical 10 purposes. 11 12 209. The use of opioids by Tribe members who were addicted or who did not have 13 a medically necessary purpose could not occur without the knowing cooperation and assistance 14 of the Distributor Defendants. If the Distributor Defendants adhered to effective controls to guard 15 against diversion, the Tribes and their members would have avoided significant injury. 16 210. The Distributor Defendants made substantial profits over the years based on the 17 18 19 20 21 22 diversion of opioids into the Tribes. The Distributor Defendants knew that the Tribes would be unjustly forced to bear the costs of these injuries and damages. The Distributor Defendants’ intentional distribution of excessive amounts of 211. prescription opioids to relatively small communities primarily serving Tribe members showed an intentional or reckless disregard for the safety of the Tribes and their members. Their conduct 23 24 poses a continuing threat to the health, safety, and welfare of the Tribes. 25 212. The federal and state laws at issue here are public safety laws. 26 213. The Distributor Defendants’ violations constitute prima facie evidence of 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 72 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 76 of 110 1 2 negligence under State law. 2. The Pharmaceutical Defendants negligently failed to control the flow of opioids to the Tribes through illicit channels. 214. The same legal duties to prevent diversion, and to monitor, report, and prevent 3 4 5 6 suspicious orders of prescriptions opioids that were incumbent upon the Distributor Defendants were also legally required of the Pharmaceutical Defendants under federal law. 7 215. Like the Distributor Defendants, the Pharmaceutical Defendants are required to 8 9 design and operate a system to detect suspicious orders, and to report such orders to law 10 enforcement. See 21 C.F.R. § 1301.74(b); 21 U.S.C. § 823. The Pharmaceutical Defendants have 11 not done so. 12 13 216. On information and belief, for over a decade the Pharmaceutical Defendants have been able to track the distribution and prescribing of their opioids down to the retail and 14 15 prescriber level. Thus, the Pharmaceutical Defendants had actual knowledge of the prescribing 16 practices of doctors, including red flags indicating diversion. The Pharmaceutical Defendants did 17 not report those red flags, nor did they cease marketing to those doctors. Like the Distributor 18 Defendants, the Pharmaceutical Defendants breached their duties under federal and state law. 19 217. The Pharmaceutical Defendants had access to and possession of the information 20 21 necessary to monitor, report, and prevent suspicious orders and to prevent diversion. The 22 Pharmaceutical Defendants engaged in the practice of paying “chargebacks” to opioid distributors. 23 A chargeback is a payment made by a manufacturer to a distributor after the distributor sells the 24 manufacturer’s product at a price below a specified rate. After a distributor sells a manufacturer’s 25 product to a pharmacy, for example, the distributor requests a chargeback from the manufacturer 26 27 and, in exchange for the payment, the distributor identifies to the manufacturer the product, volume HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 73 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 77 of 110 1 and the pharmacy to which it sold the product. Thus, the Pharmaceutical Defendants knew the 2 volume, frequency, and pattern of opioid orders being placed and filled. The Pharmaceutical 3 Defendants built receipt of this information into the payment structure for the opioids provided to 4 the opioid distributors. 5 218. 6 The Department of Justice has recently confirmed the suspicious order 7 obligations clearly imposed by federal law (21 C.F.R. § 1301.74(b); 21 U.S.C. § 823(a)(1)), fining 8 Mallinckrodt $35 million for failure to report suspicious orders of controlled substances, including 9 opioids, and for violating recordkeeping requirements.97 Among the allegations resolved by the 10 settlement, the government alleged “Mallinckrodt failed to design and implement an effective 11 12 system to detect and report suspicious orders for controlled substances – orders that are unusual in 13 their frequency, size, or other patterns . . . [and] Mallinckrodt supplied distributors, and the 14 distributors then supplied various U.S. pharmacies and pain clinics, an increasingly excessive 15 quantity of oxycodone pills without notifying DEA of these suspicious orders.”98 Mallinckrodt 16 agreed that its “system to monitor and detect suspicious orders did not meet the standards outlined 17 18 19 in letters from the DEA Deputy Administrator, Office of Diversion Control, to registrants dated September 27, 2006 and December 27, 2007.”99 20 21 219. Purdue also unlawfully and unfairly failed to report or address illicit and unlawful prescribing of its drugs, despite knowing about it for years. Through its extensive network 22 23 24 25 26 See Press Release, U.S. Dep’t of Justice, Mallinckrodt Agrees to Pay Record $35 Million Settlement for Failure to Report Suspicious Orders of Pharmaceutical Drugs and for Recordkeeping Violations (July 11, 2017), https://www.justice.gov/opa/pr/mallinckrodt-agrees-pay-record-35-million-settlement-failure-report-suspiciousorders. 98 Id. (internal quotations omitted). 99 Administrative Memorandum of Agreement between the United States Dep't of Justice, the Drug Enforcement Agency, and Mallinckrodt, plc. and its subsidiary Mallinckrodt, LLC (July 10, 2017), https://www.justice.gov/usaoedmi/press-release/file/986026/download. 97 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 74 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 78 of 110 1 of sales representatives, Purdue had and continues to have knowledge of the prescribing practices 2 of thousands of doctors and could identify doctors who displayed red flags for diversion such as 3 those whose waiting rooms were overcrowded, whose parking lots had numerous out-of-state 4 vehicles, and whose patients seemed young and healthy or homeless. Using this information, 5 6 Purdue has maintained a database since 2002 of doctors suspected of inappropriately prescribing 7 its drugs.100 Rather than report these doctors to state medical boards or law enforcement authorities 8 (as Purdue is legally obligated to do) or cease marketing to them, Purdue used the list to 9 demonstrate the high rate of diversion of OxyContin – the same OxyContin that Purdue had 10 promoted as less addictive – in order to persuade the FDA to bar the manufacture and sale of 11 12 generic copies of the drug because the drug was too likely to be abused. In an interview with the 13 Los Angeles Times,101 Purdue’s senior compliance officer acknowledged that in five years of 14 investigating suspicious pharmacies, Purdue failed to take action – even where Purdue employees 15 personally witnessed the diversion of its drugs. The same was true of prescribers; despite its 16 knowledge of illegal prescribing, Purdue did not report until years after law enforcement shut down 17 18 a Los Angeles clinic that prescribed more than 1.1 million OxyContin tablets and that Purdue’s 19 district manager described internally as “an organized drug ring.” In doing so, Purdue protected its 20 own profits at the expense of public health and safety. 21 220. In 2016, the NY AG found that, between January 1, 2008 and March 7, 2015, 22 23 24 25 100 Scott Glover and Lisa Girion, OxyContin maker closely guards its list of suspect doctors, L.A. Times, Aug. 11, 2013, available at http://articles.latimes.com/2013/aug/11/local/la-me-rx-purdue-20130811 (last accessed Feb. 27, 2018). 101 Harriet Ryan et al., More than 1 million OxyContin pills ended up in the hands of criminal and addicts. What the drugmaker knew, L.A. Times, July 10, 2016, available at http://www.latimes.com/projects/la-me-oxycontin-part2/ (last accessed Feb. 27, 2018). 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 75 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 79 of 110 1 Purdue’s sales representatives, at various times, failed to timely report suspicious prescribing and 2 continued to detail those prescribers even after they were placed on a “no-call” list.”102 3 4 221. As Dr. Mitchell Katz, director of the Los Angeles County Department of Health Services, said in a Los Angeles Times article, “Any drug company that has information about 5 6 physicians potentially engaged in illegal prescribing or prescribing that is endangering people’s 7 lives has a responsibility to report it.”66103 The NY AG’s settlement with Purdue specifically cited 8 the company for failing to adequately address suspicious prescribing. Yet, on information and 9 belief, Purdue continues to profit from the prescriptions of such prolific prescribers. 10 222. Like Purdue, Endo has been cited for its failure to set up an effective system for 11 12 identifying and reporting suspicious prescribing. In its settlement agreement with Endo, the NY 13 AG found that Endo failed to require sales representatives to report signs of abuse, diversion, and 14 inappropriate prescribing; paid bonuses to sales representatives for detailing prescribers who were 15 subsequently arrested or convicted for illegal prescribing; and failed to prevent sales 16 representatives from visiting prescribers whose suspicious conduct had caused them to be placed 17 18 on a no-call list. The NY AG also found that, in certain cases where Endo’s sales representatives 19 detailed prescribers who were convicted of illegal prescribing of opioids, those representatives 20 could have recognized potential signs of diversion and reported those prescribers but failed to do 21 so. 22 223. On information and belief, the other Pharmaceutical Defendants have engaged 23 24 25 26 102 See Assurance of Discontinuance, In re Purdue Pharma L.P. (Assurance No. 15-151), available at https://ag.ny.gov/pdfs/Purdue-AOD-Executed.pdf (last visited Feb. 27, 2018). 103 Scott Glover and Lisa Girion, OxyContin maker closely guards its list of suspect doctors, L.A. Times, August 11, 2013, available at http://articles.latimes.com/2013/aug/11/local/la-me-rx-purdue-20130811 (last accessed Feb. 27, 2018). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 76 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 80 of 110 1 in similar conduct in violation of their responsibilities to prevent diversion. 2 3 4 224. The Pharmaceutical Defendants’ actions and omission in failing to effectively prevent diversion and failing to monitor, report, and prevent suspicious orders have enabled the unlawful diversion of opioids into the Tribes’ Communities. 5 F. 6 Defendants’ unlawful conduct and breaches of legal duties caused the harm alleged herein and substantial damages. 7 225. As the Pharmaceutical Defendants’ efforts to expand the market for opioids 8 9 increased, so have the rates of prescription and the sale of their products—and the rates of opioid- 10 related substance abuse, hospitalization, and death among the Tribes and across the nation. 11 Meanwhile, the Distributor Defendants have continued to unlawfully ship massive quantities of 12 opioids into communities like the Tribes’ communities, fueling the epidemic. 13 226. There is a “parallel relationship between the availability of prescription opioid 14 15 16 analgesics through legitimate pharmacy channels and the diversion and abuse of these drugs and associated adverse outcomes.”104 17 18 227. Opioids are widely diverted and improperly used, and the widespread use of the drugs has resulted in a national epidemic of opioid overdose deaths and addictions.105 19 228. The epidemic is “directly related to the increasingly widespread misuse of 20 21 powerful opioid pain medications.”106 229. 22 23 The increased abuse of prescription opioids—along with growing sales—has contributed to a large number of overdoses and deaths. 24 104 25 26 See Richard C. Dart et al., Trends in Opioid Analgesic Abuse and Mortality in the United States, 372 N. ENG. J. MED. 241 (2015). 105 Volkow & McLellan, supra note 1. 106 Califf, supra note 2. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 77 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 81 of 110 1 230. As shown above, the opioid epidemic has escalated in the Tribes’ communities 2 with devastating effects. Substantial opiate-related substance abuse, hospitalization, and death 3 mirror Defendants’ increased distribution of opioids. 4 231. Because of the well-established relationship between the use of prescription 5 6 opioids and the use of non-prescription opioids, such as heroin, the massive distribution of opioids 7 to the Tribes’ communities and areas from which opioids are being diverted to the Tribes, has 8 caused the opioid epidemic to include heroin addiction, abuse, and death. 9 10 232. Prescription opioid abuse, addiction, morbidity, and mortality are hazards to public health and safety in the Tribes’ communities. 11 12 13 14 15 16 233. Heroin abuse, addiction, morbidity, and mortality are hazards to public health and safety in the Tribes’ communities. 234. Defendants repeatedly and purposefully breached their duties under state and federal law, and such breaches are direct and proximate causes of, and/or substantial factors leading to, the widespread diversion of prescription opioids for nonmedical purposes in the Tribes’ 17 18 19 communities. 235. The unlawful diversion of prescription opioids is a direct and proximate cause 20 of, and/or substantial factor leading to, the opioid epidemic, prescription opioid abuse, addiction, 21 morbidity, and morality in the Tribes’ communities. This diversion and the resulting epidemic are 22 direct causes of foreseeable harms incurred by the Tribes and members of the Tribes’ communities. 23 24 236. Defendants’ intentional and/or unlawful conduct resulted in direct and 25 foreseeable, past and continuing economic damages for which the Tribes seek relief, as alleged 26 herein. The Tribes also seek the means to abate the epidemic created by the Defendants. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 78 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 82 of 110 237. 1 2 The Tribes seek economic damages from the Defendants as reimbursement for the costs associated with past efforts to eliminate the hazards to public health and safety. 3 238. The Tribes seek economic damages from the Defendants to pay for the costs to 4 permanently eliminate the hazards to public health and safety and abate the public nuisance. 5 239. 6 To eliminate the hazard to public health and safety, and abate the public 7 nuisance, a “multifaceted, collaborative public health and law enforcement approach is urgently 8 needed.”107 9 240. A comprehensive response to this crisis must focus on preventing new cases of 10 opioid addiction, identifying early opioid-addicted individuals, and ensuring access to effective 11 12 opioid addiction treatment while safely meeting the needs of patients experiencing pain.108 241. 13 14 been limited by budgetary constraints. 15 16 The community-based problems require community-based solutions that have 242. Having profited enormously through the aggressive sale, misleading promotion, and irresponsible distribution of opioids, Defendants should be required to take 17 18 19 responsibility for the financial burdens their conduct has inflicted upon the Tribes and the Tribes’ communities. 20 21 22 243. The opioid epidemic still rages because the fines and suspensions imposed by the DEA do not change the conduct of the industry. The Defendants pay fines as a cost of doing business in an industry that generates billions of dollars in annual revenue. They hold multiple 23 24 107 Rose A. Rudd, supra note 255, at 1445. See Johns Hopkins Bloomberg School of Public Health, The Prescription Opioid Epidemic: An Evidence-Based Approach (G. Caleb Alexander et al., eds., 2015), available at https://www.jhsph.edu/research/centers-andinstitutes/center-for-drug-safety-and-effectiveness/research/prescriptionopioids/JHSPH_OPIOID_EPIDEMIC_REPORT.pdf. 108 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 79 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 83 of 110 1 DEA registration numbers and when one facility is suspended, they simply ship from another 2 facility. 3 244. The Defendants have abandoned their duties imposed by the law, have taken 4 advantage of a lack of DEA enforcement, and have abused the privilege of distributing controlled 5 6 substances in the Tribes’ communities. 245. 7 8 9 10 11 12 13 In the course of conduct described in this Complaint, Defendants have acted with oppression, fraud, and malice, actual and presumed. G. The statutes of limitations are tolled and Defendants are estopped from asserting statutes of limitations as defenses. 246. Defendants’ conduct has continued from the early 1990s through today, and is still ongoing. The continued tortious and unlawful conduct by the Defendants causes a repeated or continuous injury. The damages have not occurred all at once but have continued to occur and 14 15 have increased as time progresses. The tort is not completed nor have all the damages been incurred 16 until the wrongdoing ceases. The wrongdoing and unlawful activity by Defendants has not ceased. 17 The public nuisance remains unabated. 18 19 247. Defendants are equitably estopped from relying upon a statute of limitations defense because they undertook efforts to purposefully conceal their unlawful conduct and 20 21 22 23 24 fraudulently assure the public that they were undertaking efforts to comply with their obligations under the controlled substances laws, all with the goal of continuing to generate profits. 248. For example, a Cardinal Health executive claimed that it uses “advanced analytics” to monitor its supply chain, and assured the public it was being “as effective and efficient 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 80 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 84 of 110 1 as possible in constantly monitoring, identifying, and eliminating any outside criminal activity.”109 2 3 4 249. Similarly, McKesson publicly stated that it has a “best-in-class controlled substance monitoring program to help identify suspicious orders,” and claimed it is “deeply passionate about curbing the opioid epidemic in our country.”110 5 250. 6 Defendants, through their trade associations, filed an amicus brief that 7 represented that Defendants took their duties seriously, complied with their statutory and 8 regulatory responsibilities, and monitored suspicious orders using advanced technology.111 9 251. Defendants purposely concealed their wrongful conduct, including by assuring 10 the public and governmental authorities that they were complying with their obligations and were 11 12 acting to prevent diversion and drug abuse. Defendants also misrepresented the impact of their 13 behavior by providing the public with false information about opioids and have continued to use 14 Front Groups and third parties to minimize the risks of Defendants’ conduct. 15 16 252. Defendants have also concealed and prevented discovery of information, including data from the ARCOS database, that will confirm their identities and the extent of their 17 18 wrongful and illegal activities. 253. 19 20 Defendants also lobbied Congress and actively attempted to halt DEA investigations and enforcement actions and to subvert the ability of agencies to regulate their 21 Lenny Bernstein et al., How Drugs Intended for Patients Ended Up in the Hands of Illegal Users: “No One Was Doing Their Job,” Wash. Post, Oct. 22, 2016, available at http://wapo.st/2etAUdQ?tid=ss_mail&utm_term=.f455a35fdee5 (last accessed Feb. 27, 2018). 110 Scott Higham et al., Drug Industry Hired Dozens of Officials from the DEA as the Agency Tried to Curb Opioid Abuse, Wash. Post, Dec. 22, 2016, available at http://wapo.st/2hKYW3y?tid=ss_mail&utm_term=.bdac6eb4ec17 (last accessed Feb. 27, 2018). 111 Brief for Healthcare Distribution Mgmt. Ass’n and Nat’l Ass’n of Chain Drug Stores as Amici Curiae in Support of Neither Party, Masters Pharm, Inc. v. U.S. Drug Enf't Admin. (No. 15-1335), 2016 WL 1321983, at *3-4, *25. (D.C. Cir. Apr. 4, 2016). 109 22 23 24 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 81 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 85 of 110 1 conduct.112 As a result, there was a sharp drop in enforcement actions and the standard for the DEA 2 to revoke a distributor’s license was raised. 3 254. In addition, the Defendants fraudulently attempted to convince the public that 4 they were complying with their legal obligations and working to curb the opioid epidemic. 5 255. 6 Because the Defendants concealed the facts surrounding the opioid epidemic, 7 the Tribes did not know if the existence or scope of the Defendants’ misconduct, and could not 8 have acquired such knowledge earlier through the exercise of reasonable diligence. 9 256. Defendants intended that their false statements and omissions be relied upon, 10 including by the Tribes, their communities, and their members. 11 257. 12 Defendants knew of their wrongful acts and had material information pertinent 13 to their discovery, but concealed that information from the public, including the Tribes, their 14 communities, and their members. Only Defendants knew of their widespread misinformation 15 campaign and of their repeated, intentional failures to prevent opioid diversion. 16 258. Defendants cannot claim prejudice due to a late filing because this suit was filed 17 18 19 upon discovering the facts essential to the claim. Indeed, the existence, extent, and damage of the opioid crisis have only recently come to light. 20 259. 21 intended it to be deceptive. 22 260. Defendants had actual knowledge that their conduct was deceptive, and they The Tribes were unable to obtain vital information regarding these claims 23 24 absent any fault or lack of diligence on the Tribes’ part. H. 25 26 112 The impact of opioid abuse on the Tribes See Higham and Bernstein, supra note 92. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 82 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 86 of 110 261. 1 2 3 Defendants’ creation, through false and misleading advertising and a failure to prevent diversion, of a virtually limitless opioid market has significantly harmed tribal communities and resulted in an abundance of drugs available for non-medical and criminal use 4 and fueled a new wave of addiction and injury. It has been estimated that approximately 60% of 5 6 the opioids that are abused come, directly or indirectly, through doctors’ prescriptions. 7 262. American Indians suffer the highest per capita rate of opioid overdoses.113 8 263. The impact on American Indian children is particularly devastating. The CDC 9 10 reported that approximately 1 in 10 American Indian youths ages 12 or older used prescription opioids for nonmedical purposes in 2012, double the rate for white youth.114 11 264. 12 Opioid deaths represent the tip of the iceberg. Hospital admissions and 13 emergency room visits have also skyrocketed.115 For every opioid overdose death, there are 10 14 treatment admissions for abuse, 32 emergency room visits, 130 people who are addicted to opioids, 15 and 825 nonmedical users of opioids.116 16 265. The fact that American Indian teens are able to easily obtain prescription 17 18 19 20 21 22 23 24 25 26 opioids through the black market created by opioid diversion highlights the direct impact on the Tribes of Defendants’ actions and inactions. 113 National Congress of American Indians, Reflecting on a Crisis Curbing Opioid Abuse in Communities (Oct. 2016), available at http://www.ncai.org/policy-research-center/research-data/prc-publications/Opioid_Brief.pdf (last accessed Feb. 27, 2018). 114 Id. 115 Lisa Girion and Karen Kaplan, Opioids prescribed by doctors led to 92,000 overdoses in ERs in one year, LA Times, Oct. 27, 2014, available at http://beta.latimes.com/nation/la-sci-sn-opioid-overdose-prescription-hospital-er20141026-story.html (last accessed Feb. 27, 2018). 116 Jennifer DuPuis, Associate Dir., Human Servs. Div., Fond du Lac Band of Lake Superior Chippewa, The Opioid Crisis in Indian Country, at 37, available at https://www.nihb.org/docs/06162016/Opioid%20Crisis%20Part%20in%20Indian%20Country.pdf (last accessed Feb. 27, 2018); Gery P. Guy, Jr., et al., Emergency Department Visits Involving Opioid Overdoses, US., 2010-2014, 54 Am. J. of Prev. Med. e37, Jan. 2018. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 83 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 87 of 110 266. 1 2 3 Even the Tribes’ youngest members bear the consequences of the opioid abuse epidemic fueled by Defendants’ conduct. In 1992, only 2 percent of women admitted for drug treatment services during pregnancy abused opioids. By 2012 opioids were the most commonly 4 abused substance by pregnant women, accounting for 38 percent of all drug treatment 5 6 admissions.117 Many tribal women have become addicted to prescription opioids and have used 7 these drugs during their pregnancies. As a result, many tribal infants suffer from opioid withdrawal 8 and Neonatal Abstinence Syndrome (“NAS”).118 9 267. Infants suffering from NAS are separated from their families and placed into 10 the custody of the tribal child welfare services or receive other governmental services so they can 11 12 be afforded medical treatment and be protected from drug-addicted parents. 268. 13 The impact of NAS can be life-long. Most NAS infants are immediately 14 transferred to a neonatal intensive care unit for a period of days, weeks, or even months. NAS can 15 also require an emergency evacuation for care to save the infant’s life. Such emergency 16 transportation costs the Tribes thousands of dollars for each occurrence. 17 269. 18 Many NAS infants have short-term and long-term developmental issues that 19 prevent them from meeting basic cognitive and motor-skills milestones. Many will suffer from 20 vision and digestive issues; some are unable to attend full days of school. These disabilities follow 21 these children through elementary school and beyond. 22 270. Pregnant American Indian women are up to 8.7 times more likely to be 23 24 25 26 117 Naana Afua Jumah, Rural, Pregnant and Opioid Dependent: A Systematic Review, National Institutes of Health, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4915786/ (last accessed Feb. 27, 2018). 118 Jean Y, Ko et al., CDC Grand Rounds, Public Health Strategies to Prevent Neonatal Abstinence Syndrome, U.S. C.D.C. 66 Morbidity & Mortality Wkly. Rep. 242 (2017), available at https://www.cdc.gov/mmwr/volumes/66/wr/pdfs/mm6609a2.pdf (last accessed Feb. 27 , 2018). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 84 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 88 of 110 1 diagnosed with opioid dependency or abuse compared to the next highest demographic,119 and in 2 some communities upwards of 1 in 10 pregnant American Indian women has a diagnosis of opioid 3 dependency or abuse.120 4 271. Many of the parents of these children continue to relapse into prescription 5 6 opioid use and abuse. As a result, many of these children are placed in foster care or adopted. 272. 7 8 9 Opioid diversion also contributes to a range of social problems including physical and mental consequences, crime, delinquency, and mortality. Opioid abuse has also resulted in an explosion in heroin use. Almost 80% of those who used heroin in the past year 10 previously abused prescription opioids. Other adverse social outcomes include child abuse and 11 12 neglect, family dysfunction, criminal behavior, poverty, property damage, unemployment, and 13 despair. More and more tribal resources are needed to combat these problems, leaving a diminished 14 pool of already-scarce resources to devote to positive societal causes like education, cultural 15 preservation, and other social programs. The prescription opioid crisis diminishes the Tribes’ 16 available workforce, decreases productivity, increases poverty, and requires greater governmental 17 18 19 expenditures by the Tribes. It also undermines the ability of the Tribes to self-govern and to maintain and develop economic independence. 20 21 22 273. Many patients who become addicted to opioids will lose their jobs. Some will lose their homes and their families. Some will get treatment and fewer will successfully complete it; many of those patients will relapse, returning to opioids or some other drug. Of those who 23 24 25 continue to take opioids, some will overdose – some fatally, some not. Others will die prematurely 119 120 26 DuPuis, supra note 116, at 64. Id. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 85 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 89 of 110 1 from related causes – falling or getting into traffic accidents due to opioid-induced somnolence; 2 dying in their sleep from opioid-induced respiratory depression; suffering assaults while engaging 3 in illicit drug transactions; or dying from opioid-induced heart or neurological disease.. 4 274. On information and belief, the Tribes assert that these statistical trends are 5 6 7 8 9 manifest in each of their communities. 275. For example, Plaintiff Port Gamble S’Klallam Tribe (“PGST”) has incurred substantial costs and burdens in battling the opioid epidemic, which has devastated the PGST community, and the imposition of those costs and burdens on PGST are directly the result of the 10 acts and omissions of Defendants alleged herein. The following examples of those costs and 11 12 13 burdens are presented by way of illustration only, and are by no means exhaustive. 276. PGST has had to hire additional substance abuse counselors to deal with the 14 substantial increase in opioid addiction among PGST Tribal members and their families. They 15 have had to hire a nurse specializing in substance abuse disorders for case management related to 16 the opioid epidemic. They have had to hire and train physicians to provide medication-assisted 17 18 19 treatment (e.g., naltrexone) for opioid addiction and abuse. 277. PGST has also experienced an increased number of child custody proceedings, 20 involving the removal of minor children from their parents, directly resulting from parents who 21 are neglecting their children due to opioid addiction, dependence and related criminal activity. The 22 increased number of proceedings burden existing child welfare services staff and resources, and 23 24 require additional hires. Every child who comes into such care and custody needs an array of 25 intervention and services, including the need for mental health counseling, medical services, 26 substitute care, and housing. The parents who survive need treatment and counseling as well. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 86 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 90 of 110 1 Children who are exposed to opioids in utero also suffer physical, mental, and emotional damage, 2 often bearing scars that will last a lifetime. 3 278. PGST has had to provide naloxone HCl (brand name “NARCAN”), an 4 overdose reversal drug administered nasally, and the training to use it to all its law enforcement 5 6 personnel and all its natural resources officers. Those officers and personnel, due to their work in 7 the field for the PGST community, have repeatedly encountered individuals suffering from opioid 8 overdose symptoms who can be assisted and saved from death by timely administration of 9 NARCAN. PGST is also providing NARCAN and training in its use to other members of its 10 community, because the need for such emergency treatment is acute. Approximately 120 tribal 11 12 13 members have been provided with and trained on how to administer the drug. 279. PGST receives federal funding under the Native American Housing Assistance 14 and Self-Determination Act (NAHASDA) to develop and operate affordable housing for low- 15 income Indian families. NAHASDA requires that PGST utilize leases for such housing that 16 authorize eviction for drug-related criminal activity. Due to the substantial increase in opioid 17 18 abuse, PGST has seen a substantial increase in evictions of PGST members and other Indian 19 families. When those families are evicted from PGST housing they generally become homeless, 20 and as a result they are then in even greater need of social, medical, and child welfare services 21 from PGST. 22 280. The PGST community met in two separate Tribal town hall meetings on the 23 24 local impacts of the opioid crisis. Approximately 100 PGST community members attended each 25 meeting, which is substantially more than the number of people who usually attend such meetings, 26 demonstrating the intense and widespread impact of the crisis. Following the initial town hall 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 87 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 91 of 110 1 meeting, the PGST Tribal Council met with local county officials to discuss a response to the 2 opioid crisis. These efforts led to the creation of the Tribal Healing Opioid Response (or T.H.O.R.), 3 a project led by the Tribe’s Wellness and Health Services Departments.121 4 281. The T.H.O.R. initiative has three main goals, and Departments across the 5 6 Tribe—not just health-related entities—are responsible for achieving them. These are: 1) 7 preventing opioid misuse and abuse through changing prescription practices, raising awareness of 8 overdose, youth prevention programs, safe storage and disposal education, and drug supply 9 reduction; 2) expanding access to opioid use disorder treatment by training health providers to 10 recognize disorder symptoms, increasing access to treatment, applying treatment practices in the 11 12 criminal justice system, syringe exchange and overdose prevention/treatment training, and 13 reducing instance of opioid withdrawal in newborns; and 3) preventing deaths from overdose by 14 educating the tribal community how to recognize and respond to an overdose and expanding access 15 to overdose reversal medication.122 To carry out this initiative, PGST convenes monthly 16 workgroup meetings (since January 2017) composed of Tribal Councilmembers, Department 17 18 Directors and staff (along with some community members). They review the statewide opioid 19 response plan, and develop the local response plan. They identify the various strategies and assign 20 tasks and responsibilities to workgroup members. 21 22 282. PGST has also carried out ongoing education of the local community about dealing with the crisis: how addiction can be treated, how to address an overdose, and how to 23 24 25 26 interdict and prevent opioids. T.H.O.R. Responds to PGST Opioid Crisis, PORT GAMBLE S’KLALLAM TRIBE SYӘ́CӘM (Nov. 2017), https://www.pgst.nsn.us/images/s-klallam-view/NOV_2017_Syecem.pdf. 122 Id. 121 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 88 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 92 of 110 283. 1 2 3 The Port Gamble S’Klallam Tribe has been forced to expend its resources to respond to the opioid crisis on the reservation by pursuing the above goals and strategies. But the crisis has also ripped the fabric of the PGST community. The loss (through death or addiction) of 4 parents, children, brothers and sisters, uncles and aunts, nieces and nephews, and cousins to this 5 6 crisis has been devastating, and will impact PGST for generations. The breadth of the response 7 by the Port Gamble S’Klallam Tribe illustrates the threat of the opioid crisis to the Tribes, as well 8 as the effort and expenditures required to begin addressing opioid problems that stem from 9 Defendants’ actions. 10 284. The other Tribal Plaintiffs have suffered similar losses, been burdened with 11 12 13 14 similar costs, and have been affected by the same impacts as Port Gamble S’Klallam, all resulting from acts and omissions of the Defendants. V. CAUSES OF ACTION 15 COUNT 1: PUBLIC NUISANCE and NUISANCE PER SE RCW 7.48.010 et seq. Against All Defendants 16 17 285. 18 19 as if fully set forth herein and further allege as follows. 20 21 The Tribes incorporate by reference all preceding paragraphs of this Complaint 286. Pursuant to RCW 7.48.010, an actionable nuisance is defined as, inter alia, “whatever is injurious to health or indecent or offensive to the senses . . .” 22 287. Pursuant to RCW 7.48.130, “A public nuisance is one which affects equally the 23 24 25 26 rights of an entire community or neighborhood, although the extent of the damage may be unequal.” 288. The Tribes and their members have a right to be free from conduct that 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 89 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 93 of 110 1 endangers their health and safety. Yet Defendants have engaged in conduct which endangers or 2 injures the health and safety of the Tribes and tribal members by their production, promotion, 3 4 distribution, and marketing of opioids for use by tribal members and residents of surrounding communities that impacts the Tribes’ communities. 5 6 289. Each Defendant has created or assisted in the creation of a condition that is 7 injurious to the health and safety of the Tribes and their members, and interferes with the 8 comfortable enjoyment of life and property of entire communities. 9 290. Each Defendant unlawfully provided false or misleading material information 10 about prescription opioids or unlawfully failed use reasonable care or comply with statutory 11 12 13 requirements in the distribution of prescription opioids. 291. Defendants’ conduct has directly caused deaths, serious injuries, and a severe 14 disruption of the public peace, order and safety, including fueling the homeless and opioid crises 15 facing the Tribes as described herein. Defendants’ conduct is ongoing and continues to produce 16 permanent and long-lasting damage. 17 18 292. Defendants’ acts and omissions created the opioid epidemic and thereby 19 annoyed, injured, and endangered the comfort, repose, health, and safety of others, including the 20 Tribes and their members. 21 293. Defendants’ acts and omissions offend decency. 294. Defendants’ acts and omissions render members of the Tribes insecure. 295. Defendants’ acts and omissions proximately caused injury to the Tribes and 22 23 24 25 their members including, inter alia, recoupment of governmental costs, flowing from an ongoing 26 and persistent public nuisance with the Tribes seek to abate. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 90 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 94 of 110 1 296. Defendants’ acts and omissions affect the entire communities of the Tribes. 2 297. Defendants also have a duty to abate the nuisance caused by the prescription 3 opioid epidemic. 4 298. Defendants have failed to abate the nuisance they created. 299. As a direct result of Defendants’ conduct, the Tribes and Tribes’ Communities 5 6 7 have suffered actual injury and economic damages including, but not limited to, significant 8 expenses for police, emergency, health, prosecution, child protection, corrections and other 9 services. 10 300. Logic, common sense, justice, policy, and precedent indicate Defendants’ 11 12 unfair and deceptive conduct has caused the damage and harm complained of herein. Defendants 13 knew or reasonably should have known that their statements regarding the risks and benefits of 14 opioids were false and misleading, and that their false and misleading statements were causing 15 harm from their continued production and marketing of opioids. Thus, the public nuisance caused 16 by Defendants to the Tribes was reasonably foreseeable, including the financial and economic 17 18 19 losses incurred by each of the Tribes. 301. In addition, engaging in any business in defiance of a law regulating or 20 prohibiting the same is a nuisance per se under Washington law. Each Defendant’s conduct 21 described herein of deceptively marketing opioids violates the Controlled Substances Act, RCW 22 7.48.010, RCW Chapter 69.50, RCW Chapter 69.41, and/or other provisions of Washington law 23 24 25 26 as will be shown in this litigation, and therefore constitutes a nuisance per se. 302. Defendants are liable to the Tribes for the costs borne by the Tribes as a result of the opioid epidemic and for the costs of abating the nuisance created and continued by 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 91 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 95 of 110 1 Defendants. 2 3 303. Pursuant to RCW 7.48.020, the Tribes each request an order providing for abatement of the public nuisance that each Defendant has created or assisted in the creation of, and 4 enjoining Defendants from future violations of RCW 7.48.010. 5 304. 6 7 8 9 Pursuant to the applicable law set forth above, the Tribes also seek the maximum statutory and civil penalties permissible by law. COUNT 2: VIOLATIONS OF THE WASHINGTON CONSUMER PROTECTION ACT RCW 19.86 et seq. Against All Defendants 10 305. The Tribes incorporate by reference all preceding paragraphs of this Complaint 11 12 as if fully set forth herein and further allege as follows. 306. 13 The Washington Consumer Protection Act is codified at RCW 19.86 et seq. 14 (CPA). The CPA establishes a comprehensive framework for redressing the violations of 15 applicable law, and any injured person or governmental entity can enforce the CPA and recover 16 damages. RCW 19.86.090. The conduct at issue in this case falls within the scope of the CPA. 17 307. 18 The CPA prohibits unfair methods of competition and unfair or deceptive acts 19 or practices in the conduct of any trade or commerce. Defendants engaged and continue to engage 20 in the same pattern of unfair methods of competition, and unfair and/or deceptive conduct pursuant 21 to a common practice of misleading the public regarding the purported benefits and risks of 22 opioids. 23 24 308. Defendants, at all times relevant to this Complaint, directly and/or through their 25 control of third parties, violated the CPA by making unfair and/or deceptive representations about 26 the use of opioids to treat chronic and non-cancer pain, including to physicians and consumers in 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 92 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 96 of 110 1 the Tribes. Each Defendant also omitted or concealed material facts and failed to correct prior 2 misrepresentations and omissions about the purported benefits and risks of opioids. In addition, 3 each Defendant’s silence regarding the full risks of opioid use constitutes deceptive conduct 4 prohibited by the CPA. 5 6 309. These unfair methods of competition and unfair and/or deceptive acts or 7 practices in the conduct of trade or commerce were reasonably calculated to deceive Plaintiffs and 8 their consumers, and did in fact deceive Plaintiffs and their consumers. Each Defendant’s 9 misrepresentations, concealments, and omissions continue to this day. 10 310. The Tribes have paid significant sums of money treating those covered by 11 12 tribally provided health insurance for opioid-related costs. Defendants’ misrepresentations have 13 further caused Plaintiffs to spend substantial sums of money on increased law enforcement, 14 emergency services, social services, public safety, health care and other human services, as 15 described above. 16 311. But for these unfair methods of competition and unfair and/or deceptive acts or 17 18 practices in the conduct of trade or commerce, the Tribes would not have incurred the significant 19 costs for harmful drugs with limited, if any, benefit, or the substantial costs related to the epidemic 20 caused by Defendants, as described above. 21 22 312. Logic, common sense, justice, policy, and precedent indicate Defendants’ unfair and deceptive conduct has caused the damage and harm complained of herein. Defendants 23 24 knew or reasonably should have known that their statements regarding the risks and benefits of 25 opioids were false and misleading, and that their statements were causing harm from their 26 continued production and marketing of opioids. Thus, the harm caused by Defendants’ unfair and 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 93 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 97 of 110 1 deceptive conduct was reasonably foreseeable, including the financial and economic losses 2 incurred by the Tribes. 3 313. As a direct and proximate cause of each the Defendant’s unfair and deceptive 4 conduct, (i) the Tribes have sustained and will continue to sustain injuries, and (ii) pursuant to 5 6 7 8 9 RCW 19.86.090, the Tribes are entitled to actual and treble damages in amounts to be determined at trial, attorneys’ fees and costs, and all other relief available under the CPA. 314. The Court should also grant injunctive relief enjoining Defendants from future violations of the CPA. Defendants’ actions, as complained of herein, constitute unfair competition 10 or unfair, deceptive, or fraudulent acts or practices in violation of the CPA. 11 COUNT 3: RACKETEER-INFLUENCED AND CORRUPT ORGANIZATIONS ACT, 18 U.S.C. § 1961 et seq. Against all Defendants 12 13 14 15 16 17 18 19 315. The Tribes incorporate by reference all preceding paragraphs of this Complaint as if fully set forth herein and further allege as follows. 316. Defendants conducted and continue to conduct their business through legitimate and illegitimate means in the form of an association-in-fact enterprise and/or a legal entity enterprise. At all relevant times, Defendants were “persons” under 18 U.S.C. § 1961(3) 20 21 22 because they are entities capable of holding, and do hold, a legal or beneficial interest in property. 317. For over a decade, the Defendants aggressively sought to bolster their revenue, 23 increase profit and grow their share of the prescription painkiller market by unlawfully and 24 surreptitiously increasing the volume of opioids they sold. However, the Defendants are not 25 26 27 permitted to engage in a limitless expansion of their market through the unlawful sales of regulated painkillers. As “registrants,” the Defendants operated and continue to operate within the closed HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 94 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 98 of 110 1 system created by the CSA. The CSA restricts the Defendants’ ability to manufacture or distribute 2 Schedule II controlled substances like opioids by requiring Defendants to maintain effective 3 controls against diversion, design and operate a system to identify suspicious orders and halt such 4 unlawful sales and report them to the DEA, and to make sales within a limited quota set by the 5 6 DEA. 318. 7 8 9 The closed system created by the CSA, including the establishment of quotas, was specifically intended to reduce or eliminate the diversion of Schedule II controlled substances, including opioids. 10 319. Finding it impossible to achieve their increasing sales ambitions through legal 11 12 means, the Defendants systematically and fraudulently violated their statutory duties to maintain 13 effective controls against diversion of their drugs, to design and operate a system to identify 14 suspicious orders of their drugs, to halt unlawful sales of suspicious orders and to notify the DEA 15 of suspicious orders. The Defendants repeatedly engaged in unlawful sales of painkillers, which, 16 in turn, artificially and illegally increased the annual production quotas for opioids allowed by the 17 18 19 DEA. 320. An association-in-fact enterprise between the Distributor Defendants and the 20 Pharmaceutical Defendants hatched this illegal scheme, and each Defendant participated in the 21 scheme’s execution, the purpose of which was to engage in the unlawful sale of opioids while 22 deceiving the public and regulators into believing that the Defendants were faithfully fulfilling 23 24 their obligations. As a direct result of the Defendants’ scheme, they were able to extract billions of 25 dollars in revenue while entities like the Tribes experienced millions of dollars in injuries caused 26 by the foreseeable—and inevitable—consequences of the opioid epidemic Defendants created. 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 95 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 99 of 110 321. 1 2 3 Alternatively, Defendants were also members of a legal entity enterprise. The Healthcare Distribution Alliance (“HDA”)123 is a distinct legal entity that qualifies as an enterprise under 18 U.S.C. § 1961(4). On information and belief, each Defendant is a member, participant, 4 and/or sponsor of the HDA. Defendants utilized the HDA to conduct the RICO Enterprise. Each 5 6 of the Defendants is a legal entity separate from the HDA. 322. 7 8 9 The RICO Enterprise: Congress enacted the CSA to create a closed system for distribution of controlled substances. Congress was concerned with the diversion of drugs out of legitimate channels of distribution. Moreover, Congress specifically designed the closed system 10 to ensure that there are multiple ways of identifying and preventing diversion. 11 323. 12 A central component of the closed system was Congress’s directive that the 13 DEA determine quotas of each basic class of Schedule I and Schedule II controlled substances 14 each year. 15 16 324. The Defendants operated as an association-in-fact to unlawfully increase sales and revenues in order to unlawfully increase the quotas set by the DEA, which in turn allowed 17 18 them to collectively profit from distributing a greater pool of opioids each year. Each member of 19 the Rico Enterprise participated in the conduct of the enterprise, including patterns of racketeering 20 activity, and shared in the astounding profits generated by the scheme. 21 22 325. The Defendants also engaged in lobbying efforts against the DEA’s authority to investigate and hold responsible those who failed in their duty to prevent diversion. The 23 24 25 26 Ensuring Patient Access and Effective Drug Enforcement Act was the result of an effort by the 123 Health Distribution Alliance, History, Health Distribution Alliance, https://www.healthcaredistribution.org/about/hda-history (last accessed Feb. 27, 2018). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 96 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 100 of 110 1 Defendants to reduce the DEA’s ability to issue orders to show cause and to suspend and/or revoke 2 registrations. On information and belief, the Pain Care Forum and its members poured millions of 3 dollars into lobbying efforts while the HDA devoted over a million dollars a year to lobbying. 4 326. The RICO Enterprise functioned by selling prescription opioids in interstate 5 6 7 commerce in violation of the Defendants’ legal obligations to maintain effective controls against opioid diversion. 8 9 327. Each Defendant communicated with other Defendants, shared information on a regular basis, and participated in joint lobbying efforts, trade industry organizations, contractual 10 relationships, and other coordination of activities to effect the RICO Scheme. The contractual 11 12 relationships included, on information and belief, rebates and/or chargebacks on opioid sales and 13 security arrangements. All told, from 2006 to 2015, the Defendants worked together through the 14 Pain Care Forum to spend over $740 million in lobbying across the country to enable the RICO 15 Enterprise.124 16 328. The Defendants disseminated false and misleading statements to the public 17 18 regarding the safety of prescription opioids for chronic pain relief. The Defendants also falsely 19 disseminated statements that they were complying with their obligations to maintain effective 20 controls against the diversion of their prescription opioids. 21 22 329. The Defendants refused to identify, investigate, or report suspicious orders despite their actual knowledge of drug diversion rings. 23 330. 24 25 26 The Defendants worked together to ensure that opioid production quotas 124 See Matthew Perrone, Pro-Painkiller echo chamber shaped policy amid drug epidemic, The Center for Public Integrity, https://www.publicintegrity.org/2016/09/19/20201/pro-painkiller-echo-chamber-shaped-policy-amid-drugepidemic (last accessed Feb. 27, 2018). 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 97 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 101 of 110 1 2 3 4 continued to increase, allowing them to generate more and more profits from the RICO Enterprise. 331. The RICO Scheme participants took intentional and affirmative steps to conceal the Scheme, including by using unbranded advertisement, third parties, and the Front Groups to disguise the source of the participants’ fraudulent statements and to increase the effectiveness of 5 6 7 8 9 the participants’ misinformation campaign. These actions were taken to ensure that the RICO Scheme continued to be effective. 332. The pattern of racketeering activity. Each time that a participant in the RICO Scheme distributed a false statement by mail or wire, it committed a separate act of mail fraud or 10 wire fraud under 18 U.S.C. §§ 1341 and 1341, respectively. 11 12 333. The Defendants used, or caused to be used, thousands of interstate mail and 13 wire communications through which Defendants sent virtually uniform misrepresentations, 14 concealments, and material omissions regarding the safety of opioids and their compliance with 15 the CSA’s anti-diversion requirements. The Defendants committed this continuous pattern of 16 racketeering activity intentionally and knowingly with the intent to advance the RICO Enterprise. 17 18 334. The Defendants also conducted a pattern of racketeering by the felonious 19 manufacture, importation, receiving, concealment, buying, selling or otherwise dealing in a 20 controlled substance punishable under any law of the United States. Specifically, 21 U.S.C. § 21 843(a)(4) makes it unlawful for any person to knowingly or intentionally furnish false information 22 or omit any material information from any application, report, record or other document required 23 24 25 26 to be made, kept, or filed, a violation of which is a felony. 335. Each of the Defendants was a registrant under the CSA and was required to maintain effective diversion controls and investigate and report suspicious orders. The Defendants 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 98 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 102 of 110 1 knowingly and routinely furnished false, misleading, or incomplete information in their reports to 2 the DEA and in their applications for production quotas. 3 336. As described herein, the Defendants did unlawfully, knowingly, and 4 intentionally conspire, confederate, and agree with each other to engage in the scheme described 5 6 7 8 9 10 herein, in violation of 18 U.S.C. § 1962(c) and (d). 337. As a result of the conduct by the Defendants, the Tribes have been and continue to be injured in an amount to be determined in this litigation. 338. Pursuant to 18 U.S.C. § 1964(c), the Tribes are entitled to recover threefold their damages, costs, and attorney’s fees. In addition, the Tribes are entitled to injunctive relief to 11 12 enjoin the racketeering activity. COUNT 4: LANHAM ACT 15 U.S.C. § 1125(a)(1)(B) Against the Pharmaceutical Defendants 13 14 15 16 339. The Tribes incorporate by reference all preceding paragraphs of this Complaint as if fully set forth herein and further allege as follows. 17 340. The Lanham Act provides, in pertinent part: 18 19 20 21 22 23 (1) Any person who, on or in connection with any good or services, or any container for goods, uses in commerce any word, terms, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of face, which-... (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. 24 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 99 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 103 of 110 341. 1 2 3 As alleged in Paragraphs 50 to 260 of this Complaint, the Pharmaceutical Defendants committed repeated and willful unfair or deceptive acts or practices, and unconscionable trade practices, in connection with the sale of goods and services. 4 342. The Pharmaceutical Defendants engaged in a false and misleading advertising 5 6 campaign designed to deceive doctors and the public into believing that opioids were safe for the 7 treatment of chronic pain. 8 343. 9 The Tribes are entitled to legal and equitable relief, including injunctive relief, disgorgement of profits, and damages in an amount to be determined in this litigation. 10 COUNT 5: FRAUD Against All Defendants 11 12 13 344. The Tribes incorporate by reference all preceding paragraphs of this Complaint as if fully set forth herein and further allege as follows. 14 345. 15 16 fact, as more fully described in Paragraphs 50 to 260 of this Complaint. 17 18 The Defendants made fraudulent misrepresentations and omissions of material 346. Those misrepresentations and omissions were known to be untrue by the Defendants, or were recklessly made. 19 347. The Defendants made those misrepresentations and omissions in an intentional 20 21 effort to deceive and to induce doctors and patients to prescribe and use prescription opioids for 22 chronic pain relief, despite the Defendants’ knowledge of the dangers of such use of prescription 23 opioids. 24 25 26 27 348. The Defendants continued making those misrepresentations, and failed to correct those material omissions, despite repeated regulatory settlements and publications demonstrating the false nature of the Defendants’ claims. HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 100 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 104 of 110 1 2 3 349. Doctors, including those serving the Tribes and their members, relied on the Defendants’ misrepresentations and omissions in prescribing opioids for chronic pain relief. 350. Patients, including members of the Tribes, relied on the Defendants’ 4 misrepresentations and omissions in taking prescription opioids for chronic pain relief. 5 6 7 351. The Tribes have been damaged by the Defendants’ misrepresentations in an amount to be determined in this litigation. COUNT 6 – NEGLIGENCE Against All Defendants 8 9 10 11 12 13 352. The Tribes incorporate by reference all preceding paragraphs of this Complaint as if fully set forth herein and further allege as follows. 353. Under Washington law, a cause of action arises for negligence when a defendant owes a duty to a plaintiff and breaches that duty, and proximately causes the resulting 14 15 16 injury. Iwai v. State Employment Sec. Dep't, 129 Wn. 2d 84, 96 (1996). 354. Each Defendant owed and owes a duty of care to the Port Gamble S’Klallam 17 Tribe, the Suquamish Tribe, and the Jamestown S’Klallam Tribe, including, but not limited to, 18 taking reasonable steps to prevent the misuse, abuse, and over-prescription of opioids. 19 355. In violation of this duty, Defendants failed to take reasonable steps to prevent 20 21 22 23 24 25 the misuse, abuse, and over-prescription of opioids in the Tribes and their communities by misrepresenting the risks and benefits associated with opioids. 356. As set forth above, Defendants’ misrepresentations include falsely claiming that the risk of opioid addiction was low; falsely instructing doctors and patients that prescribing more opioids was appropriate when patients presented symptoms of addiction; falsely claiming 26 27 that risk-mitigation strategies could safely address concerns about addiction; falsely claiming that HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 101 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 105 of 110 1 doctors and patients could increase opioid usage indefinitely without added risk; deceptively 2 marketing that purported abuse-deterrent technology could curb misuse and addiction, and falsely 3 claiming that long-term opioid use could actually restore function and improve a patient’s quality 4 of life. Each of these misrepresentations made by Defendants violated the duty of care to the 5 6 Tribes. 357. 7 8 9 As a direct and proximate cause of Defendants’ unreasonable and negligent conduct, the Tribes have suffered and will continue to suffer harm, and are entitled to damages in an amount determined at trial. 10 COUNT 7 – GROSS NEGLIGENCE Against All Defendants 11 12 13 358. The Tribes incorporate by reference all preceding paragraphs of this Complaint as if fully set forth herein and further allege as follows. 14 359. 15 As set forth above, each Defendant owed and owes a duty of care to the Port 16 Gamble S’Klallam Tribe, the Suquamish Tribe, and the Jamestown S’Klallam Tribe including, 17 but not limited to, taking reasonable steps to prevent the misuse, abuse, and over-prescription of 18 opioids. 19 360. In violation of this duty, each Defendant failed to take reasonable steps to 20 21 22 23 24 25 prevent the misuse, abuse, and over-prescription of opioids in the Tribes and their communities by misrepresenting the risks and benefits associated with opioids. 361. In addition, each Defendant knew or should have known, and/or recklessly disregarded, that the opioids they manufactured, promoted, and distributed were being used for unintended uses. 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 102 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 106 of 110 1 362. For instance, Defendants failed to exercise slight care to the Tribes by, inter 2 alia, failing to take appropriate action to stop opioids from being used for unintended purposes. 3 Furthermore, despite each Defendant’s actual or constructive knowledge of the wide proliferation 4 and dissemination of opioids in the Tribes and their communities, Defendants took no action to 5 6 7 8 9 prevent the abuse and diversion of their pharmaceutical drugs. 363. Defendants’ misrepresentations further include falsely claiming that the risk of opioid addiction was low; falsely instructing doctors and patients that prescribing more opioids was appropriate when patients presented symptoms of addiction; falsely claiming that risk 10 mitigation strategies could safely address concerns about addiction; falsely claiming that doctors 11 12 and patients could increase opioid usage indefinitely without added risk; deceptively marketing 13 that purported abuse-deterrent technology could curb misuse and addiction; and falsely claiming 14 that long-term opioid use could actually restore function and improve a patient’s quality of life. 15 Each of these misrepresentations made by Defendants violated the duty of care to the Tribes, and 16 in a manner that is substantially and appreciably greater than ordinary negligence. 17 18 364. As a direct and proximate cause of each Defendant’s gross negligence, 19 Plaintiffs have suffered and will continue to suffer harm, and are entitled to damages in an amount 20 determined at trial. 21 COUNT 8: NEGLIGENCE PER SE Against all Defendants 22 23 24 25 365. The Tribes incorporate by reference all preceding paragraphs of this Complaint as if fully set forth herein and further allege as follows. 366. All Defendants were obligated to prevent the diversion of prescription opioids 26 27 under the CSA and its implementing regulations. HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 103 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 107 of 110 367. 1 2 The CSA and its implementing regulations were enacted to promote safety and to prevent exactly the type of harm that occurred as a result of Defendants’ failures. 3 368. All Defendants failed to perform their statutory and regulatory obligations 4 under the CSA. 5 369. 6 Washington law prescribes strict control of prescribed medicines (in RCW 7 Chapter 69.41) and of controlled substances (in RCW Chapter 69.50) in order to prevent diversion 8 of drugs, drug abuse, and the improper trade of drugs in the State for reasons of safety and public 9 health. 10 370. Washington’s statutes were enacted to promote safety and prevent the type of 11 12 13 14 15 16 harm that occurred as a result of Defendants’ failures. 371. All Defendants engaged in misrepresentation and fraud, and aided and abetted the use of misrepresentation and fraud, in the distribution of prescription opioids in Washington. 372. Defendants’ breaches of their duty of care foreseeably and proximately caused damage to the Tribes. 17 18 19 373. The Tribes are entitled to damages from Defendants in an amount to be determined in this litigation. 20 COUNT 9: UNJUST ENRICHMENT Against all Defendants 21 22 23 24 25 374. as if fully set forth herein and further allege as follows. 375. Defendants received a benefit in the form of billions of dollars in revenue from the sale of prescription opioids to treat chronic pain. 26 27 The Tribes incorporate by reference all preceding paragraphs of this Complaint 376. Defendants were aware they were receiving that benefit. Defendants’ conduct HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 104 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 108 of 110 1 2 3 was designed to bring about that benefit. 377. Defendants retained that benefit at the expense of the Tribes, who have borne— and who continue to bear—the economic and social costs of Defendants’ scheme. 4 378. It is inequitable for the Defendants to retain that benefit without paying for it. 379. The Tribes are entitled to recover from Defendants’ prescription opioid profits 5 6 7 the amounts the Tribes have spent and will have to spend in the future to address the effects of 8 Defendants’ actions. 9 COUNT 10: CIVIL CONSPIRACY Against all Defendants 10 11 12 13 380. The Tribes incorporate by reference all preceding paragraphs of this Complaint as if fully set forth herein and further allege as follows. 381. The Defendants agreed to engage in a campaign to flood the market with false 14 15 16 17 18 19 and misleading information about the safety of prescription opioid use for the treatment of chronic pain, to evade controls on opioid diversion, and to increase opioid quotas. 382. The Defendants did so in an effort to profit off the increased sales of prescription opioids. 383. Each Defendant made false or misleading statements directly and through third 20 21 22 23 parties to further the objectives of their conspiracy. 384. The Tribes were directly and proximately harmed by the Defendants’ civil conspiracy in an amount to be determined in this litigation. 24 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 105 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 109 of 110 PRAYER FOR RELIEF 1 2 3 WHEREFORE, the Tribes respectfully request judgment in their favor granting the following relief: 4 a) Entering Judgement in favor of the Tribes in a final order against each of the Defendants; b) An Order that the conduct alleged herein violates the Washington CPA and that Tribes are entitled to treble damages pursuant to the Washington CPA; c) An award of actual and consequential damages in an amount to be determined at trial; d) An award of all damages resulting from Defendants’ violation of 18 U.S.C. § 1962(c) and (d), including prejudgment interest, the sum trebled pursuant to 18 U.S.C. § 1962(c); e) An Order obligating Defendants to disgorge all revenues and profits derived from their scheme; f) An Order ordering that Defendants compensate the Tribes for past and future costs to abate the ongoing public nuisance caused by the opioid epidemic; g) An Order ordering Defendants to fund an “abatement fund” for the purposes of abating the public nuisance; h) An award of the damages caused by the opioid epidemic, including (a) costs for providing medical care, additional therapeutic and prescription drug purchases, and other treatments for patients suffering from opioid-related addiction or disease, including overdoses and deaths; (b) costs for providing treatment, counseling, and rehabilitation services; (c) costs for providing treatment of infants born with opioid-related medical conditions; (d) costs for providing care for children whose parents suffer from opioid-related disability or incapacitation; and (e) costs associated with law enforcement and public safety relating to the opioid epidemic; 22 i) An award of punitive damages; 23 j) Injunctive relief prohibiting Defendants from continuing their wrongful conduct; 24 k) An award of the Tribes’ costs, including reasonable attorney’s fees, pursuant to 18 U.S.C. § 1964(c) and/or any applicable provision of law, including the Washington CPA; l) Pre- and post-judgment interest as allowed by law; and 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 106 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Case 3:18-cv-05173 Document 1 Filed 03/05/18 Page 110 of 110 1 m) Any other relief deemed just, proper, and/or equitable. 2 3 PLAINTIFFS DEMAND A JURY TRIAL ON ALL CLAIMS SO TRIABLE 4 5 DATED: March 5, 2018 HOBBS, STRAUS, DEAN & WALKER LLP 6 7 By: ______________________________________ s/ Edmund C. Goodman s/ Geoffrey D. Strommer Edmund C. Goodman (WSBA # 37347) Geoffrey D. Strommer (WSBA # 43308) (application pending) 8 9 10 516 SE Morrison Street, Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072 Email: egoodman@hobbsstraus.com Email: gstrommer@hobbsstraus.com 11 12 13 14 Attorneys for Plaintiffs Port Gamble S’Klallam Tribe, Suquamish Tribe, and Jamestown S’Klallam Tribe. 15 16 17 18 19 20 21 22 23 24 25 26 27 HOBBS, STRAUS, DEAN & WALKER LLP COMPLAINT - 107 516 SE Morrison St., Suite 1200 Portland, OR 97214 Phone: (503) 242-1745 Fax: (503) 242-1072