Marc D. Grossman, Esq. # 042551993 Vicki J. Maniatis, Esq. #013211994 Sanders Phillips Grossman, LLC Attorneys for Plaintiff Mailing Address: 100 Garden City Plaza, Suite 500 Garden City, NY 11530 50 Main Street Hackensack, NJ 07601 Ph: (516) 741-5600 Fx: (516) 741-0128 mgrossman@thesandersfirm.com vmaniatis@thesandersfirm.com Eisbrouch Marsh, LLC David Eisbrouch, Esq. # 012361989 50 Main Street Hackensack, NJ 07601 Ph: (201) 342-5545 david@emlawoffices.com SUPERIOR COURT OF NEW JERSEY LAW DIVISION: HUDSON COUNTY COUNTY OF HUDSON, NEW JERSEY, Plaintiff, DOCKET NO.:________________________ v. PURDUE PHARMA L.P.; PURDUE PHARMA, INC.; THE PURDUE FREDERICK COMPANY, INC.; DR. RICHARD SACKLER; ESTATE OF MORTIMER SACKLER; ESTATE OF RAYMOND SACKLER; ABBOTT LABORATORIES; ABBOTT LABORATORIES, INC.; TEVA PHARMACEUTICAL INDUSTRIES, LTD.; TEVA PHARMACEUTICALS USA, INC.; CEPHALON, INC.; JOHNSON & JOHNSON; JANSSEN PHARMACEUTICALS, INC.; ORTHO-MCNEIL-JANSSEN PHARMACEUTICALS, INC. n/k/a JANSSEN PHARMACEUTICALS, INC.; JANSSEN PHARMACEUTICA INC. n/k/a JANSSEN PHARMACEUTICALS, INC.; NORAMCO, INC.; ENDO HEALTH SOLUTIONS INC.; ENDO CIVIL ACTION CASE NO.: COMPLAINT AND DEMAND FOR JURY TRIAL 1 PHARMACEUTICALS, INC.; ALLERGAN PLC f/k/a ACTAVIS PLS; ALLERGAN USA INC.; WATSON PHARMACEUTICALS, INC. n/k/a ACTAVIS, INC.; WATSON LABORATORIES, INC.; ACTAVIS LLC; ACTAVIS PHARMA, INC. f/k/a WATSON PHARMA, INC.; MALLINCKRODT PLC; MALLINCKRODT LLC; AMERISOURCEBERGEN DRUG CORPORATION; CARDINAL HEALTH, INC.; MCKESSON CORPORATION; INSYS THERAPEUTICS, INC.; JOHN N. KAPOOR; RUSSELL PORTENOY, M.D.; PERRY FINE, M.D.; SCOTT FISHMAN; LYNN WEBSTER, M.D.; AMERICAN PAIN FOUNDATION; THE ACADEMY OF INTEGRATIVE PAIN MANAGEMENT F/K/A AMERICAN ACADEMY OF PAIN MANAGEMENT; THE AMERICAN ACADEMY OF PAIN MANAGEMENT; CVS HEALTH CORPORATION; WALGREENS BOOTS ALLIANCE, INC.,; WALGREENS EASTERN CO., INC.; RITE AID CORPORATION; WAL-MART STORES EAST, LP; WAL-MART STORES EAST, INC.; ABC CORPORATIONS 1-100 ENGAGED IN THE MANUFACTURING OF OPIOIDS; ABC CORPORATIONS 1-100 ENGAGED IN THE DISTRIBUTION OF OPIOIDS; AND ABC CORPORATIONS 1100; JANE AND JOHN DOES 1-100, Defendants. NOW COMES the Plaintiff, the County of Hudson, New Jersey (“Plaintiff,” “County,” or “Hudson”), by and through its attorneys, for its Complaint against Defendants Purdue Pharma L.P.; Purdue Pharma Inc.; the Purdue Frederick Company, Inc.; Dr. Richard Sackler; Estate of Mortimer Sackler; Estate of Raymond Sackler; Abbott Laboratories; Abbott Laboratories, Inc.; Teva Pharmaceutical Industries, Ltd.; Teva Pharmaceuticals USA, Inc.; Cephalon, Inc.; Johnson & Johnson; Janssen Pharmaceuticals, Inc.; Janssen Pharmaceuticals, Inc. n/k/a Janssen 2 Pharmaceuticals, Inc.; Ortho-McNeil-Janssen Pharmaceuticals, Inc. n/k/a Janssen Pharmaceuticals, Inc.; Noramco, Inc.; Endo Health Solutions Inc.; Endo Pharmaceuticals, Inc.; Allergan PLC f/k/a Actavis PLC; Allergan USA Inc.; Actavis, Inc. f/k/a Watson Pharmaceuticals, Inc.; Watson Laboratories, Inc.; Actavis LLC; Actavis Pharma, Inc. f/k/a Watson Pharma, Inc.; Insys Therapeutics, Inc.; John N. Kapoor; Mallinckrodt PLC; Mallinckrodt LLC; ABC Corporations 1-100 Engaged in the Manufacturing of Opioids (collectively, “Manufacturers,” “Manufacturer Defendants,” or “Defendants”); McKesson Corporation, Cardinal Health Inc., Amerisourcebergen Drug Corporation; ABC Corporations 1-100 Engaged in the Distribution of Opioids (Collectively, “Distributors,” “Distributor Defendants,” or “Defendants”) Russell Portenoy; Perry Fine; Scott Fishman; and Lynn Webster; (collectively, “Physicians,” “Physician Defendants,” or “Defendants”); CVS Health Corporation; Walgreens Boots Alliance, Inc.,; Walgreen Eastern Co., Inc.; Rite Aid Corporation; Wal-Mart Stores East, LP; Wal-Mart Stores East, Inc.; ABC Corporations 1-100 (collectively, “Pharmacies,” “Retainers,” “Pharmacy Defendants,” “Retailer Defendants,” or “Defendants”); American Pain Foundation; Academy of Integrative Pain Management f/k/a American Academy of Pain Management; American Academy of Pain Management; and Jane And John Does 1-100 (all Defendants collectively, “Defendants”) alleges as follows: INTRODUCTION 1. From the time morphine was first isolated for medicinal use, physicians have understood that opioids are risky medications that leave patients prone to addiction and overdose. That is why heroin was made illegal in 1924, and it is why the first synthetic opioids (Percocet and Vicodin) were prescribed only for short-term pain. 2. But after Purdue created and patented oxycodone in the 1990s, at the instance and direction of Richard, Mortimer, and Raymond Sackler, it marketed the drug as safe, non3 addictive, and appropriate for chronic pain—even though it had no legitimate scientific evidence to support these claims. And as other opioid manufacturers likewise invented proprietary opioid formulations, they also marketed their drugs as safe, non-addictive, and appropriate for chronic pain. 3. The opioid manufacturers ran a decades-long misinformation campaign to convince doctors and patients everywhere that prescription opioids are a miracle cure for chronic pain, and should be prescribed widely—whether to treat recurring pain from work injuries, joint pain from arthritis, or neck pain resulting from a car accident. 4. To win over those who might be skeptical of the drug makers’ claims, the manufacturers hired well-regarded doctors, who styled themselves as pain management experts, to advocate for use of opioids all across the country. They also sponsored “pain advocacy” groups, which acted as fronts for the drug companies’ message. These same tactics were used by cigarette manufacturers, who used industry-funded scientists and front groups to try to convince the public that cigarettes were safe, despite a wealth of scientific evidence to the contrary. 5. Doctors believed the misinformation that was carefully and systematically presented to them over the years. Believing that the opioids were indeed safe and effective for chronic pain, doctors prescribed the opioid manufacturers’ products in larger and larger numbers resulting in billions of dollars for Purdue and its top executives—including, Richard, Mortimer, and Raymond Sackler. 6. Meanwhile, the opioid manufacturers knew that their claims lacked scientific basis and that, in fact, their prescription opioids were highly addictive and ultimately ineffective at treating long-term pain. Pain patients develop tolerance to the drugs over time and are forced 4 to take stronger and stronger doses, until they become so sedated that they risk falling asleep at the wheel of their car or having their central nervous system (and breathing) shut down. 7. As doctors prescribed more and more prescription opioids, and the manufacturers continued to conceal and obscure the truth about their drugs, the rates of opioid addiction and overdose skyrocketed. Addicted individuals spent their life savings fueling their drug addiction and were often forced to switch to a cheaper opioid: heroin. Rates of heroin addiction skyrocketed as well. 8. Rather than seeing a national crisis, pharmaceutical distributors saw an opportunity for massive profits. They sent prescription opioids to any and every prescriber or pharmacy that placed orders, even though they are required by to stop shipment on suspicious orders and report them to law enforcement. Stopping suspicious shipments would mean losing out on millions of dollars in illicit profits, and so the opioid distributors did nothing. They stood aside and allowed select prescribers and pharmacies to divert massive amounts of prescription opioids into the black market. 9. The opioid epidemic has enriched both opioid manufacturers and distributors. But it has destroyed community, and left state and local governments to bear much of the costs. For example, state-funded healthcare costs surged as overdose patients were increasingly admitted to emergency rooms across the country. So did law-enforcement and criminal-justice costs, as police and jails struggled to cope with an increased number of drug offenders. And as addicted parents are unable to care for their children, the government has often been forced to pay the cost of raising them. 5 10. It is time that the opioid manufacturers and distributors begin paying for the havoc they have wrought. Plaintiff brings this lawsuit to enjoin Defendants’ illegal conduct and to hold Defendants responsible for the harm that conduct has caused the Plaintiff. PARTIES A. 11. PLAINTIFF The County of Hudson, New Jersey (“County”) is a governmental entity formed as a County within, and in accordance with, the laws of the State of New Jersey, with a population of approximately 677,983 people. 12. Hudson County brings this action on its own behalf and in the public interest on behalf of its residents B. DEFENDANTS 1. 13. Opioid Manufacturers The defendants within this subsection will be referred to throughout as the “Opioid Manufacturers.” Purdue Defendants 14. Purdue Pharma L.P. is a limited partnership that is organized under the laws of Delaware with headquarters in Stamford, Connecticut and offices in Cranbury, New Jersey and Ewing, New Jersey, facilities in Totowa, New Jersey and is licensed by the New Jersey Department of Health to operate as a drug manufacturer and distributor. 15. Purdue Pharma Inc. is a New York corporation with its principal place of business in Stamford, Connecticut. 16. The Purdue Frederick Company is a Delaware corporation with its principal place of business in Stamford, Connecticut. The company is registered with New Jersey to do business in New Jersey. 6 17. Purdue is privately held by the Sackler family–one of America’s wealthiest families with a collective net worth of thirteen billion dollars. 18. Defendant Dr. Richard Sackler (“Dr. Sackler”) is a board member and the former President and Co-Chairman of Purdue Pharma L.P. Dr. Sackler is the named inventor on multiple patents directed toward the opioids at issue in the opioid addiction epidemic. 19. Defendant Estate of Mortimer Sackler (“Estate of M. Sackler”) was co-CEO of Purdue Pharma during the crucial period of OxyContin’s development and promotion. 20. Defendant the Estate of Raymond Sackler (“Estate of R. Sackler”) was co-CEO of Purdue Pharma during the crucial period of OxyContin’s development and promotion. 21. The Purdue defendants will be referred to collectively as “Purdue.” 22. Purdue manufactures, promotes, sells, and distributes opioids, such as OxyContin, MS Contin, Dilaudid/Dilaudid HP, Butrans, Hysingla ER, and Targiniq ER, in the United States. OxyContin is Purdue’s best-selling opioid. Since 2009, Purdue’s annual sales revenue from OxyContin in the U.S. has fluctuated between $2.47 billion and $2.99 billion. The sales revenue from OxyContin has quadrupled since 2006. OxyContin constitutes roughly 30% of the entire market for analgesic drugs (painkillers). Abbott Laboratories 23. Abbott Laboratories, Inc. is a corporation organized under the laws of Illinois. Abbott Laboratories is an Illinois corporation with its principal place of business in Abbott Park, Illinois, and Abbott Laboratories, Inc. is a Illinois corporation with its principal place of business in Abbott Park, Illinois (collectively, “Abbott”). Abbott Laboratories is licensed and registered with the New Jersey Secretary of State to do business in New Jersey. 7 24. Abbott was primarily engaged in the promotion, and distribution of opioids nationally, in the State of New Jersey, and in Hudson County, due to a co-promotional agreement with Defendant Purdue. Pursuant to that agreement, beginning in 1996, Abbott began actively promoting, marketing and distributing Purdue’s opioid products. 25. Abbott, as part of the co-promotional agreement, helped make OxyContin into the largest-selling opioid in the nation. Under the co-promotional agreement with Purdue, the more Abbott generated in sales, the higher the reward. Specifically, Abbott received 25 to 30 percent of all net sales for prescriptions written by doctors its sales force called on. 26. In 2012, Abbott spun off the company’s branded drug business, naming the new company AbbVie, Inc. Cephalon Defendants 27. Cephalon Inc. is a Delaware corporation with its principal place of business in Frazer, Pennsylvania, and is registered with the New Jersey Secretary of State to do business in New Jersey. The company is licensed by the New Jersey Department of Health to manufacture, label, repackage, or distribute prescription drugs and controlled substances in New Jersey. 28. 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. 29. Teva Pharmaceuticals USA, Inc. (“Teva USA”) is a Delaware corporation with its principal place of business in North Wales, Pennsylvania, and is registered with the New Jersey Secretary of State to do business in New Jersey. Teva USA is licensed by the New Jersey Department of Health to distribute prescription drugs and controlled substances in New Jersey. Teva USA is a wholly owned subsidiary of Teva Ltd. 8 30. Cephalon, Inc. manufactures, promotes, sells, and distributes opioids such as Actiq and Fentora in the United States. Actiq has been approved by the FDA only for the “management of breakthrough cancer pain in patients 16 years and older with malignancies who are already receiving and who are tolerant to around-the-clock opioid therapy for the underlying persistent cancer pain.”1 Fentora has been approved by the FDA only for the “management of breakthrough pain in cancer patients 18 years of age and older who are already receiving and who are tolerant to around-the-clock opioid therapy for their underlying persistent cancer pain.”2 In 2008, Cephalon pled guilty to a criminal violation of the Federal Food, Drug and Cosmetic Act for its misleading promotion of Actiq and two other drugs, and agreed to pay $425 million.3 31. Teva Ltd., Teva USA, and Cephalon, Inc. work together closely to market and sell Cephalon products in the United States. Teva Ltd. conducts all sales and marketing activities for Cephalon in the United States through Teva USA and has done so since its October 2011 acquisition of Cephalon. Teva Ltd. and Teva USA hold out Actiq and Fentora as Teva products to the public. Teva USA sells all former Cephalon branded products through its “specialty medicines” division. The FDA-approved prescribing information and medication guide, which is distributed with Cephalon opioids, discloses that the guide was submitted by Teva USA, and directs physicians to contact Teva USA to report adverse events. 32. All of Cephalon’s promotional websites, including those for Actiq and Fentora, display Teva Ltd.’s logo.4 Teva Ltd.’s financial reports list Cephalon’s and Teva USA’s sales as 1 Highlights of Prescribing Information, ACTIQ® (fentanyl citrate) oral transmucosal lozenge, CII, FDA (2009), https://www.accessdata.fda.gov/drugsatfda_docs/label/2009/020747s030lbl.pdf. 2 Highlights of Prescribing Information, FENTORA® (fentanyl citrate) buccal tablet, CII (2011), FDA https://www.accessdata.fda.gov/drugsatfda_docs/label/2012/021947s015lbl.pdf. 3 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. 4 E.g., ACTIQ, http://www.actiq.com/ (displaying logo at bottom-left). 9 its own, and its year-end report for 2012 – the year immediately following the Cephalon acquisition – attributed a 22% increase in its specialty medicine sales to “the inclusion of a full year of Cephalon’s specialty sales,” including inter alia sales of Fentora®.5 Through interrelated operations like these, Teva Ltd. operates in the United States through its subsidiaries Cephalon and Teva USA. The United States is the largest of Teva Ltd.’s global markets, representing 53% of its global revenue in 2015, and, were it not for the existence of Teva USA and Cephalon, Inc., Teva Ltd. would conduct those companies’ business in the United States itself. Teva Ltd. directs the business practices of Cephalon and Teva USA, and their profits inure to the benefit of Teva Ltd. as controlling shareholder. 33. Teva Pharmaceutical Industries, Ltd., Teva Pharmaceuticals USA, Inc., and Cephalon, Inc. will be referred to collectively as “Cephalon.” Janssen Defendants 34. Janssen Pharmaceuticals, Inc. is a Pennsylvania corporation with its principal place of business in Titusville, New Jersey. Janssen Pharmaceuticals, Inc. is licensed by the New Jersey Department of Health to distribute prescription drugs and controlled substances in New Jersey. Janssen Pharmaceuticals, Inc. is a wholly owned subsidiary of Johnson & Johnson (“J&J”), a New Jersey corporation with its principal place of business in New Brunswick, New Jersey. 35. Noramco, Inc. (“Noramco”) is a Delaware company headquartered in Wilmington, Delaware. Noramco is licensed by the New Jersey Department of Health as a manufacturer or repackager/labeler of prescription drugs and controlled substances. Noramco was a wholly owned subsidiary of J&J until July 2016. 5 Teva Ltd., Annual Report (Form 20-F) 62 (Feb. 12, 2013), http://annualreports.com/HostedData/AnnualReportArchive/t/NASDAQ_TEVA_2 012.pdf. 10 36. Ortho-McNeil-Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica, Inc. are companies that are now known as “Janssen Pharmaceuticals, Inc.” 37. J&J is the only company that owns more than 10% of Janssen Pharmaceuticals, Inc.’s stock, and corresponds with the FDA regarding Janssen Pharmaceuticals, Inc.’s products. J&J controls the sale and development of Janssen Pharmaceuticals, Inc.’s drugs, and Janssen Pharmaceuticals, Inc.’s profits inure to J&J’s benefit. 38. Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., Janssen Pharmaceutica, Inc., Noramco, and J&J will be referred to collectively as “Janssen.” 39. Janssen manufactures, promotes, sells, and distributes drugs in the United States, including the opioid Duragesic (fentanyl). Before 2009, Duragesic accounted for at least $1 billion in annual sales. Until January 2015, Janssen developed, marketed, and sold the opioids Nucynta (tapentadol) and Nucynta ER. Together, Nucynta and Nucynta ER accounted for $172 million in sales in 2014. Endo Defendants 40. Endo Health Solutions Inc. is a Delaware corporation with its principal place of business in Malvern, Pennsylvania. 41. Endo Pharmaceuticals Inc. is a Delaware corporation with its principal place of business in Malvern, Pennsylvania. Endo Pharmaceuticals Inc. is a wholly owned subsidiary of Endo Health Solutions Inc. Endo Pharmaceuticals Inc. is registered with the New Jersey Secretary of State to do business in New Jersey, and is licensed by the New Jersey Department of Health to distribute prescription drugs and controlled substances in New Jersey. 42. Endo Health Solutions Inc. and Endo Pharmaceuticals Inc. will be referred to collectively as “Endo.” 11 43. Endo develops, markets, and sells prescription drugs, including the opioids Opana/Opana ER, Percodan, Percocet, and Zydone, in the United States. Opioids made up roughly $403 million of Endo’s overall revenues of $3 billion in 2012. Opana ER yielded $1.15 billion in revenue from 2010 to 2013, and it accounted for 10% of Endo’s total revenue in 2012. Endo also manufactures and sells generic opioids such as oxycodone, oxymorphone, hydromorphone, and hydrocodone products in the United States, by itself and through its subsidiary, Qualitest Pharmaceuticals, Inc. Allergan/Actavis Defendants 44. Allergan plc is a public limited company incorporated in Ireland with its principal place of business in Dublin, Ireland. According to their website, Allergan also has a headquarters in the United States under the name Allergan USA, Inc., which is headquartered in Madison, New Jersey. Allergan plc is the product of a few acquisitions and mergers. In March 2015, Allergan plc was acquired by Actavis plc, and the combined company took the name “Allergan plc.” Actavis plc was itself the product of an acquisition: in October 2012, Watson Pharmaceuticals, Inc.’s acquired Actavis, Inc., and the combined company adopted the name “Actavis plc.” 45. Watson Laboratories, Inc. is a Nevada corporation with its principal place of business in Corona, California, and is registered with the New Jersey Secretary of State to do business in New Jersey. Watson Laboratories, Inc. is a wholly-owned subsidiary of Allergan plc. 46. Actavis Pharma, Inc. is a Delaware corporation with its principal place of business in New Jersey. Actavis Pharma, Inc. is registered with the New Jersey Secretary of State to do business in New Jersey, and is licensed by the New Jersey Department of Health as a 12 distributor of prescription drugs and controlled substances. Actavis Pharma, Inc. was formerly known as Watson Pharma, Inc. 47. Actavis LLC is a Delaware limited liability company with its principal place of business in Parsippany, New Jersey, and is licensed by the New Jersey Department of Health as a manufacturer, labeler, or repackager of prescription drugs and controlled substances. 48. Each of the Actavis defendants is owned by Allergan plc, which uses them to market and sell its drugs in the United States. Allergan plc exercises control over these marketing and sales efforts, and profits from the sale of Allergan/Actavis products ultimately inure to its benefit. 49. Allergan plc, Allergan USA, Inc., Actavis plc, Actavis, Inc., Actavis LLC, Actavis Pharma, Inc., Watson Pharmaceuticals, Inc., Watson Pharma, Inc., and Watson Laboratories, Inc. will be referred to collectively as “Actavis.” 50. Actavis manufactures, promotes, sells, and distributes opioids, including the branded drugs Kadian and Norco, a generic version of Kadian, and generic versions of Duragesic and Opana, in the United States. Actavis acquired the rights to Kadian from King Pharmaceuticals, Inc. on December 30, 2008, and began marketing Kadian in 2009. Insys Defendants 51. Insys Therapeutics, Inc. (“Insys”) is a Delaware corporation with its principal place of business in Chandler, Arizona. 13 52. Insys was founded in 2002 by Dr. John Kapoor, a serial pharmaceutical industry entrepreneur “known for applying aggressive marketing tactics and sharp price increases on older drugs.”6 53. Kapoor founded Insys, and at various times held executive management positions in the company, including Executive Chairman of the Board of Directors, President and Chief Executive Officer, as well as principal shareholder. As founder, majority shareholder, CEO and Executive Chairman of the Board of Insys, Kapoor managed, directed and controlled the development, promotion, distribution and sale of Subsys. 54. Despite Kapoor's public statements that his involvement with Insys was merely as "an investor" and that he was "not involved in day-to-day operations," documentary evidence shows otherwise. Kapoor admitted that he spends "a significant amount of time on Insys," and as set forth in detail below, Kapoor was intimately involved in, and directed, Insys's operations on a daily basis. 55. In addition to participating in a daily "update" conference call with Insys high level executives, Kapoor's in-depth involvement with Insys ranged from, among other things, reviewing and approving sales pitch scripts to doctors, to developing physician targets, to discussing and directing Subsys strategy—including how to increase the percentage of approvals of Subsys prior authorizations—to closely managing various personnel changes throughout the company and formulating incentive compensation plans for Insys's sales force. 56. Furthermore, Kapoor received, among many other things, (i) "Daily JK emails" and weekly "JK" reports tracking, inter alia, Subsys' market performance; (ii) Subsys Low 6 U.S. Senate Homeland Security & Governmental Affairs Committee, Insys Therapeutics and the Systemic Manipulation of Prior Authorization (quoting Fentanyl Billionaire Comes Under Fire as Death Toll Mounts From Prescription Opioids, WALL STREET J. (Nov. 22, 2016). 14 Strength Reports tracking Subsys prescriptions written for 100 mcg and 200 mcg doses; (iii) Subsys Writer Tracker Reports tracking top Subsys prescribers trending by week; (iv) Actiq and Fentora High Dose Writers Reports tracking ideal targets to "switch" to Subsys; and (v) Super Voucher Daily Reports tracking super voucher redemptions. 57. Indeed, as late as January 2016, Kapoor demanded from Insys Executive Vice President and former Chief Operating Daniel Brennan ("Brennan") that "issues like sales compensation, realignment of territories and sales bonuses .get [his] agreement prior to announcing to the Field" to ensure they "fit into [his] philosophy" and to avoid "disruption in sales" of Subsys. 58. As set forth in detail below, under Kapoor's firm direction and close management, Insys engaged in a deliberate and multifaceted scheme to illegally expand Subsys's off-label prescriptions to grow the company's profits without regard to the law or consumer safety. In so doing, Kapoor violated the CFA and FCA, and is personally liable for those violations under both statutes. 59. On or about September 15, 2017, the United States Department of Justice identified Kapoor as an unindicted co-conspirator in its criminal prosecution of six former Insys executives and managers—including former CEO Michael Babich ("Babich") and Vice President of Sales, Alec Burlakoff ("Burlakoff' )—on Insys-related federal charges of racketeering conspiracy, mail fraud conspiracy, wire fraud conspiracy, and conspiracy to violate the AntiKickback law. 60. On October 26, 2017, the United States Department of Justice arrested Kapoor and charged him with federal RICO conspiracy, as well as other federal felonies, including conspiracy to commit mail and wire fraud and conspiracy to violate the Anti-Kickback statute. 15 Those charges were contained in a superseding indictment in which Kapoor was added to the previously-alleged conspiracy involving Babich, Burlakoff and other former Insys executives. 61. On October 29, 2017, Kapoor resigned from Insys's Board of Directors. 62. Insys develops, markets, and sells prescription drugs, including Subsys, a sublingual spray of fentanyl, in Hudson and nationally. 63. Subsys is a highly addictive synthetic opioid mouth-spray approved for treatment of cancer pain in patients who are tolerant of other opioids. Subsys is a form of fentanyl – a narcotic up to 50 times more powerful than heroin and 100 times more powerful than morphine. 64. According to Insys's 2016 annual report, Subsys was the most prescribed transmucosal "immediate-release fentanyl, with 42% market share, which translates to nearly $300 million in annual U.S. product sales for Insys - an increase of 270% in sales over just a year. See Insys-Annual Report filed on Form 10-K on April 3, 2017 at 1. 65. The broad sales of Subsys raised suspicion over Insys' sales practices, especially because it appeared that only 1 % of Subsys sales were generated by oncologists. Subsequent investigations revealed rampant off-label marketing and sales practices resulting in widespread prescriptions of the drug for unapproved uses. 66. The United States Federal Bureau of Investigations ("FBI"), as well as Colorado, Florida, Illinois, Massachusetts, Maryland, Minnesota, New Hampshire, New Jersey, New York, Oregon, Pennsylvania and Washington have issued subpoenas to Insys in regards to its marketing campaign for Subsys. These investigations ended in many criminal indictments of sales persons, executives, and outside physician groups that took bribes. 16 67. In 2013, The Department of Health and Human Services Office of Inspector General (DHHS-OIG) began investigating Insys for possible illegal off-label marketing of Subsys. 68. In 2015, the Oregon Department of Justice cited Insys for misrepresenting, among other things, that Subsys should be used to treat migraine, neck pain, back pain, and other offlabel uses. Insys paid $1.1 million to settle the matter. 69. In 2015, Insys paid $4.5 million to Illinois over allegations of deceptive marketing for off-label uses. 70. In 2017, Insys agreed to pay New Hampshire $2.9 million to settle allegations of aggressive and deceptive marketing. 71. In May 2017, former Insys manager Elizabeth Gurrieri pled guilty to wire fraud conspiracy in connection with Subsys sales. In July 2017, two former lnsys sales representatives pled guilty to federal kickback charges. One of them, Natalie Levine, is the wife of indicted former CEO of lnsys Michael Babich. 72. In addition, at least three civil suits have been brought against Insys for unethical marketing by estates of persons who overdosed as a result of being prescribed Subsys. 73. The Senate Homeland Security and Government Affairs Committee, led by Senator Claire McCaskill (D-MO) (“McCaskill Investigation”), is investigating the involvement of opioid manufacturers in the current crisis. The conclusion to McCaskill’s initial report, Fueling an Epidemic, states that Insys “has repeatedly employed aggressive and likely illegal techniques to boost prescriptions of its fentanyl product Subsys. . . . [that] included actions to undermine critical safeguards in the prior authorization process[. ]7 7 Minority Report, U.S. HSGAC (Sept. 6, 2017), Fueling an Epidemic: Insys Therapeutics and the Systemic 17 Mallinckrodt Defendants 74. Mallinckrodt, plc is an Irish public limited company headquartered in Staines- upon-Thames, United Kingdom, with its U.S. headquarters in St. Louis, Missouri. 75. Mallinckrodt, LLC is a limited liability company organized and existing under the laws of the State of Delaware, and is registered with the New Jersey Secretary of State to do business in New Jersey. Since 2013, Mallinckrodt, LLC has been a wholly owned subsidiary of Mallinckrodt, plc. Prior to 2013, Mallinckrodt, LLC was a wholly-owned subsidiary of the Irish public limited company Covidien pllc (formerly known as Tyco Healthcare). 76. Mallinckrodt, plc and Mallinckrodt, LLC will be referred to collectively as “Mallinckrodt.” 77. Mallinckrodt manufactures, markets, and sells drugs in the United States including generic oxycodone, of which it is one of the largest manufacturers, and opioids sold since at least June 2009 under the brand names Exalgo (hydromorphone), Xartemis (oxycodone/acetaminophen) and Roxicodone (oxycodone) (known by the street names “M,” “roxies/roxys,” or “blues”). In July 2017 Mallinckrodt agreed to pay $35 million to settle allegations brought by the Department of Justice that it failed to detect and notify the DEA of suspicious orders of controlled substances. 78. ABC Corporations 1-100 engaged in the manufacturing of opioids. 2. 79. Opioid Distributors The opioid distributor defendants (“Opioid Distributors”) are: McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Drug Corporation. Manipulation of Prior Authorization, https://www.hsdl.org/?view&did=803959. 18 80. At all relevant times, the Opioid Distributors have distributed, supplied, sold, and placed into the stream of commerce the prescription opioids, without fulfilling the fundamental duty of wholesale drug distributors to detect and warn of diversion of dangerous drugs for nonmedical purposes. The Distributor Distributors universally failed to comply with state law. The Opioid Distributors are engaged in “wholesale distribution,” as defined under federal, and State law. Plaintiff alleges the unlawful conduct by the Opioid Distributors is responsible for the volume of prescription opioids plaguing Plaintiff’s community. 81. McKesson Corporation (“McKesson”) is a Delaware corporation with its principal place of business located in San Francisco, California. McKesson is registered with the New Jersey Secretary of State to do business in New Jersey, and is licensed by the New Jersey Department of Health to distribute prescription drugs and controlled substances in New Jersey. At all relevant times, McKesson operated as a nationwide pharmacy wholesaler. 82. Cardinal Health, Inc. (“Cardinal”) is an Ohio corporation with its principal office in Dublin, Ohio. At all relevant times, Cardinal operated as a licensed pharmacy wholesaler in New Jersey.8 Cardinal Health is licensed by the New Jersey Department of Health to label, repackage, and distribute prescription drugs and controlled substances. Cardinal’s wholly-owned subsidiary Cardinal Health 120 operates a wholesale drug distribution center licensed by the New Jersey Department of Health to operate as a distributor of prescription drugs and controlled substances in New Jersey.9 83. AmerisourceBergen Drug Corporation (“AmerisourceBergen”) is a Delaware corporation with its principal place of business is in Chesterbrook, Pennsylvania. 8 Cardinal has registered its subsidiaries for business in New Jersey, including Cardinal Health 120, Inc. Cardinal Health is a significant distributor of opioids in the United States. Cardinal Health’s largest customer is CVS Health (“CVS”), which accounted for 25% of Cardinal Health’s fiscal year 2016 revenue. According to its website, CVS operates numerous pharmacies in the County. 9 19 AmerisourceBergen is registered with the New Jersey Secretary of State to do business in New Jersey. At all relevant times, AmerisourceBergen operated as a nationwide pharmacy wholesaler. AmerisourceBergen maintains wholesale drug distribution centers licensed by the New Jersey Department of Health to operate as a distributor of prescription drugs and controlled substances in New Jersey. 84. The data which reveals and/or confirms the identity of each wrongful opioid distributor is hidden from public view in the DEA’s confidential ARCOS database. See Madel v. USDOJ, 784 F.3d 448 (8th Cir. 2015). Neither the DEA nor the wholesale distributors will voluntarily disclose the data necessary to identify with specificity the transactions which will form the evidentiary basis for the claims asserted herein.10, 11 85. Consequently, Plaintiff has named the three wholesale distributors (i.e., AmerisourceBergen Drug Corporation, Cardinal Health, Inc., and McKesson Corporation) which dominate 85% of the market share for the distribution of prescription opioids. The “Big 3” are Fortune 500 corporations listed on the New York Stock Exchange whose principal business is the nationwide wholesale distribution of prescription drugs. See Fed. Trade Comm'n v. Cardinal Health, Inc., 12 F. Supp. 2d 34, 37 (D.D.C. 1998) (describing Cardinal Health, Inc., McKesson Corporation, and AmerisourceBergen Drug Corporation predecessors). Each has been investigated and/or fined by the DEA for the failure to report suspicious orders. Plaintiff has reason to believe each has engaged in unlawful conduct which resulted in the diversion of 10 See Declaration of Katherine L. Myrick, Chief, Freedom of Information (FOI)/Privacy Act Unit (“SARF”), FOI, Records Management Section (“SAR”), Drug Enforcement Administration (DEA), United States Department of Justice (DOJ), Madel v. USDOJ, Case 0:13-cv-02832-PAM-FLN, (Document 23) (filed 02/06/14) (noting that ARCOS data is “kept confidential by the DEA”). 11 See Declaration of Tina Lantz, Cardinal Health VP of Sales Operation, Madel v. USDOJ, Case 0:13-cv-02832PAM-FLN, (Document 93) (filed 11/02/16) (“Cardinal Health does not customarily release any of the information identified by the DEA notice letter to the public, nor is the information publicly available. Cardinal Health relies on DEA to protect its confidential business information reported to the Agency.”). 20 prescription opioids into their community and that discovery will likely reveal others who likewise engaged in unlawful conduct. Plaintiff names each of the “Big 3” herein as defendants and place the industry on notice that Plaintiff is acting to abate the public nuisance plaguing their community. Plaintiff will request expedited discovery to secure the data necessary to reveal and/or confirm the identities of the wholesale distributors, including data from the ARCOS database. 86. ABC Corporations 1-100 engaged in the distribution of opioids. 3. 87. Front Groups/Physicians/Key Opinion Leaders Russell Portenoy, M.D., is an individual residing in New York. Defendant Dr. Portenoy is a physician licensed to practice medicine in the state of New York. Dr. Portenoy was instrumental in promoting opioids for sale and distribution nationally and in Hudson County. 88. In 1986, Defendant Dr. Russell Portenoy, who later became Chairman of the Department of Pain Medicine and Palliative Care at Beth Israel Medical Center in New York, while at the same time serving as a top spokesperson for drug companies, published an article reporting that “[f]ew substantial gains in employment or social function could be attributed to the institution of opioid therapy.”12 89. Writing in 1994, Dr. Portenoy described the prevailing attitudes regarding the dangers of long-term use of opioids: The traditional approach to chronic nonmalignant pain does not accept the longterm administration of opioid drugs. This perspective has been justified by the perceived likelihood of tolerance, which would attenuate any beneficial effects over time, and the potential for side effects, worsening disability, and addiction. According to conventional thinking, the initial response to an opioid drug may appear favorable, with partial analgesia and salutary mood changes, but adverse effects inevitably occur thereafter. It is assumed that the motivation to improve 12 Russell K. Portenoy & Kathleen M. Foley, Chronic Use of Opioid Analgesics in Non-Malignant Pain: Report of 38 cases, 25(2) Pain 171 (1986). 21 function will cease as mental clouding occurs and the belief takes hold that the drug can, by itself, return the patient to a normal life. Serious management problems are anticipated, including difficulty in discontinuing a problematic therapy and the development of drug seeking behavior induced by the desire to maintain analgesic effects, avoid withdrawal, and perpetuate reinforcing psychic effects. There is an implicit assumption that little separates these outcomes from the highly aberrant behaviors associated with addiction.13 According to Portenoy, these problems could constitute “compelling reasons to reject long term opioid administration as a therapeutic strategy in all but the most desperate cases of chronic nonmalignant pain.”14 90. For the reasons outlined by Dr. Portenoy, and in the words of one researcher from the Harvard Medical School, “it did not enter [doctors’] minds that there could be a significant number of chronic pain patients who were successfully managed with opioids.”15 91. Perry Fine, M.D., is an individual residing in Utah. Dr. Fine was instrumental in promoting opioids for sale and distribution nationally and in Hudson. 92. Dr. Fine, served on the Board for the American Pain Foundation and reviewed its publications, which understated the risks and overstated the benefits of opioids and were intended to reach the public. 93. The APF issued education guides for patients, reporters, and policymakers that touted the benefits of opioids for chronic pain and trivialized their risks, particularly the risk of addiction. APF also launched a campaign to promote opioids for returning veterans, which has contributed to high rates of addiction and other adverse outcomes—including death—among returning soldiers. APF also engaged in a significant multimedia campaign—through radio, 13 Russell K. Portenoy, Opioid Therapy for Chronic Nonmalignant Pain: Current Status, 1 Progress in Pain Res. & Mgmt. 247 (1994) (emphasis added). 14 Id. 15 Igor Kissin, Long-term opioid treatment of chronic nonmalignant pain: unproven efficacy and neglected safety?, 6 J. PAIN RESEARCH 513, 514 (2013) (quoting Loeser JD, Five crises in pain management, 20(1) Pain Clinical Updates 1-4 (2012). 22 television and the internet—to educate patients about their “right” to pain treatment, namely opioids. All of the programs and materials were available nationally and were intended to reach County residents. 94. Dr. Perry received consulting fees from Defendants as a result of his leadership status and role on the APF Board.16 95. Scott Fishman, M.D., is an individual residing in California. Dr. Fishman was instrumental in promoting opioids for sale and distribution nationally and in Hudson. 96. Like Dr. Fine, Dr. Fishman served on the Board for the American Pain Foundation and reviewed its publications, which understated the risks and overstated the benefits of opioids and were intended to reach the public. 97. Additionally, in 2007 Cephalon sponsored and distributed through its sales representatives FSMB’s Responsible Opioid Prescribing, which was drafted by Dr. Fishman. Dr. Fishman was frequently hired by a consulting Firm, Conrad & Associates LLC, to write proopioid marketing pieces disguised as science. Dr. Fishman’s work was reviewed and approved by drug company representatives, and he felt compelled to draft pieces that he admits distorted the risks and benefits of chronic opioid therapy in order to meet the demands of his drug company sponsors. 98. Responsible Opioid Prescribing was a signature piece of Dr. Fishman’s work and contained a number of deceptive statements. This publication claimed that, because pain had a 16 Evaluating the Propriety and Adequacy of the Oxycontin Criminal Settlement: Before the S. Comm. On the Judiciary, 110th Cong. 46-50, 110-116 (2007) (statements of Dr. James Campbell, Chairman, APF), https://www.judiciary.senate.gov/imo/media/doc/Campbell%20Testimony%20073107.pdf (accessed Feb. 27, 2017). Purdue was also able to exert control over APF through its relationships with APF’s leadership. Purdue-sponsored KOLs Russell Portenoy and Scott Fishman chaired APF’s board. Another APF board member, Perry Fine, also received consulting fees from Purdue. APF board member Lisa Weiss was an employee of a public relations firm that worked for both Purdue and APF. Weiss, in her dual capacity, helped vet the content of the Purdue-sponsored Policymaker’s Guide, which is described below. 23 negative impact on a patient’s ability to function, relieving pain—alone—would “reverse that effect and improve function.” However, the truth is far more complicated; functional improvements made from increased pain relief can be offset by a number of problems, including addiction. 99. Endo sponsored FSMB’s Responsible Opioid Prescribing, drafted by Dr. Fishman, which in various ways deceptively portrayed the risks, benefits, and superiority of opioids to treat chronic pain. 100. Lynn Webster, M.D., is an individual residing in Utah. Dr. Webster was instrumental in promoting opioids for sale and distribution nationally and in Hudson. 101. Dr. Webster, was the co-founder and Chief Medical Director of Lifetree Clinical Research, an otherwise unknown pain clinic in Salt Lake City, Utah. Dr. Webster was President in 2013 and is a current board member of AAPM, a front group that ardently supports chronic opioid therapy.17 She is a Senior Editor of Pain Medicine, the same journal that published Endo special advertising supplements touting Opana ER. Dr. Webster was the author of numerous CMEs sponsored by Cephalon, Endo, and Purdue. At the same time, Dr. Webster was receiving significant funding from Defendants (including nearly $2 million from Cephalon). 102. Dr. Webster had been under investigation for overprescribing by the DEA, which raided his clinic in 2010. More than 20 of Dr. Webster’s former patients at the Lifetree Clinic have died of opioid overdoses. Ironically, Dr. Webster created and promoted the Opioid Risk Tool, a five question, one-minute screening tool relying on patient self-reports that purportedly allows doctors to manage the risk that their patients will become addicted to or abuse opioids. The claimed ability to presort patients likely to become addicted is an important tool in giving 17 Journal supplements are paid for by drug manufacturers and, although they may be designed to blend into the rest of the journal, are not peer-reviewed and constitute drug company advertising. 24 doctors confidence to prescribe opioids long-term, and for this reason, references to screening appear in various industry-supported guidelines. Versions of Dr. Webster’s Opioid Risk Tool appear on, or are linked to, websites run by Endo, Janssen, and Purdue. In 2011, Dr. Webster presented, via webinar, a program sponsored by Purdue titled, Managing Patient’s Opioid Use: Balancing the Need and the Risk. Dr. Webster recommended use of risk screening tools, urine testing, and patient agreements to prevent “overuse of prescriptions” and “overdose deaths.” This webinar was available to and was intended to reach County doctors. 103. 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 increase a patient’s dose of opioids. As he and his co-author wrote in a book entitled Avoiding Opioid Abuse While Managing Pain (2007), when faced with signs of aberrant behavior, increasing the dose “in most cases . . . should be the clinician’s first response.” Endo distributed this book to doctors. Years later, Dr. Webster reversed himself, acknowledging that “[pseudoaddiction] obviously became too much of an excuse to give patients more medication.”18 4. Retailer Defendants 104. Defendant CVS Health Corporation is a Delaware corporation with its headquarters and principal place of business located in Woonsocket, Rhode Island. CVS Health Corporation is registered with the New Jersey Secretary of State to do business in New Jersey. 105. Defendant Walgreens Boots Alliance, Inc. and Walgreen Eastern Co., Inc. are Delaware corporations with headquarters in Deerfield, Illinois. Walgreens Boots Alliance and 18 John Fauber & Ellen Gabler, Networking Fuels Painkiller Boom, Milwaukee Wisc. J. Sentinel (Feb. 19, 2012). 25 Walgreen Eastern Co. are registered with the New Jersey Secretary of State to do business in New Jersey. 106. Defendant Rite Aid Corporation is a Delaware Corporation with its headquarters in Camp Hill, Pennsylvania. Rite Aid Corporation is registered with the New Jersey Secretary of State to do business in New Jersey. 107. Defendant Wal-Mart Stores East, LP and Wal-Mart Stores East, Inc. is a Delaware Corporation with its headquarters in Bentonville, Arkansas. Wal-Mart Stores East, LP and Wal-Mart Stores East, Inc. are registered with the New Jersey Secretary of State to do business in New Jersey. 108. Defendant Wal-Mart Stores East, LP and Wal-Mart Stores East, Inc. are Delaware Corporations with headquarters in Bentonville, Arkansas. Wal-Mart Stores East, LP and WalMart Stores East, Inc. are registered with the New Jersey Secretary of State to do business in New Jersey. 109. The above-listed pharmacies were instrumental in sale and distribution of opioids nationally and in Hudson. They engaged in the filling of prescriptions for opioid that led to the opioid epidemic. 110. ABC Corporations 1-100 engaged in the filling of prescriptions for opioids. 5. Defendants’ Agents 111. All of the actions described in this Complaint are part of, and in furtherance of, the unlawful conduct alleged herein, and were authorized, ordered, and/or done by Defendants or their officers, agents, employees, or other representatives while actively engaged in the management of Defendant’s affairs within the course and scope of their duties and employment, and/or with Defendant’s actual, apparent, and/or ostensible authority. 26 112. Jane and John Does 1-100, and ABC Corporations 1-100 actively engaged in the management of Defendants’ affairs within the course and scope of their duties and employment, and/or with Defendant’s actual, apparent, and/or ostensible authority. 113. The combined acts and/or omissions of each Defendant resulted in indivisible injuries to Plaintiff. Each of the above-named Defendants is a joint tortfeasor and/or coconspirator and is jointly and severally liable to Plaintiff for the negligent acts and omissions alleged herein. Each of the above-named Defendants directed, authorized or ratified the conduct of each and every other Defendant. JURISDICTION AND VENUE 114. This Court has jurisdiction over this action. Plaintiff, County of Hudson is a “municipal corporation” within the definition of N.J.S.A. 40:42-1 and is entitled to bring this suit pursuant to N.J.S.A. 40:69A-29(c) which grants New Jersey municipalities the right to “sue….as may be required for the good government thereof.” 115. Venue is proper in Hudson County pursuant to Rule 4.3-2 of the New Jersey rules. 116. This Court has jurisdiction over non-resident Defendants because they conduct business in the State of New Jersey, purposefully direct or directed their actions toward the State of New Jersey, some or all consented to be sued in the State of New Jersey by registering an agent for service of process, they consensually submitted to the jurisdiction of the State when obtaining a manufacturer or distributor license, and because they have the requisite minimum contacts with the State necessary to constitutionally permit the Court to exercise jurisdiction. 117. This action is non-removable because there is incomplete diversity of residents and no substantial federal question is presented. 27 FACTUAL BACKGROUND A. The Opioid Epidemic Caused By Defendants 118. Opioids are a class of “analgesic,” which are drugs that treat pain or tissue irritation. Tylenol and aspirin are analgesics, but opioids are much more powerful. The dangers of opioid addiction have long been known. During the Civil War, injured soldiers treated with morphine often became addicted.19 “In 1898, the Bayer Co. started production of another opioid, heroin, on a commercial scale. From its first clinical trials, it was considered a ‘wonder drug.’” 20 But soon, people became addicted, and addicts learned that they could get a more intense high from injecting it.21 When the opioids Percocet and Vicodin came on the market in the mid-to-late 1970s, physicians understood the dangers of addiction, and these drugs were only seen fit for the management of short-term pain, such as from surgery, or to ease the suffering of the terminally ill. But, when the Opioid Manufacturers began inventing their patented opioids in the 1990s, they sought to convince the medical community and the world that opioids were safe and effective for all types of pain, including chronic lower-back pain and arthritis. 119. Unfortunately, the Opioid Manufacturers’ misinformation campaign was wildly successful and spurred an opioid epidemic in the United States, the worst drug epidemic in the nation’s history. The past two decades in the United States have been characterized by a dramatic increase in the diversion of opioids from licensed prescribers and pharmacies to the illegal market.22 19 Sonia Moghe, Opioid history: From ‘wonder drug’ to abuse epidemic, CNN (Oct. 14, 2016), http://cnn.it/1X4yjE9. 20 Id. 21 Id. 22 See Dart, RC, et al., Trends in Opioid Analgesic Abuse and Mortality in the United States, 372 N. ENG. J. MED. 241 (2015). 28 120. Fueled by legal and illegal sales, the Opioid Manufacturers and Distributors collectively generated $8 billion per year in revenue from prescription opioids, as of 2009.23 121. By 2010, enough prescription opioids were sold to medicate every adult in the United States with a dose of 5 milligrams of hydrocodone every 4 hours for 1 month.24 For each 100 American citizens, 80 opioid prescriptions were issued each year.25 122. By 2011, the U.S. Department of Health and Human Services, and the Centers for Disease Control and Prevention declared prescription painkiller overdoses at epidemic levels. 123. Approximately 5,500 people begin misusing prescription opioids every day.26 124. In 2016, the President of the United States declared an official opioid epidemic.27 1. New Jersey’s Opioid Epidemic 125. The abuse of prescription and non-prescription opioids is a public health crisis in New Jersey. 126. In New Jersey, overdose is now the leading cause of accidental death. At least 1901 people died from Opioid overdoses in New Jersey in 2016. 28 127. Treatment centers in New Jersey have been inundated with heroin and opioid abuse cases. In 2012, 33,507 people were admitted to State-licensed or certified substance abuse 23 See Katherine Eban, OxyContin: Purdue Pharma’s Painful Medicine, FORTUNE, Nov. 9, 2011, http://for.tn/2DwlUnm; David Crow, Drugmakers Hooked on $10bn Opioid Habit, FIN. TIMES, Aug. 10, 2016, http://on.ft.com/2zeDbOG. 24 Katherine M. Keyes at al., Understanding the Rural-Urban Differences in Nonmedical Prescription Opioid Use and Abuse in the United States, 104 AM. J. PUB. HEALTH e52 (2014). 25 Data for 2010. Ctrs. for Disease Control and Prevent, Vital Signs: Changes in Opioid Prescribing in the United States, 2006–2015, CDC (July 7, 2017), https://www.cdc.gov/mmwr/volumes/66/wr/mm6626a4.htm. 26 See Press Release, Ctrs. for Disease Control and Prevention, U.S. Dep’t of Health and Human Servs., Prescription Painkiller Overdoses at Epidemic Levels (Nov. 1, 2011), https://www.cdc.gov/media/releases/2011/p1101_flu_pain_killer_overdose.html. 27 See Proclamation No. 9499, 81 Fed. Reg. 65,173 (Sept. 16, 2016) (proclaiming “Prescription Opioid and Heroin Epidemic Awareness Week”). 28 See All 1,901 people killed by opioids in N.J. last year, mapped (Dec 8, 2017), NEW JERSEY http://www.nj.com/news/index.ssf/2017/09/all_1901_people_killed_by_opioids_in_nj_last_year_mapped.html 29 treatment programs due to heroin and opioid abuse. However, in 2016 the number of admissions increased to 38,334. B. The Opioid Manufacturers’ Misinformation Campaign 128. The opioid epidemic did not happen by accident; it was foreseen and purposefully fueled by those in a position to profit from a far greater demand and consumption of the drugs than is medically appropriate, and a blatant disregard for the law and the health and safety of consumers in favor of maximized profits. 129. Before the 1990s, generally accepted standards of medical practice dictated that opioids should only be used in the short-term. Accepted uses for opioids were to treat acute pain, such as from surgery, cancer, or other terminal illness. The medical community discouraged and prohibited the use of opioids for chronic pain, such as from arthritis or injury. There is insufficient evidence that opioids improve chronic-pain sufferers’ ability to function. And there is abundant evidence that chronic-pain patients develop a tolerance over time, so opioids no longer alleviate their symptoms. The lack of benefit for prescribing opioids to sufferers of chronic pain, in other words, was easily outweighed by the serious risk of addiction that stems from persistent use of opioid painkillers. 130. But to improve sales and ensure their drugs reached a wider audience, the Opioid Manufacturers engaged in a marketing scheme designed to persuade doctors and patients that opioids could safely and beneficially be used to treat chronic pain. As part of this scheme, each Opioid Manufacturer spent millions of dollars on promotional activities and materials that falsely denied or trivialized the risks of opioids, while overstating the benefits of using them for chronic pain. 131. This misinformation scheme was wildly successful, to the widespread detriment of patients. Opioids are now the most prescribed class of drugs. In an open letter to the nation’s 30 physicians in August 2016, the then-U.S. Surgeon General expressly connected this “urgent health crisis” to “heavy marketing of opioids to doctors . . . [m]any of [whom] were even taught– incorrectly–that opioids are not addictive when prescribed for legitimate pain.”29 This epidemic has resulted in a flood of prescription opioids available for illicit use (i.e., a supply spike), and a population of patients physically and psychologically dependent on them (i.e., a demand spike). And when those patients can no longer afford or obtain opioids from licensed dispensaries, they often turn to the street to buy prescription opioids or even non-prescription opioids, like heroin. This trend has led to the death of New Jersey residents, as well as put hundreds of other lives in jeopardy. 132. The Opioid Manufacturers used many of the same tactics as the tobacco industry in the late 1950s through the 1980s30 to attract consumers and reassure the public of the effectiveness and safety of their product. The tobacco industry ran direct advertising that misrepresented the dangers of smoking: 29 Letter from Vivek H. Murthy, U.S. Surgeon General (Aug. 2016), http://turnthetiderx.org/. Loddenkemper R, Kreuter M (eds), The Tobacco Epidemic, ed 2, rev. and ext. Prog. Respir Res. Basel, Karger, 2015, vol 42, pp. 14, http://bit.ly/2BKwB5x. 30 31 Figure: Cigarette Advertisements 133. Once the public stopped believing these blatantly misleading ads, the tobacco industry touted “safer” formulations of cigarettes, such as filtered cigarettes, low-tar varieties, and light cigarettes.31 134. Lastly, the tobacco industry used indirect strategies to mask their role in crafting the message, as part of a decades-long conspiracy “revealed through analysis of the formerly secret internal documents of the industry,” acquired in litigation.32 The cigarette manufacturers “used front groups and artificially created ‘grass roots’ movements that create[d] the illusion of support” for cigarettes.33 Most famously, the tobacco industry used the Tobacco Institute to release publications from a seemingly non-biased source to question the scientific consensus about cigarettes and fund scientific research attempting to show cigarettes were safe. 31 Id. Id. 33 Id. 32 32 135. Similarly, the Opioid Manufacturers used direct advertisements to market opioids as safe and effective to treat chronic pain. As this false messaging became less effective, the Opioid Manufacturers introduced supposedly safer versions of their drugs, such as extended release and crush-resistant formulations, and versions that were only part opioid and part acetaminophen (Tylenol). These formulations were actually more dangerous, as drug abusers began overdosing on the Tylenol or the chemicals in the crush-resistant pill coating. The FDA recently capped the acetaminophen dose that can be used in opioid painkillers and forced Endo to remove its crush-resistant opioid, Opana ER, from the market. Lastly, the Opioid Manufacturers used indirect marketing tactics, hiring influential doctors to advocate that opioids were safe to use for chronic pain, and employing seemingly non-biased front groups to parrot their messages about opioids. 1. Direct Marketing 136. Each Opioid Manufacturer conducted advertising campaigns touting the purported benefits of their branded opioid drugs. For example, the Opioid Manufacturers spent more than $14 million in 2011 alone to advertise opioids in medical journals, nearly triple what they spent 10 years earlier. 137. Many of the Opioid Manufacturers’ ads deceptively portrayed benefits of opioids for chronic pain. For example, Endo distributed and made available on its website opana.com a pamphlet promoting Opana ER as a chronic-pain treatment, with photographs depicting patients able to return to physically demanding jobs like construction worker, chef, and teacher, conveying the false message that opioids were a safe and effective way for chronic-pain sufferers to restore their former functionality. 33 138. Purdue created a promotional video in 1998 called “I got my life back,” featuring seven patients whose lives were “turned around by the magic of OxyContin.”34 One patient, Lauren Cambra, was featured as saying that OxyContin had fixed her chronic pain and restored her ability to function. Figure: Purdue’s “I got my life back” advertisement35 139. In the ad, Lauren is featured as saying, “Since I’ve been on this new pain medication, I have not missed one day of work, and my boss really appreciates that: ‘Lauren is there every day.’ So, I’m able to be very productive. And one of the things … which I’m especially excited about is just the fact that I’m able to spend time with my grandchildren. It’s amazing just to be able to keep up with them and not have to always tell them: ‘Grandma can’t 34 35 Jon Oliver, Opioids, Last Week Tonight (Oct. 23, 2016), https://www.youtube.com/watch?v=5pdPrQFjo2o. Id. 34 play now; grandma can’t do this; … grandma’s back hurts.’”36 The video features heartwarming footage of Ms. Cambra playing with her grandkids. 140. In a follow-up study in 2012 by Physicians for Responsible Opioid Prescribing, entitled “OxyContin Poster Children 15 Years Later,” Ms. Cambra said that she became addicted to OxyContin soon after she started taking it, with terrible consequences. She says, “I lost my house; I’ve lost cars; … I lost a lot to keep taking that drug; … I lost my job.”37 When Ms. Cambra lost her job, she also lost her health insurance. Cambra says, “Had I not lost my medical insurance, otherwise, I would [still] go to the mailbox once a month, and I would find a bottle of OxyContin in it, and I’d probably still be on it, [or] I’d probably be dead.” 141. In 2012, the same year that “OxyContin Poster Children 15 Years Later” came out, Purdue ran another series of ads in medical journals. The ad campaign was called “Pain vignettes.” These ads featured chronic pain patients and recommended OxyContin to treat their 36 37 Id. Id. 35 pain. One ad described a “54-year-old writer with osteoarthritis of the hands” and implied that OxyContin would allow the writer to work again without pain. 142. Unfortunately, well-meaning doctors who wanted to help their pain patients were duped into prescribing OxyContin for long-term pain management. David Juurlink, who runs the division of clinical pharmacology and toxicology at the University of Toronto, explains why these advertisements convinced so many physicians to prescribe OxyContin for chronic pain, “You’ve got a patient in pain, you’ve got a doctor who genuinely wants to help, and now suddenly you have an intervention that—we are told—is safe and effective.”38 Keith Humphreys, a professor of psychiatry at Stanford, who served as a drug-policy adviser to the Obama Administration, says of Purdue’s marketing efforts, “That’s the real Greek tragedy of this—that so many well-meaning doctors got co-opted. The level of influence is just mind-boggling.”39 143. In addition to marketing material, the Opioid Manufacturers promoted the use of opioids for chronic pain through “detailers” – sales representatives who visited individual doctors and medical staff in their offices. The Opioid Manufacturers spent massive amounts to have detailers pitch opioids to physicians. In 2014 alone, the Opioid Manufacturers spent in excess of $168 million detailing branded opioids to doctors. 144. The Opioid Manufacturers’ detailing to doctors has been effective. Numerous studies indicate that marketing affects prescribing habits, with face-to-face detailing having the greatest influence. Opioid Manufacturers use uniform sales material and train their salespeople – at training seminars and using Power Point presentations – to parrot the company’s branded messaging. 38 Patrick Radden Keefe, The Family That Built an Empire of Pain, NEW YORKER (Oct. 30. 2017), http://bit.ly/2yHrgvM. 39 Id. 36 145. Opioid Manufacturers have been reprimanded for their deceptive detailing messages. In March 2010, for example, the FDA found that Actavis had been distributing promotional materials that “minimized the risks associated with Kadian and misleadingly suggested that Kadian is safer than has been demonstrated.” Those materials in particular “fail to reveal warnings regarding potentially fatal abuse of opioids, use by individuals other than the patient for whom the drug was prescribed.”40 146. Purdue was another major culprit in fraudulent detailing. In its training materials, “Purdue instructed sales representatives to assure doctors—repeatedly and without evidence— that ‘fewer than one per cent’ of patients who took OxyContin became addicted,” even though a 1999 Purdue-funded study of patients who used OxyContin for headaches found that “the addiction rate was thirteen per cent.”41 2. Indirect Marketing 147. The Opioid Manufacturers indirectly marketed their respective branded opioids via unbranded advertising, paid speakers and “key opinion leaders,” and industry-funded organizations posing as neutral and credible professional societies and patient advocacy groups (referred to hereinafter as “Front Groups”). 148. The Opioid Manufacturers marketed through third-party, unbranded advertising to avoid regulatory scrutiny because that advertising is not submitted to and is normally not reviewed by the FDA. The Opioid Manufacturers also used third-party, unbranded advertising to create the misconception that the false and deceptive messages came from independent and objective sources, rather than from the Opioid Manufacturers. 40 Letter from Thomas Abrams, Dir., Div. of Drug Mktg., Advert., & Commc’ns, U.S. Food & Drug Admin., to Doug Boothe, CEO, Actavis Elizabeth LLC (Feb. 18, 2010), http://www.fdanews.com/ext/resources/files/archives/a/ ActavisElizabethLLC.pdf. 41 Id. 37 149. Some Opioid Manufacturers could only market through indirect means because they had entered into consent decrees that prohibited them from engaging in direct marketing. For example, a 2007 lawsuit against Purdue, brought by multiple States for Purdue’s deceptive marketing and promotion of OxyContin, ended in a series of consent decrees restricting the tactics Purdue could use in its direct marketing of OxyContin in the future. To circumvent these restrictions, Purdue simply funneled its energies and funds into indirect marketing. 150. Like the tobacco companies before them, the Opioid Manufacturers used third parties that they funded, directed, and controlled to carry out and conceal their scheme to deceive doctors and patients about the risks and benefits of long-term opioid use for chronic pain. a. Key Opinion Leaders 151. The concept of a “key opinion leader” was coined by sociologist Paul Lazarsfeld.42 For Lazarsfeld and his progeny, a key opinion leader is someone held in high regard by those who accept his or her opinions. A key opinion leader might be a celebrity, politician, or doctor. In Lazardfeld’s model, new ideas or products spread in a two-step process. A key opinion leader endorses or adopts the idea or product, and then others who hold the key opinion leader in high esteem follow suit. 152. In the 1950s, when studies definitively linked cigarettes to lung cancer, the tobacco industry paid key opinion leaders to say that smoking was still safe.43 Big Tobacco “coopted scientists … to the extent of being able to influence peer-reviewed scientific literature.”44 153. The Opioid Manufacturers took a page from Big Tobacco’s playbook, and “recruited their own traveling spokespeople, a group of opioid-pushing Pied Pipers known as 42 Sergio Sismondo, Ph.D., Key Opinion Leaders and the Corruption of Medical Knowledge: What the Sunshine Act Will and Won't Cast Light on, 41 J.L. MED. & ETHICS 635, 636 (2013). 43 Loddenkemper, supra note 21. 44 Id. 38 [key opinion leaders].”45 The Opioid Manufacturers made “large payments” to these physicians, “primarily intended … to purchase their influence on other physicians.”46 For example, one influential key opinion leader doctor was dubbed – due to his efforts advocating for wider opioid use – “The King of Pain” by Time magazine.47 This individual was “on the payroll” of at least four different Opioid Manufacturers.48 154. The Opioid Manufacturers used their key opinion leaders to control the message about opioids conveyed in scientific literature, treatment guidelines, and continuing medical education programs, including medical conferences and seminars. For example, “Purdue had a speakers’ bureau, and it paid several thousand clinicians to attend medical conferences [to] deliver presentations about the merits of” its opioid drug, OxyContin.49 Paying these key opinion leaders to speak at conferences was “worth the investment” because “internal Purdue records indicate that doctors who attended these seminars … wrote OxyContin prescriptions more than twice as often as those who didn’t.”50 To convince these doctors of the drug’s safety, Purdue used studies that it had bought and paid for. The New Yorker says, “The marketing of OxyContin relied on an empirical circularity: [Purdue] convinced doctors of the drug’s safety with literature that had been produced by doctors who were paid, or funded, by the company.”51 155. Two prominent opioid advocates paid handsomely by the Opioid Manufacturers were Dr. Russell Portenoy and Dr. Lynn Webster. 45 Larry McShane, How Big Tobacco-style marketing propels U.S. opioid crisis — and powers $400B pharma industry, N.Y. DAILY NEWS (June 24, 2017), http://nydn.us/2sNRbND. 46 Sismondo, supra note 2, at 635-36. 47 McShane, supra note 35. 48 Id. 49 Keefe, supra note 28. 50 Id. 51 Id. 39 Dr. Russell Portenoy 156. Dr. Russell Portenoy, a doctor at Beth Israel Medical Center in New York, was paid as a “consultant” by Cephalon and Purdue and received substantial speaking fees and research funding from Endo, Janssen, and Mallinckrodt (among others). The NY Daily News says that Dr. Portenoy “became a tireless shill” for the opioid industry.52 157. Portenoy was instrumental in spreading the falsehood that opioids were safe and effective for chronic pain. In 1986, he wrote a “seminal paper arguing that opioids could be used” not only in “cancer patients with terrible pain,” but also in chronic-pain sufferers, such as those with arthritis.53 Dr. Portenoy claimed that a patient with “knee and hip pain from arthritis” could be given opioids with “very, very low risk” of addiction.54 Dr. Portenoy based his paper on a study he conducted on patients who were prescribed an opioid for chronic pain. The study looked at only 38 patients, many of whom were prescribed methadone, a milder opioid also used to treat heroin addiction.55 158. Dr. Portenoy frequently made media appearances to promote opioids, touting the claim that “the likelihood that the treatment of pain using an opioid drug … will lead to addiction is extremely low.” He appeared on Good Morning America in 2010 to discuss the use of opioids to treat chronic pain and asserted: “Addiction, when treating pain, is distinctly uncommon.” 52 McShane, supra note 35.. Thomas Catan and Evan Perez, A Pain-Drug Champion Has Second Thoughts, WALL STREET J. (Dec. 17, 2012), http://on.wsj.com/2p9B2nI. 54 Assuming the patient has no personal or family history of substance abuse or mental illness, Health.com, Dr. Russell Portenoy, a Leader in Pain Medicine, Answers Critical Questions About Using Opioids for Chronic Pain (Mar. 17, 2017), http://www.health.com/health/condition-article/0,,20189630,00.html. 55 See Portenoy RK and Foley KM, Chronic use of opioid analgesics in non-malignant pain, Pain, 1986 May;25(2):171-86, https://www.ncbi.nlm.nih.gov/pubmed/2873550. 53 40 159. Dr. Portenoy was chiefly responsible for the widespread falsehood that “less than 1%” of opioid users ever become addicted.56 Dr. Portenoy repeatedly cited a “study” by Dr. Hershel Jick,57 even though the study was merely a five-sentence letter-to-the-editor published in a medical journal in 1980.58 Although Portenoy claimed that Dr. Jick’s analysis showed that opioids were safe for long-term use, “Jick’s analysis proved no such thing. The “study” analyzed a database of hospitalized patients at Boston University Medical Center who were given small doses of opioids in a controlled [inpatient] setting to ease suffering from acute pain. These patients were not given long-term opioid prescriptions, which they’d be free to administer at home.”59 Although the “study” had nothing to do with long-term use outside the confines of a hospital, Portenoy asserted that the Jick analysis proved that opioids were safe for long-term use. 160. Portenoy took steps to ensure that his 1% statistic would be widely publicized and cited. In the 1990s, he pushed this statistic during his lectures and through the American Pain Society, of which he was president.60 Citing his 1% statistic, “Dr. Portenoy helped write a landmark 1996 consensus statement by two professional pain societies that said there was little risk of addiction or overdose among pain patients.”61 As a result of Dr. Portenoy’s efforts, the Jick analysis has been cited in 901 academic publications.62 A 1990 article in Scientific American cited the Jick analysis as an “extensive study.”63 A 2001 Time magazine article said it 56 Harrison Jacobs, This one-paragraph letter may have launched the opioid epidemic, Business Insider (May 26, 2016), http://read.bi/2BPnXmb. 57 Id. 58 Id. 59 Id. 60 Catan, supra note 53. 61 Id. 62 Jacobs, supra note 56. 63 Id. 41 was a “landmark study” that proved that the “exaggerated fear that patients would become addicted” to opioids was “basically unwarranted.”64 161. Portenoy’s 1% statistic from the Jick letter was one of the “primary justifications” that doctors used for more liberally prescribing opioids starting in the early 1990s. 65 When investigative journalist Sam Quinones dug into the causes of the opioid crisis, including interviewing doctors and other medical professionals, the “Jick letter was referenced repeatedly to justify the increase in liberal prescriptions of opioid painkillers.”66 “Over time, the … Jick letter, and its claim that ‘less than 1%’ of opioid users became addicted, became ‘gospel’ for medical professionals, Dr. Marsha Stanton told Quinones.”67 Dr. Stanton continued, “I used [the Jick letter] in lectures all the time. Everybody did. It didn’t matter whether you were a physician, a pharmacist, or a nurse; you used it. No one disputed it. Should we have? Of course we should have.”68 162. “Today, even proponents of opioid use say that figure was wrong,” says the Wall Street Journal. One opioid advocate said, “It’s obviously crazy to think that only 1% of the population is at risk for opioid addiction.” Modern studies put the rate much higher. A 2015 meta-study found that up to 29% of chronic-pain patients started abusing opioids, and up to 12% became addicted during the study period.69 163. In recent years, Dr. Portenoy reversed his position on the safety of opioids.70 In a 2011 interview, “Portenoy admitted that he used the … Jick letter, along with other similar 64 Id. Id. 66 Id. 67 Id. 68 Id. 69 Vowles et al., Rates of opioid misuse, abuse, and addiction in chronic pain: a systematic review and data synthesis, Pain, NCBI (Apr. 2015), https://www.ncbi.nlm.nih.gov/pubmed/25785523. 70 Catan, supra note 53. 65 42 studies on opioid use, to encourage more liberal prescribing of opioids.”71 Portenoy admitted, “None of [those studies] represented real evidence, and yet what I was trying to do was to create a narrative so that the primary care audience would look at this information and feel more comfort about opioids in a way they hadn’t before. In essence this was education to destigmatize [opioids] … and because the primary goal was to destigmatize, we often left evidence behind.” 72 Portenoy now admits that he “gave innumerable lectures in the late 1980s and ‘90s about addiction that weren’t true.”73 These lectures falsely claimed that less than 1% of patients would become addicted to opioids. Portenoy candidly stated: “Did I teach about pain management, specifically about opioid therapy, in a way that reflects misinformation? . . . I guess I did.”74 Portenoy says it’s “quite scary” to think about how he “contributed to soaring rates of addiction and overdose deaths.”75 Portenoy said that his opioid advocacy “was clearly the wrong thing to do.”76 Dr. Lynn Webster 164. Another key opinion leader paid by the opioid industry was Dr. Lynn Webster, Chief Medical Director of Lifetree Clinical Research, an otherwise unknown pain clinic in Salt Lake City, Utah. Dr. Webster was President of the American Academy of Pain Medicine in 2013. Dr. Webster was the author of numerous continuing medical education courses sponsored by Cephalon, Endo, and Purdue. He received significant funding from the Opioid Manufacturers, including nearly $2 million from Cephalon. 71 Jacobs, supra note 56. Id. 73 Id. 74 Id. 75 Id. 76 Id. 72 43 165. During a portion of his time as a key opinion leader, Dr. Webster was under investigation by the Drug Enforcement Administration (DEA) for overprescribing opioids. The DEA raided his clinic in 2010. More than twenty of Dr. Webster’s former patients have died of opioid overdoses. 166. Dr. Webster created and promoted an Opioid Risk Tool,77 a five question, oneminute screening tool that purportedly allows doctors to pre-screen patients for addiction risk factors. Dr. Webster claimed the tool could identify patients likely to become addicted, so doctors could avoid prescribing opioids to these patients. The Tool is supposed to give doctors confidence in prescribing opioids to individuals that the Tool identifies as low risk. The Tool has been touted by a variety of industry-supported publications, and appears or is linked to on websites run by Endo, Janssen, and Purdue. 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 his Opioid Risk Tool to prevent “overuse of prescriptions” and “overdose deaths.” This webinar was available to and was intended to reach doctors in New Jersey.78 167. The Tool is inaccurate. It correctly identifies individuals with heightened risk of opioid addiction only 45% of the time—worse than a coin flip.79 Clinical interviews with patients and more robust screening tools are 1.71 and 1.62 times more accurate, respectively.80 77 Opioid Risk Tool, DRUGABUSE.GOV, https://www.drugabuse.gov/sites/default/files/files/OpioidRiskTool.pdf (last visited Feb. 21, 2018). 78 See Emerging Solutions in Pain, Managing Patient’s Opioid Use: Balancing the Need and the Risk, http://bit.ly/2zeYZtK (last visited Feb. 21, 2018). 79 Rene Claxton, MD, and Robert Arnold, MD, Screening for Opioid Misuse and Abuse, Palliative Care Network of Wisconsin, http://bit.ly/2kVfwh6 (noting that the Opioid Risk Tool has a “sensitivity” of 45%). Sensitivity is a measure of the true positive rate of a diagnostic test (i.e., the opposite of the rate of false positives). 80 Id. (Clinical interviews have a sensitivity of 77% and the Screener and Opioid Assessment of Pain Patients (SOAPP), a 14-question screening tool, had a sensitivity of 73%). 44 168. Unaware of the flawed science and industry bias behind the tool, certain states and public entities have incorporated the Opioid Risk Tool into their own opioid guidelines, relying on representations about its accuracy made by the Opioid Manufacturers and their paid key opinion leaders. 169. Dr. Webster also popularized the perplexing 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 is to increase a patient’s dose of opioids. He and co-author Beth Dove wrote in their 2007 publication Avoiding Opioid Abuse While Managing Pain that when a doctor sees signs of aberrant behavior in a patient, increasing their opioid dose “in most cases . . . should be the clinician’s first response.”81 Endo distributed this publication to doctors. Years later, Dr. Webster reversed himself, acknowledging that “[pseudoaddiction] obviously became too much of an excuse to give patients more medication.”82 170. Pro-opioid key opinion leaders, like Dr. Portenoy and Dr. Webster, are one of the most important avenues that the Opioid Manufacturers used to spread their false and deceptive statements about the risks and benefits of long-term opioid use. The Opioid Manufacturers knew that doctors rely heavily and less critically on their peers for guidance, and key opinion leaders provide the false appearance of unbiased and reliable support for use of opioids to treat chronic pain. 81 Lynn Webster & Beth Dove, Avoiding Opioid Abuse While Managing Pain (2007). John Fauber, Painkiller Boom Fueled by Networking, MILWAUKEE WISC. J. SENTINEL, Feb. 18, 2012, http://archive.jsonline.com/watchdog/watchdogreports/painkiller-boom-fueled-by- networking-dp3p2rn139609053.html. 82 45 b. Front Groups 171. The Opioid Manufacturers 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 Opioid Manufacturers, these “Front Groups” generated treatment guidelines, unbranded materials, and programs that promoted chronic opioid therapy. As the Tobacco Institute did for the tobacco industry, these Front Groups assisted the Opioid Manufacturers by responding to negative articles, advocating against regulatory changes that would limit opioid prescribing in accordance with the scientific evidence, and conducting outreach to vulnerable patient populations who Opioid Manufacturers wanted to target. 172. These Front Groups depended on the Opioid Manufacturers for funding and, in some cases, for survival. The Opioid Manufacturers also controlled the programs and materials put out by these groups by collaborating on, editing, and approving their content, and by funding their dissemination. In doing so, the Opioid Manufacturers made sure that the Front Groups would generate only the messages that the Opioid Manufacturers wanted to distribute. Despite this, the Front Groups held themselves out as independent and serving the needs of their members – whether patients suffering from pain or doctors treating those patients. 173. The Opioid Manufacturers utilized many different Front Groups. Several of the most prominent are described below, but there are many others. American Pain Foundation 174. The most prominent of the Opioid Manufacturers’ Front Groups was the American Pain Foundation, which received more than $10 million in funding from the Opioid Manufacturers, primarily Endo and Purdue, from 2007 until it closed its doors in May 2012. The 46 American Pain Foundation issued education guides for patients, reporters, and policymakers that touted the benefits of opioids for chronic pain and trivialized their risks, particularly the risk of addiction. American Pain Foundation also launched a campaign to promote opioids for returning veterans, which has contributed to high rates of addiction and other adverse outcomes – including death – among returning soldiers. American Pain Foundation also engaged in a significant multimedia campaign – through radio, television and the internet – to educate patients about their “right” to pain treatment, namely opioids. All of the programs and materials were available nationally and were intended to reach citizens of the State. 175. In 2009 and 2010, more than 80% of American Pain Foundation’s operating budget came from pharmaceutical industry sources.83 By 2011, American Pain Foundation was entirely dependent on incoming grants from Purdue, Cephalon, Endo, and other Opioid Manufacturers to avoid going into debt. 176. American Pain Foundation held itself out as an independent patient advocacy organization. It often engaged in grassroots lobbying against various legislative initiatives that might limit opioid prescribing, and thus the profitability of its sponsors. It was often called upon to provide “patient representatives” for the Opioid Manufacturers’ promotional activities, including for J anssen’s Let’s Talk Pain and Purdue’s Partners Against Pain initiatives. Janssen’s Let’s Talk Pain initiative was a coalition of three Front Groups and Janssen that used patient stories and testimonials to convince doctors and other patients that there was need for more liberal prescribing of opioids for pain.84 Let’s Talk Pain’s catch-phrase acknowledged that non-pain suffers might have doubts about the need for prescribing opioids: “To hear about pain 83 Including industry grants for specific projects, American Pain Foundation received about $2.3 million from industry sources out of total income of about $2.85 million in 2009; its budget for 2010 projected receipts of roughly $2.9 million from drug companies, out of total income of about $3.5 million. 84 See Partners Against Pain (Nov. 26, 2011), http://bit.ly/2pchqPP. 47 is to have doubt; to experience pain is to have certainty.”85 Similarly, Purdue’s Partners Against Pain initiative used literature and audiotapes aimed at physicians and videos aimed at patients to claim that OxyContin changed lives, and “that the risk of addiction from OxyContin was extremely small.”86 177. Although American Pain Foundation fronted as a patient advocacy group, American Pain Foundation functioned largely as an advocate for the interests of the Opioid Manufacturers, not patients. 178. On several occasions, representatives of the Opioid Manufacturers, often at informal meetings at conferences, suggested activities and publications for American Pain Foundation to pursue. American Pain Foundation then submitted grant proposals seeking funding for these activities, knowing that the drug companies would support the proposed initiatives or publication projects. 179. The U.S. Senate Finance Committee began looking into American Pain Foundation in May 2012 to determine the links, financial and otherwise, between the organization and the manufacturers of opioid painkillers. The investigation caused considerable damage to American Pain Foundation’s credibility as an objective and neutral third party, and the Opioid Manufacturers stopped funding it. Within days of being targeted by the Senate investigation, American Pain Foundation’s board voted to dissolve the organization “due to 85 Id. Art Van Zee, MD, The Promotion and Marketing of OxyContin: Commercial Triumph, Public Health Tragedy, AM J PUBLIC HEALTH. 2009 February; 99(2): 221–227, http://bit.ly/2DyLMPs. 86 48 irreparable economic circumstances.” American Pain Foundation “cease[d] to exist, effective immediately.”87 American Academy of Pain Medicine 180. Another front group for the Opioid Manufacturers was the American Academy of Pain Medicine. With the assistance, prompting, involvement, and funding of the Opioid Manufacturers, the American Academy of Pain Medicine issued purported treatment guidelines and sponsored and hosted medical education programs essential to the Opioid Manufacturers’ deceptive marketing of chronic opioid therapy. 181. American Academy of Pain Medicine received substantial funding from opioid manufacturers. For example, American Academy of Pain Medicine maintained a corporate relations council, membership on which cost a substantial sum. The benefits of membership included allowing Opioid Manufacturer employees to present educational programs at off-site dinner symposia in connection with American Academy of Pain Medicine’s marquee event – its annual meeting typically held in Palm Springs, California. American Academy of Pain Medicine describes the annual event as an “exclusive venue” for offering education programs to doctors. Membership in the corporate relations council also allowed drug company executives and marketing staff to meet with American Academy of Pain Medicine executive committee members in small settings. Defendants Endo, Purdue, and Cephalon—and Mallinckrodt’s thenparent, Covidien pllc—were members of the council and presented deceptive programs to doctors who attended this annual event. Endo not only attended American Academy of Pain 87 Charles Ornstein & Tracy Weber, Senate Panel Investigates Drug Companies’ Ties to Pain Groups, WASH. POST, May 8, 2012, https://www.washingtonpost.com/national/health-science/senate-panel-investigates-drug-companiesties-to-pain groups/2012/05/08/ gIQA2X4qBU_ story.html. 49 Medicine conferences, but also funded its continuing medical education programs and distributed its publications. 182. American Academy of Pain Medicine’s conferences heavily emphasized sessions on opioids, rather than other pain management options. At one conference alone, 37 out of roughly 40 sessions were on opioids. American Academy of Pain Medicine’s presidents have included top industry-supported key opinion leaders like Dr. Perry Fine and Lynn Webster. Dr. Webster was even elected president of American Academy of Pain Medicine while under a DEA investigation for overprescribing opioids to his patients. 183. The Opioid Manufacturers were able to influence American Academy of Pain Medicine through their membership on its council, their significant and regular funding, and the election of pro-opioid key opinion leaders to top leadership positions within the organization. 184. In 2016, the American Academy of Pain Medicine changed their name to the Academy of Integrative Pain Management. 185. In 1996, American Academy of Pain Medicine and the American Pain Society, another front group, jointly issued a consensus statement, “The Use of Opioids for the Treatment of Chronic Pain,” which endorsed opioids to treat chronic pain and claimed that the risk of a patient’s addiction to opioids was low. Dr. David Haddox, who co-authored the American Academy of Pain Medicine/American Pain Society statement, was a paid speaker for Purdue at the time (and currently serves as a vice president at Perdue). The other co-author, Dr. Portenoy, was a paid consultant for Purdue and Cephalon. The consensus statement remained on American 50 Academy of Pain Medicine’s website until 2011, when a doctor complained that it had been debunked, and it was taken down.88 186. American Academy of Pain Medicine and American Pain Society issued their own guidelines in 2009 and continued to recommend the use of opioids to treat chronic pain.89 187. Treatment guidelines are widely relied upon by doctors, especially the general practitioners and family doctors targeted by the Opioid Manufacturers. Treatment guidelines not only directly inform doctors’ prescribing practices, but are cited throughout the scientific literature and referenced by third-party payers in determining whether they should cover treatments for specific indications. Pharmaceutical sales representatives employed by Endo, Actavis, and Purdue discuss treatment guidelines with doctors during individual sales visits. 188. At least fourteen of the 21 panel members who drafted the American Academy of Pain Medicine/American Pain Society guidelines, including key opinion leaders Dr. Portenoy and Dr. Perry Fine of the University of Utah, received support from Janssen, Cephalon, Endo, and Purdue. The 2009 guidelines promoted opioids as “safe and effective” for treating chronic pain, despite acknowledging limited evidence, and concluded that the risk of addiction is manageable for patients regardless of past abuse histories.90 One panel member, Dr. Joel Saper, Clinical Professor of Neurology at Michigan State University and founder of the Michigan Headache & Neurological Institute, resigned from the panel because of his concerns that the 2009 guidelines were influenced by contributions that drug companies, including Opioid Manufacturers, made to the sponsoring organizations and committee members. 88 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). 89 Roger Chou et al., Clinical Guidelines for the Use of Chronic Opioid Therapy in Chronic Non-Cancer Pain, 10 J. PAIN 113 (2009). 90 Id. 51 189. The 2009 American Academy of Pain Medicine/American Pain Society guidelines have been a particularly effective channel of deception and have not only influenced treating physicians, but also manipulated the body of scientific evidence on opioids; the guidelines have been cited hundreds of times in academic literature, were disseminated in the State during the relevant time period, are still available online, and were reprinted in the Journal of Pain. The Opioid Manufacturers widely referenced and promoted the 2009 guidelines without disclosing the lack of evidence to support them or the Opioid Manufacturers’ financial support to members of the panel. 190. The Opioid Manufacturers worked together, through Front Groups, to spread their deceptive messages about the risks and benefits of long-term opioid therapy. For example, they combined their efforts through the Pain Care Forum, which began in 2004 as an American Pain Foundation project. Pain Care Forum is comprised of representatives from opioid manufacturers (including Cephalon, Endo, Janssen, and Purdue) and various Front Groups, almost all of which received substantial funding from the Opioid Manufacturers. Among other projects, Pain Care Forum worked to ensure that an FDA-mandated physician education project on opioids was not overly negative and did not have mandatory participation, which the Opioid Manufacturers determined would reduce opioid prescribing. 191. The above-described Front Groups were some of the most prominent, but other groups utilized by the Opioid Manufacturers include: the American Geriatrics Society, the Federation of State Medical Boards, American Chronic Pain Association, the Center for Practical Bioethics, the U.S. Pain Foundation, and the Pain & Policy Studies Group. 52 C. Opioid Manufacturers’ Specific Misconduct and Misrepresentations, Which Created The Opioid Epidemic. 192. The Opioid Manufacturers embarked upon a campaign of false and deceptive assurances grossly understating and misstating the dangerous addiction risks of their opioid drugs, while exaggerating the benefits of opioids for those suffering from chronic pain. 193. Using both direct and indirect marketing to convince physicians and patients that opioids were safe, the Opioid Manufacturers trivialized the risks of long-term opioid use, particularly the risk of addiction, through a series of misrepresentations that have been debunked by the FDA and CDC. These misrepresentations reinforced each other and created the dangerously misleading impression that opioid addiction was rare, preventable, or easily managed. 1. Misrepresentation: Low Risk of Addiction 194. The Opioid Manufacturers expended significant funds to foster the belief among doctors and patients that opioids were low risk because most patients would not become addicted, or because those at greatest risk for addiction could be identified and managed. 195. Purdue created a promotional video in 1998 called “I got my life back,” featuring seven patients whose chronic pain was alleviated when they started taking OxyContin. The video took its title from a quote by one of the patients, Johnny Sullivan, who said that he “got his life back” and was able to return to work by taking OxyContin.91 Purdue distributed the video to 15,000 doctors across the country.92 91 Physicians for Responsible Opioid Prescribing, OxyContin Poster Children 15 Years Later (Sept. 9, 2012), http://bit.ly/2phvsQa. 92 Id 53 196. Two years later, Purdue produced and distributed a follow-up video, “I got my life back – Part II,” featuring six of the previous patients, saying they were still doing well.93 The video also featured clips of North Carolina pain specialist Dr. Alan Spanos, reassuring other physicians that opioids were safe and effective.94 Spanos was on Purdue’s payroll at the time as a paid speaker.95 In the video, Spanos says, “We doctors were wrong in thinking that opioids can’t be used long term. They can be and they should be. We used to think they’d stop working, or the patients would become addicts …These six cases show how wrong those views were.”96 Spanos reiterates again, at the end of the video, “What did we learn from these six patients? Most importantly, they refute the myth that long-term opioid use would inevitably lead to addiction …”97 197. But, for Johnny Sullivan, who inspired the video’s title, OxyContin did not turn out to be the “wonder drug” that Purdue promoted it as.98 Fifteen years after the original video was filmed, Physicians for Responsible Opioid Prescribing followed up with Johnny’s widow, Mary Lou Sullivan. She said, “When Johnny first started taking OxyContin, he actually thought he felt pretty good.”99 But, Johnny soon became addicted to OxyContin, and as he built a tolerance to the drug, he had to start taking larger and larger doses. Ms. Sullivan says, “When he was on high doses of pain medicine, it was just like night and day. It was like a part of him was gone. It got to the point where I hated to even go out to eat with him because he would fall asleep right in the middle of eating. People would be looking and wondering: what in the world is 93 Id. Id. 95 John Fauber and Ellen Gabler, What happened to the poster children of OxyContin?, MILWAUKEE JOURNALSENTINEL (Sept. 8, 2012), http://bit.ly/2kNdmkp. 96 Physicians for Responsible Opioid Prescribing, supra note 91. 97 Id. 98 Id. 99 Id. 94 54 wrong with him.”100 Johnny started experienced extreme drowsiness, a common side effect of opioids. 198. Ms. Sullivan says that OxyContin was so powerful that Johnny couldn’t control his addiction. She says, “Yes, Johnny had chronic pain, but he was also highly addicted to the medicine. The medicine was overpowering him. I mean, he was losing control.”101 He twice overdosed, and had to go to the emergency room.102 199. Things only got worse from there. Ms. Sullivan continued, “He came home one day and his whole windshield was busted. His mirror was knocked off the side. He fell asleep; he hit a mailbox; he knocked a mirror off. Two or three times that happened where he fell asleep driving.”103 But, he was too addicted to ever stop taking the medication. “I told my sons one day, I said, ‘That medicine is going to kill him.’”104 Ms. Sullivan continues, “He might have said he got his life back, but it took his life in the end.”105 Johnny fell asleep at the wheel and was killed in a car wreck on March 2, 2008 – ten years after making the original “I got my life back” video. 200. The original video also featured a back-pain patient, Lauren Cambra, discussed above in Section (B)(1). Ms. Cambra also got addicted to OxyContin, and as her body built up a tolerance, she had to start taking stronger and stronger doses. Ms. Cambra says, “Your body gets used to it, so we got it increased. We got it increased again; and we got it increased again.”106 After her repeated dosage increases, she was so doped up on the drug that she could hardly move. She explains, “You couldn’t have gotten me to go out in the yard and play with my 100 Id. Id. 102 Id. 103 Id. 104 Id. 105 Id. 106 Id. 101 55 grandkids. I didn’t do it.”107 After she lost her house, car, job, and health insurance, she quit taking OxyContin – not by choice, but because she couldn’t afford it anymore.108 It took her six to eight months before the extreme cravings stopped. When asked if she would ever take OxyContin again, she said absolutely not: “It’s a synthetic heroin. I mean, good God – who would just knowingly want to just addict themselves to heroin.”109 201. In addition, Actavis’s predecessor distributed a patient education brochure, Managing Chronic Back Pain, beginning in 2003 that falsely claimed opioid addiction is “less likely if you have never had an addiction problem.” Based on Actavis’s acquisition of its predecessor’s marketing materials along with the rights to Kadian, it appears that Actavis continued to use this brochure in 2009 and beyond. 202. Cephalon and Purdue sponsored the American Pain Foundation’s Treatment Options: A Guide for People Living with Pain (2007), which suggested that addiction is rare and limited to extreme cases of unauthorized dose escalations, obtaining duplicative opioid prescriptions from multiple sources, or theft.110 203. Endo sponsored a website, “Painknowledge,” which claimed in 2009 that “[p]eople who take opioids as prescribed usually do not become addicted.” Another Endo website, PainAction.com, stated “Did you know? Most chronic pain patients do not become addicted to the opioid medications that are prescribed for them.” Endo also distributed an “Informed Consent” document on PainAction.com that misleadingly suggested that only people 107 Id. Id. 109 Id. 110 Am. Pain Found., Treatment Options: A Guide for People Living in Pain (2007) [hereinafter American Pain Foundation, Treatment Options], https://assets.documentcloud.org/documents/277605/apf-treatmentoptions.pdf. 108 56 who “have problems with substance abuse and addiction” are likely to become addicted to opioid medications. 204. Endo distributed a pamphlet with the Endo logo entitled Living with Someone with Chronic Pain, which stated that: “Most health care providers who treat people with pain agree that most people do not develop an addiction problem.” 205. Janssen reviewed, edited, approved, and distributed a patient education guide entitled Finding Relief: Pain Management for Older Adults (2009), which described as “myth” the claim that opioids are addictive, and asserted as fact that “[m]any studies show that opioids are rarely addictive when used properly for the management of chronic pain.” 206. Janssen runs a website, Prescriberesponsibly.com111 that claims that concerns about opioid addiction are “overestimated.” 207. Purdue sponsored American Pain Foundation’s A Policymaker’s Guide to Understanding Pain & Its Management, which claims that less than 1% of children prescribed opioids will become addicted and that pain is undertreated due to “[m]isconceptions about opioid addiction.”112 208. In 2010, Mallinckrodt sponsored an initiative, Collaborating and Acting Responsibly to Ensure Safety (C.A.R.E.S.), through which it published and promoted the book “Defeat Chronic Pain Now!” aimed at chronic pain patients. The book, which remains available for purchase and is promoted online at www.defeatchronicpainnow.com, advises those considering whether to take opioid drugs that “[o]nly rarely does opioid medication cause a true 111 Prescribe Responsibly, http://www.prescriberesponsibly.com/ (last visited Feb. 21, 2018). Am. Pain Found., A Policymaker’s Guide to Understanding Pain and Its Management 6 (2011) [hereinafter American Pain Foundation, Policymaker’s Guide], http://s3.documentcloud.org/documents/277603/apfpolicymakers-guide.pdf. 112 57 addiction.”113 Further, the book advises that even the issue of tolerance is “overblown,” because “[o]nly a minority of chronic pain patients who are taking long-term opioids develop tolerance.” In response to a hypothetical question from a chronic back pain patient who expresses a fear of becoming addicted, the book advises that “[i]t is very uncommon for a person with chronic pain to become ‘addicted’ to narcotics IF (1) he doesn’t have a prior history of any addiction and (2) he only takes the medication to treat pain.” 209. These claims are contrary to longstanding scientific evidence. A meta-analysis of 38 previously-performed studies concluded that on average, the studies found that 21% to 29% of patients will start abusing opioids, and another 8 to 12% will become addicted. 114 A Perduefunded study in 1999 found that 13% of OxyContin users became addicted. 210. The State of New York, in a 2016 settlement agreement with Endo, found that opioid “use disorders appear to be highly prevalent in chronic pain patients treated with opioids, with up to 40% of chronic pain patients treated in specialty and primary care outpatient centers meeting the clinical criteria for [opioid addiction].”115 Endo had claimed on its www.opana.com website that “[m]ost healthcare providers who treat patients with pain agree that patients treated with prolonged opioid medicines usually do not become addicted,” but the State of New York found that Endo had no evidence for that statement. Consistent with this, Endo agreed not to “make statements that . . . opioids generally are non- addictive” or “that most patients who take opioids do not become addicted” in New York. Endo remains free, however, to make those statements in this State. 113 Charles E. Argoff & Bradley S. Galer, Defeat Chronic Pain Now! (2010). Vowles, supra note 69. 115 Assurance of Discontinuance, In re Endo Health Solutions Inc. and Endo Pharm. Inc. (Assurance No. 15-228), at 16, https://ag.ny.gov/pdfs/Endo_AOD_030116-Fully_Executed.pdf. 114 58 211. The CDC has issued guidelines for prescribing opioids that note that there is “[e]xtensive evidence” that opioids are addictive.116 212. The FDA has stated that: because of the “known serious risks” associated with long-term opioid use, including “risks of addiction, abuse, and misuse, even at recommended doses, and because of the greater risks of overdose and death,” opioids should be used only “in patients for whom alternative treatment options” like non-opioid drugs have failed.117 2. Misrepresentation: Pseudoaddiction 213. In addition to mischaracterizing the highly addictive nature of the drugs they were pushing, the Opioid Manufacturers also fostered a fundamental misunderstanding of the signs of addiction. Specifically, the Opioid Manufacturers misrepresented, to doctors and patients, that warning signs and symptoms of addiction were, instead, signs of undertreated pain (i.e., pseudoaddiction), and instructed doctors to increase the opioid prescription dose for patients who were already in danger. 214. One of Purdue’s employees, Dr. David Haddox, invented the concept of “pseudoaddiction,” and key opinion leader Dr. Webster popularized the term. 215. Cephalon and Purdue sponsored Responsible Opioid Prescribing (2007), which taught that behaviors such as “requesting drugs by name,” “demanding or manipulative behavior,” seeing more than one doctor to obtain opioids, and hoarding are all signs of 116 Deborah Dowell et al., CDC Guideline for Prescribing Opioids for Chronic Pain—United States, 2016, MORBIDITY & MORTALITY WKLY. REP., Mar. 18, 2016, at 15 [hereinafter 2016 CDC Guideline], https://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm. 117 Letter from Janet Woodcock, M.D., Dir., Ctr. For Drug Evaluation and Research, U.S. Food and 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), https://www.regulations.gov/contentStreamer?documentId=FDA- 2012-P-08180793&attachmentNumber=1&contentType=pdf.; Letter from Janet Woodcock, M.D., Dir., Ctr. For Drug Evaluation and Research, U.S. Food and Drug Admin., U.S. Dep’t of Health and Human Servs., to Peter R. Mathers & Jennifer A. Davidson, Kleinfeld, Kaplan and Becker, LLP (Mar. 22, 2016), https://www.regulations.gov/contentStreamer?documentId=FDA-2014-P-02050006&attachmentNumber=1&contentType=pdf. 59 pseudoaddiction, rather than true addiction.118 The 2012 edition of Responsible Opioid Prescribing, which remains available online, continues to teach that pseudoaddiction is real.119 216. Janssen sponsored, funded, and edited the Let’s Talk Pain website, which in 2009 stated: “pseudoaddiction . . . refers to patient behaviors that may occur when pain is undertreated . . . . Pseudoaddiction is different from true addiction because such behaviors can be resolved with effective pain management.” 217. Endo sponsored a National Initiative on Pain Control continuing medical education program in 2009 entitled “Chronic Opioid Therapy: Understanding Risk While Maximizing Analgesia,” which promoted pseudoaddiction by teaching that a patient’s aberrant behavior was the result of untreated pain. Endo appears to have substantially controlled National Initiative on Pain Control by funding National Initiative on Pain Control projects; developing, specifying, and reviewing content; and distributing National Initiative on Pain Control materials. 218. Purdue published a pamphlet in 2011 entitled Providing Relief, Preventing Abuse, which described pseudoaddiction as a concept that “emerged in the literature” to describe the inaccurate interpretation of [drug-seeking behaviors] in patients who have pain that has not been effectively treated.” 219. Purdue sponsored a continuing medical education program titled “Path of the Patient, Managing Chronic Pain in Younger Adults at Risk for Abuse.” In a dramatic rendering, a chronic pain patient with a history of drug abuse is depicted telling his doctor that he is taking twice as many hydrocodone pills as directed. The narrator notes that because of pseudoaddiction, the doctor should not assume the patient is addicted even if he persistently asks for a specific drug, seems desperate, hoards medicine, or “overindulges in unapproved escalating doses.” The 118 119 Scott M. Fishman, M.D., Responsible Opioid Prescribing: A Physician’s Guide (2007) at 62. See Scott M. Fishman, M.D., Responsible Opioid Prescribing: A Physician’s Guide (2d ed. 2012). 60 doctor treats this patient by prescribing a high dose, long-acting opioid—the perfect recipe for addiction. 220. Mallinckrodt’s “Defeat Chronic Pain Now!” book, which is still available, and is promoted online at www.defeatchronicpainnow.com, teaches laypeople that “pseudoaddiction” is “caused by their doctor not appropriately prescribing the opioid medication.” It teaches that “[p]seudoaddiction happens when a patient’s opioid medication is not being prescribed in doses strong enough to provide good pain relief, or if the drug is not being prescribed often enough throughout the day. . . When a pseudoaddicted patient is prescribed the proper amount of opioid medication, he or she doesn’t take any extra pills because his or her pain is relieved.” 221. In its 2016 guidelines on opioid prescribing, the CDC rejects pseudoaddiction as a fictitious invention of the Opioid Manufacturers to push more opioid drugs onto already addicted patients. 3. Misrepresentation: Screening and Risk-Mitigation Tools Are Accurate and Effective in Preventing Opioid Misuse 222. In addition to misstating the addiction risk and inventing the pseudoaddiction falsehood, the Opioid Manufacturers created false guidelines stating that addiction risk screening tools, patient contracts, and similar strategies allow them to reliably identify and safely prescribe opioids to patients predisposed to addiction. The Opioid Manufacturers’ misrepresentations made doctors more comfortable prescribing opioids to their patients, and patients more comfortable starting on opioid therapy for chronic pain. 223. Endo paid for a 2007 supplement in the Journal of Family Practice written by a doctor who became a member of Endo’s speakers’ bureau in 2010. The supplement, entitled Pain Management Dilemmas in Primary Care: Use of Opioids, emphasized the effectiveness of screening tools, claiming that patients at high risk of addiction could safely receive chronic 61 opioid therapy using a “maximally structured approach” involving toxicology screens and pill counts. 224. Purdue sponsored a 2011 webinar, Managing Patient’s Opioid Use: Balancing the Need and Risk, which claimed that screening tools, urine tests, and patient agreements prevent “overuse of prescriptions” and “overdose deaths.” 225. As recently as 2015, Purdue has represented in scientific conferences that “bad apple” patients, and not opioids, are the source of the addiction crisis and that once those “bad apples” are identified, doctors can safely prescribe opioids without causing addiction. 226. The 2016 CDC guidelines on opioid prescribing confirm the falsity of these claims. The guidelines explain that there are no studies assessing the effectiveness of risk mitigation strategies “for improving outcomes related to overdose, addiction, abuse or misuse.” 4. Misrepresentation: Opioid Addiction Is Easy to Treat 227. A fourth category of deceptive messaging regarding dangerous opioids is the Opioid Manufacturers’ false assurances regarding the alleged ease of eliminating opioid dependence. The Opioid Manufacturers falsely claimed that opioid dependence can easily be addressed by tapering off the medication and that opioid withdrawal is not a problem, but they failed to disclose that cessation of opioid use becomes more difficult the longer the patient takes the drug. 228. The Opioid Manufacturers also downplayed the severity of opioid detoxification. For example, a continuing medical education sponsored by Endo, entitled Persistent Pain in the Older Adult, claimed that withdrawal symptoms can be avoided by tapering a patient’s opioid dose by 10%-20% for 10 days. Similarly, in the 2010 Mallinckrodt/C.A.R.E.S. publication “Defeat Chronic Pain Now!,” potential opioid users are advised that tolerance to opioids is 62 “easily remedied,” and that “[a]ll patients can be safely taken off opioid medication if the dose is slowly tapered down by their doctor.” 229. In reality, tapering is not a panacea. Clinical guidelines on Tapering Opioid Pain Medication note that opioid-addicted patients have a very high recidivism rate, meaning they often relapse after being tapered off opioids.120 5. Misrepresentation: Higher Doses Are Not Higher Risk 230. A fifth category of false and deceptive statements the Opioid Manufacturers made to sell more drugs is that opioid dosages could be increased indefinitely without added risk. The ability to escalate dosages was critical to Defendants’ efforts to market opioids for long-term use to treat chronic pain because, absent this misrepresentation, doctors would have abandoned treatment when patients built up tolerance and lower dosages did not provide pain relief. In reality, the higher the opioid dose, the greater the risk of overdose and death. 231. Cephalon and Purdue sponsored American Pain Foundation’s Treatment Options: A Guide for People Living with Pain (2007), which claims that some patients “need” a larger dose of an opioid, regardless of the dose currently prescribed. The guide stated that opioids have “no ceiling dose” and insinuated that they are therefore the most appropriate treatment for severe pain. 232. Actavis’s predecessor created a patient brochure for Kadian in 2007 that stated, “Over time, your body may become tolerant of your current dose. You may require a dose adjustment to get the right amount of pain relief. This is not addiction.” Based on Actavis’s acquisition of its predecessor’s marketing materials along with the rights to Kadian, Actavis appears to have continued to use these materials in 2009 and beyond. 120 Intermountain Healthcare, Tapering Opioid Pain Medication (Aug. 2015), http://bit.ly/2lfxUBl. 63 233. Endo sponsored a website, “PainKnowledge,” which claimed in 2009 that opioid dosages may be increased until “you are on the right dose of medication for your pain.” 234. Endo distributed a pamphlet edited by a key opinion leader entitled Understanding Your Pain: Taking Oral Opioid Analgesics (2004 Endo Pharmaceuticals PM0120). In Q&A format, it asked “If I take the opioid now, will it work later when I really need it?” The response is, “The dose can be increased. . . . You won’t ‘run out’ of pain relief.”121 235. Janssen sponsored a patient education guide entitled Finding Relief: Pain Management for Older Adults (2009), which was distributed by its sales force. This guide listed dosage limitations as “disadvantages” of other pain medicines but omitted any discussion of risks of increased opioid dosages. 236. Purdue, according to its own internal documents, found that doctors had the false understanding that the company’s prescription opioid, OxyContin, was “less potent than morphine.”122 It was not. Purdue officials actively exploited this “misperception.”123 237. Purdue’s In the Face of Pain website promoted the notion that if a patient’s doctor does not prescribe what, in the patient’s view, is a sufficient dosage of opioids, he or she should find another doctor who will. 238. Purdue sponsored American Pain Foundation’s A Policymaker’s Guide to Understanding Pain & Its Management, which taught that dosage escalations are “sometimes necessary,” and that “the need for higher doses of medication is not necessarily indicative of addiction,” but inaccurately downplayed the risks from high opioid dosages. 121 Margo McCaffery & Chris Pasero, Endo Pharm., Understanding Your Pain: Taking Oral Opioid Analgesics (Russell K Portenoy, M.D., ed., 2004). 122 Keefe, supra note 28. 123 Id. 64 239. In 2007, Purdue sponsored a continuing medical education entitled “Overview of Management Options” that was available for continuing medical education credit and available until at least 2012. The continuing medical education was edited by a key opinion leader and taught that NSAIDs and other drugs, but not opioids, are unsafe at high dosages. 240. Purdue presented a 2015 paper at the College on the Problems of Drug Dependence, “the oldest and largest organization in the US dedicated to advancing a scientific approach to substance use and addictive disorders,” challenging the correlation between opioid dosage and overdose.124 241. In the 2010 Mallinckrodt/C.A.R.E.S. publication “Defeat Chronic Pain Now!” potential opioid users are warned about of the risk of “[p]seudoaddiction [b]ecause of a [l]ow [d]ose,” and advised that this condition may be corrected through the prescription of a higher dose. Similarly, the book recommends that for chronic pain patients, the opioid dose should be “gradually increased to find the best daily dose, as is done with all the other oral drugs.” The book discusses the risks of NSAIDs and other drugs at higher doses, but does not explain this risk for opioids. 242. Seeking to overturn the criminal conviction of a doctor for illegally prescribing opioids, the Opioid Manufacturers’ Front Groups American Pain Foundation and National Pain Foundation argued in an amicus brief to the United States Fourth Circuit Court of Appeals that “there is no ‘ceiling dose’” for opioids. 243. CDC guidelines on opioid prescribing note that there is “an established body of scientific evidence showing that overdose risk is increased at higher opioid dosages.” The CDC also states that there is an increased risk “for opioid [addiction], respiratory depression, and death 124 The College on Problems of Drug Dependence, About the College, http://cpdd.org. 65 at higher dosages.” That is why the CDC advises doctors to “avoid increasing dosage” to above 90 morphine milligram equivalents per day. 244. Purdue misleadingly promoted OxyContin as being unique among opioids in providing 12 continuous hours of pain relief with one dose. In fact, OxyContin does not last for 12 hours—a fact that Purdue has known at all times relevant to this action. Purdue’s own research shows that OxyContin wears off in under six hours in one quarter of patients and in under 10 hours in more than half. This is because OxyContin tablets release approximately 40% of their active medicine immediately, after which release tapers. This triggers a powerful initial response, but provides little or no pain relief at the end of the dosing period, when less medicine is released. This phenomenon is known as “end of dose” failure, and the FDA found in 2008 that a “substantial proportion” of chronic pain patients taking OxyContin experience it. This not only renders Purdue’s promise of 12 hours of relief false and deceptive, it also makes OxyContin more dangerous because the declining pain relief patients experience toward the end of each dosing period drives them to take more OxyContin before the next dosing period begins, quickly increasing the amount of drug they are taking and spurring growing dependence. Frequent higher doses are the perfect recipe for an overdose. 245. Purdue’s competitors were aware of this problem. For example, Endo ran advertisements for Opana ER referring to “real” 12-hour dosing. Nevertheless, Purdue falsely promoted OxyContin as if it were effective for a full 12 hours. Purdue’s sales representatives continue to tell doctors that OxyContin lasts a full 12 hours. Front Groups supported by Purdue echoed these representations. 66 6. Misrepresentation: Abuse-deterrent Opioid Formulations Are Good at Preventing Abuse 246. Defendants’ deceptive marketing of the so-called abuse-deterrent properties of some of their opioids has created false impressions that these opioids can prevent addiction and abuse. 247. For example, Endo’s advertisements for the 2012 reformulation of Opana ER claimed that it was designed to be crush resistant, in a way that suggested it was more difficult to abuse. This claim was false. The FDA warned in a 2013 letter that Opana ER Extended-Release Tablets’ “extended-release features can be compromised, causing the medication to ‘dose dump,’ when subject to . . . forms of manipulation such as cutting, grinding, or chewing, followed by swallowing.”125 Also troubling, Opana ER can be prepared for snorting using commonly available methods and “readily prepared for injection.”126 The letter discussed “the troubling possibility that a higher (and rising) percentage of [Opana ER Extended-Release Tablet] abuse is occurring via injection.”127 Endo’s own studies, which it failed to disclose, showed that Opana ER could still be ground and chewed. In June 2017, the FDA requested that Opana ER be removed from the market. 7. 248. Misrepresentation: Opioids Are Effective for The Treatment of Chronic Pain To convince doctors and patients that opioids should be used to treat chronic pain, the Opioid Manufacturers also had to persuade them that there was a significant upside to long-term opioid use. But as the CDC guidelines on opioid prescribing make clear, “[n]o evidence shows a long-term benefit of opioids in pain and function versus no opioids for chronic 125 Letter from Janet Woodcock, M.D., Dir., Ctr. For Drug Evaluation and Research, U.S. Food and Drug Admin., U.S. Dep’t of Health and Human Servs., to Robert Barto, Vice President, Reg. Affairs, Endo Pharm. Inc. (May 10, 2013), at 5. 126 Id. at 6. 127 Id. at 6 n.21. 67 pain with outcomes examined at least 1 year later” and that other treatments were more or equally beneficial and less harmful than long-term opioid use.128 The FDA, too, has recognized the lack of evidence to support long- term opioid use. Despite this, 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. 249. For example, Actavis distributed an advertisement claiming that the use of Kadian to treat chronic pain would allow patients to return to work, relieve “stress on your body and your mental health,” and help patients enjoy their lives. 250. Endo distributed advertisements that claimed that the use of Opana ER for chronic pain would allow patients to perform demanding tasks like construction work or work as a chef and portrayed seemingly healthy, unimpaired subjects. 251. Janssen sponsored and edited a patient education guide entitled Finding Relief: Pain Management for Older Adults (2009), which states as “a fact” that “opioids may make it easier for people to live normally.” The guide lists expected functional improvements from opioid use, including sleeping through the night, returning to work, recreation, sex, walking, and climbing stairs. 252. Janssen promoted Ultracet for everyday chronic pain and distributed posters, for display in doctors’ offices, of patients in active professions; the caption read, “Pain doesn’t fit into their schedules.” 253. Sponsored and distributed by Cephalon, Endo, and Purdue, the guidelines Responsible Opioid Prescribing (2007) taught prescribers that relief of pain by opioids is effective at improving patients’ functioning. 128 Id. at 15. 68 254. Cephalon and Purdue sponsored American Pain Foundation’s Treatment Options: A Guide for People Living with Pain (2007), which counseled patients that opioids “give [pain patients] a quality of life we deserve.” This publication is still available online. 255. Endo’s National Initiative on Pain Control website, “PainKnowledge.org,” claimed in 2009 that with opioids, “your level of function should improve; you may find you are now able to participate in activities of daily living, such as work and hobbies, that you were not able to enjoy when your pain was worse.” Elsewhere, the website touted improved quality of life (as well as “improved function”) as benefits of opioid therapy. The grant request that Endo approved for this project specifically indicated National Initiative on Pain Control’s intent to make misleading claims about function, and Endo closely tracked visits to the site. 256. Endo was the sole sponsor, through National Initiative on Pain Control, of a series of continuing medical education programs entitled “Persistent Pain in the Older Patient.”129 One continuing medical education, disseminated via webcast, claimed that chronic opioid therapy has been “shown to reduce pain and improve depressive symptoms and cognitive functioning.” 257. Janssen sponsored and funded a multimedia patient education campaign called “Let’s Talk Pain.” One feature of the campaign was to complain that patients were under-treated. In 2009, a Janssen-sponsored website, part of the “Let’s Talk Pain” campaign, featured an interview edited by Janssen claiming that opioids allowed a patient to “continue to function.” 258. Purdue sponsored the development and distribution of American Pain Foundation’s A Policymaker’s Guide to Understanding Pain & Its Management, which claimed that “[m]ultiple clinical studies” have shown that opioids are effective in improving “[d]aily 129 E.g., NIPC, Persistent Pain and the Older Patient (2007), https://www.painedu.org/Downloads/NIPC/Activities/B173_Providence_RI_%20I nvite.pdf. 69 function,” “[p]sychological health,” and “[o]verall health-related quality of life for chronic pain.” The Policymaker’s Guide was originally published in 2011. 259. Purdue’s, Cephalon’s, Endo’s, and Janssen’s sales representatives have conveyed and continue to convey the message that opioids will improve patient function. 260. As the FDA and other agencies have made clear for years, these claims have no support in the scientific literature. 261. In 2010, the FDA warned Actavis, in response to its advertising of Kadian, that “we are not aware of substantial evidence or substantial clinical experience demonstrating that the magnitude of the effect of the drug [Kadian] has in alleviating pain, taken together with any drug-related side effects patients may experience . . . results in any overall positive impact on a patient’s work, physical and mental functioning, daily activities, or enjoyment of life.” And in 2008, the FDA sent a warning letter to an opioid manufacturer, making it clear “that [the claim that] patients who are treated with the drug experience an improvement in their overall function, social function, and ability to perform daily activities . . . has not been demonstrated by substantial evidence or substantial clinical experience.” 8. Misrepresentation: Alternatives Are As Risky As or Risker Than Opioids 262. The Opioid Manufacturers also falsely and misleadingly emphasized or exaggerated the risks of competing medications like NSAIDs, which are used to treat pain and inflammation, in order to steer doctors and patients to look to opioids first for the treatment of chronic pain. Once again, these misrepresentations by the Opioid Manufacturers contravene pronouncements by and guidance from the FDA and CDC based on the scientific evidence. Indeed, the FDA changed the labels for extended release and long-acting opioids in 2013 and immediate release opioids in 2016 to state that opioids should only be used as a last resort “in 70 patients for which alternative treatment options,” like non-opioid drugs, “are inadequate.” And the CDC opioid prescribing guidelines state that NSAIDs – not opioids – should be the first-line treatment for chronic pain, particularly arthritis and lower-back pain. 9. Misrepresentation: Fentanyl Is Safe for Chronic Pain 263. Fentanyl is an extremely strong opioid that is indicated only to treat cancer patients with severe pain for whom other opioids have ceased being effective. Fentanyl is “100 times more powerful than morphine.”130 264. Cephalon deceptively marketed its brand-name fentanyl 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 immediate release opioids. Neither is approved for or has been shown to be safe or effective for chronic pain. Indeed, the 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, including the high risk of “serious and life-threatening adverse events” and abuse. The FDA also issued a Public Health Advisory in 2007 emphasizing that Fentora should only be used for cancer patients who are opioid-tolerant and should not be used for any other conditions, such as migraines, post-operative pain, or pain due to injury.131 Specifically, the FDA advised that Fentora “is only approved for breakthrough cancer pain in patients who are opioid-tolerant.”132 130 Rich Lord et al., Overdosed: How Doctors Wrote the Script for An Epidemic, PITTSBURGH POST-GAZETTE (May 22, 2016), http://bit.ly/2wkVP6y. 131 See U.S. Food & Drug Admin., Public Health Advisory: Important Information for the Safe Use of Fentora (fentanyl buccal tablets) (Sept. 26, 2007), http://bit.ly/2leUcDp. 132 Id. 71 265. Despite this, Cephalon conducted and continues to conduct a well-funded campaign to promote Actiq and Fentora for chronic pain and other non-cancer conditions for which it was not approved, appropriate, and for which it is not safe. As part of this campaign, Cephalon used continuing medical education programs, speaker programs, key opinion leaders, journal supplements, and detailing by its sales representatives to give doctors the false impression that Actiq and Fentora are safe and effective for treating non-cancer pain. 266. For example, Cephalon paid to have a continuing medical education it sponsored, Opioid-Based Management of Persistent and Breakthrough Pain, published in a supplement of Pain Medicine News in 2009. The continuing medical education instructed doctors that “[c]linically, broad classification of pain syndromes as either cancer- or non-cancer-related has limited utility” and recommended Actiq and Fentora for patients with chronic pain. 267. Cephalon’s sales representatives set up hundreds of speaker programs for doctors, including many non-oncologists, which promoted Actiq and Fentora for the treatment of noncancer pain. 268. In December 2011, Cephalon widely disseminated a journal supplement entitled “Special Report: An Integrated Risk Evaluation and Mitigation Strategy for Fentanyl Buccal Tablet (FENTORA) and Oral Transmucosal Fentanyl Citrate (ACTIQ)” to Anesthesiology News and Pain Medicine News – two publications that are sent to thousands of anesthesiologists and other medical professionals. The Special Report openly promotes Fentora for “multiple causes of pain” – and not just cancer pain. 269. 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 approved by the FDA for such uses. 72 10. Opioid Manufacturers Cover Up That Their Drugs Are Being Diverted to The Illegal Market 270. Purdue unlawfully and unfairly failed to report or address illicit and unlawful prescribing of its drugs, despite knowing about it for years. Purdue’s sales representatives have maintained a database since 2002 of doctors suspected of inappropriately prescribing its drugs. Purdue never reported these doctors to the DEA. In an interview with the Los Angeles Times, Purdue’s senior compliance officer acknowledged that in five years of investigating suspicious pharmacies, Purdue failed to take action – even where Purdue employees personally witnessed the diversion of its drugs. 271. The same was true of prescribers; despite its knowledge of illegal prescribing, Purdue did not report that a Los Angeles clinic prescribed more than 1.1 million OxyContin tablets and that Purdue’s district manager described it internally as “an organized drug ring” until years after law enforcement had already shut the pharmacy down. In doing so, Purdue protected its own profits at the expense of public health and safety.133 272. Like Purdue, Endo has been cited for its failure to set up an effective system for identifying and reporting suspicious prescribing. In its settlement agreement with Endo, the State of New York found that Endo failed to require sales representatives to report signs of abuse, diversion, and inappropriate prescribing, and failed to prevent sales representatives from visiting prescribers whose suspicious conduct had caused them to be placed on a no-call list. 11. Opioid Manufacturers Targeted Susceptible Prescribers and Vulnerable Patient Populations. 273. As a part of their deceptive marketing scheme, the Opioid Manufacturers identified and targeted susceptible prescribers and vulnerable patient populations in the U.S., 133 Harriet Ryan et al., More Than 1 Million OxyContin Pills Ended Up in the Hands of Criminals and Addicts. What the Drugmaker Knew, L.A. TIMES, July 10, 2016, http://www.latimes.com/projects/la-me-oxycontin-part2/. 73 including this State. For example, the Opioid Manufacturers focused their deceptive marketing on primary care doctors, who were more likely to treat chronic pain patients and prescribe them drugs, but were less likely to be educated about treating pain and the risks and benefits of opioids and were therefore more likely to accept the Opioid Manufacturers’ misrepresentations without question. 274. The Opioid Manufacturers also targeted vulnerable patient populations like the elderly and veterans, who tend to suffer from chronic pain. The Opioid Manufacturers targeted these vulnerable patients even though the risks of long-term opioid use were significantly greater for them. For example, the CDC has found that elderly patients who take opioids suffer from elevated fall and fracture risks, reduced renal function and medication clearance, and a smaller window between safe and unsafe dosages. The CDC states that there must be “additional caution and increased monitoring” to minimize the risks of opioid use in elderly patients. The same is true for veterans, who are more likely to use anti-anxiety drugs (benzodiazepines) for post-traumatic stress disorder, which interact dangerously with opioids. D. The Opioid Distributors Facilitated Diversion Of Prescription Opioids to The Illegal Market 1. Diversion of Opioids from Licensed Prescribers to The Illegal Market Is Fueling the Opioid Epidemic 275. A small minority of doctors are fueling a huge portion of the opioid epidemic. “U.S. Attorney David Hickton, co-chair of the National Heroin Task Force, placed some of the blame for an epidemic of related problems of heroin and opioid pill abuse on the small percentage of doctors who we call drug dealers with white coats.”134 Doctors who are willing to 134 Lord, supra note 120. 74 write almost anyone a prescription for opioids are sometimes referred to as “script doctors” or “script docs.”135 276. Despite being warned “time and again that pain pills can addict and kill, hundreds of doctors … wantonly prescribed painkillers, setting the stage for the worst drug epidemic in U.S. history as brand-name opioids joined with cheap heroin.”136 For example, the Pittsburg Post-Gazette reports, “Dr. Gary A. Shearer continued to prescribe painkillers, even as 14 of his patients died of drug overdoses …. Maryland psychiatrist Patricia A. Newton kept prescribing to a struggling addict … until that patient turned up, unconscious, in a Maryland hospital bathroom with a syringe and 545 pills. … Physician Michael B. Rosen was prescribing nearly 1,000 highly addictive pills per month to a patient who told a Pennsylvania detective that he ‘did not have any serious pain,’ but could get ‘whatever he wanted’ from ‘Dr. Feel Good.’”137 277. The National Survey on Drug Use and Health (2006) found that 19.1% of recreational opioid users said they got their drugs from a single doctor who was willing to prescribe them. 278. In Kentucky, one of the hardest hit by the opioid crisis, 1.2% of doctors ultimately faced some sort of disciplinary action for overprescribing opioids, when the state cracked down, starting in 2011.138 As a result of Kentucky’s recent enforcement efforts, “Opioid prescribing in Kentucky dropped dramatically, and drug overdoses bucked the national trend by edging downward.”139 In contrast, Pennsylvania saw only a tiny drop in opioid prescribing in recent 135 James A. Inciardi, PhD et al., Prescription Opioid Abuse and Diversion in an Urban Community: The Results of an Ultrarapid Assessment, Pain Medicine, Volume 10, Issue 3, 1 April 2009, Pages 537–548, http://bit.ly/2BFKg0U. 136 Lord, supra note 120. 137 Id. 138 According to an analysis by the Pittsburgh Post-Gazette, looking at the years 2011 to 2015. See id. 139 Id. 75 years, while opioid overdoses in the state “climbed relentlessly.”140 “Pennsylvania’s medical licensing boards don’t have access to data on how individual physicians are prescribing,” and so they have taken little disciplinary action against doctors who overprescribed opioids.141 The Pittsburgh Post-Gazette compared enforcement efforts across various states and found: when it comes to reducing opioid abuse, “Getting tough on doctors works.”142 279. In a study of opioid overdose deaths in Utah in 2013, the decedent’s healthcare provider was the primary source of the opioids in 92% of the deaths.143 2. Problem Pharmacies Are Also Complicit in Fueling the Opioid Epidemic 280. Certain bad-actor pharmacies or pharmacy employees are responsible for diverting substantial amounts of opioids from the lawful market to the black market. 281. Pharmacy employees who are willing to break the law to sell high-value pills on the black market use a variety of methods to illegally acquire pills from their employer. Some pharmacists or pharmacy technicians are subtle, and skim a few pills each time a patient fills an opioid prescription.144 The patient will be unlikely to notice if only one or two pills are missing. Bolder pharmacy employees steal entire bottles from the pharmacy inventory.145 Pharmacists may also create fake pharmacy accounts in the name of deceased patients or via identity theft, and use the fake accounts to fill prescriptions for opioids.146 140 Id. Id. 142 Id. 143 Johnson EM, Lanier WA, Merrill RM, Unintentional prescription opioid-related overdose deaths: description of decedents by next of kin or best contact, Utah, 2008-2009. J. Gen Intern Med. (Apr. 2013), 28(4):522-9. 144 Jamie Almond, Detective, Pharmacy Crimes, (Feb. 2014), http://bit.ly/2BsgiJK. 145 Id. 146 Id. 141 76 282. Sometimes entire pharmacies are just “fronts for criminal drug rings.”147 For example, two brothers who owned a Los Angeles pharmacy, Global Compounding, were found guilty in 2017 of operating “a years-long narcotic drug trafficking … conspiracy that illegally sold prescription narcotics to black market customers across the United States.”148 “These defendants used their pharmacy as a front for drug dealing, and they used multiple bank accounts to conceal their illicit proceeds,” said United States Attorney Eileen M. Decker. 149 The brothers were caught after years of shipping thousands of oxycodone pills to organized crime operations in Columbus, Ohio.150 To conceal these black market drugs sales, the brothers “used their pharmacy to generate records that falsely indicated that prescriptions had been filled in the names of identity theft victims.”151 The brothers’ pharmacy ordered nearly 100,000 oxycodone pills from legitimate prescription drug distributors, yet “reported only half of those pills to state authorities who track prescription drug sales.”152 And there was “a 15-month period with no reporting at all.”153 Although the pharmacy concealed many of its suspicious orders from state regulators, the drug distributors had all the data and knew exactly how many pills the pharmacy was ordering. 283. The Pharmacy Defendants failed to track and report suspicious sales as required by New jersey Law. 284. New Jersey law imposes duties and requirements on the conduct of the Pharmacy Defendants. These requirements establish a standard of care for pharmacy conduct. 147 Bill Whitaker, Whistleblowers: DEA Attorneys Went Easy on McKesson, The Country’s Largest Drug Distributor, CBS NEWS (Dec. 17, 2017), http://cbsn.ws/2B2ddno. 148 Department of Justice, Owners of West L.A. Pharmacy Found Guilty in Sweeping Scheme to Illegally Distribute Prescription Narcotics (Jan. 23, 2017), http://bit.ly/2D0XEZF. 149 Id. 150 Id. 151 Id. 152 Id. 153 Id. 77 285. New Jersey law requires pharmacists to review each controlled substance prescription and, prior to dispensing medication, make a professional determination that the prescription is effective and valid. See N.J.A.C. 13:45H-7.4, see also N.J.A.C. 13:45H-7.8. 286. Furthermore, N.J.A.C. 13:45H-7.4 states, “[t]he responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner, but a corresponding responsibility rests with the pharmacist who fills the prescription.” 287. Therefore, pharmacists are required to ensure that prescriptions for controlled substances are valid, and that they are issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice. 288. Under New Jersey law, pharmacy registrants are required to “provide effective controls and procedures to guard against theft and diversion of controlled substances” N.J.A.C. 13:45H-2.1, and maintain and file complete and accurate inventory records with the appropriate state and federal regulators. See N.J.A.C. 13:45H-5.9 – 5.13. 289. In addition, pharmacists “shall inform the Drug Control Unit of suspicious orders when discovered by the registrant. Suspicious orders include orders of unusual size, orders deviating substantially from a normal pattern, and orders of unusual frequency.” N.J.A.C. 13:45H-2.4. 290. On information and belief, the Pharmacy Defendants failed to provide effective controls and procedures to guard against diversion of prescription opioids, failed to maintain complete and accurate inventory records, and failed to report suspicious orders. 291. On information and belief, the Pharmacy Defendants regularly filled opioid prescriptions that would have been deemed questionable or suspicious by a reasonably prudent pharmacy. 78 292. On information and belief, the Pharmacy Defendants have not adequately trained or supervised their employees at the point of sale to investigate or report suspicious or invalid prescriptions, or protect against corruption or theft by employees or others. 293. On information and belief, the Pharmacy Defendants utilize monetary compensation programs for certain employees that are based, in part, on the number of prescriptions filled and dispensed. This type of compensation creates economic disincentives within the companies to change their practices. For example, there have been reports of chain store supervisory personnel directing pharmacists to fill prescriptions regardless of the red flags presented. 294. The Pharmacy Defendants have violated a voluntarily-undertaken duty to the public which they have assumed by their own words and actions. In news reports and other public documents, it has been reported that the Pharmacy Defendants, through their words or actions, have assured the public that issues affecting public health and safety are the highest priority for the defendants. 295. For example, in 2015, CVS publically stated that, “the abuse of controlled substance pain medication is a nationwide epidemic that is exacting a devastating toll upon individuals, families and communities. Pharmacists have a legal obligation under state and federal law to determine whether a controlled substance was issued for a legitimate purpose and to decline to fill prescriptions they have reason to believe were issued for a non-legitimate purpose.” 296. In failing to take adequate measures to prevent substantial opioid-related injuries to the County and her residents, the Pharmacy Defendants have breached their duties under the 79 “reasonable care” standard, professional duties under the relevant standards of professional practice, and requirements established by the laws of the State of New Jersey. 297. It is foreseeable to the Pharmacy Defendants that filling invalid or suspicious prescriptions for opioids would cause harm to individual pharmacy customers, the County citizens who may use the wrongfully-dispensed opioids, and the County itself. 298. It is reasonably foreseeable to the Pharmacy Defendants that, when unintended users gain access to opioids, tragic preventable injuries will result, including overdoses and death. It is also reasonably foreseeable many of these injuries will be suffered by the County and her citizens. 299. At all relevant times, the Pharmacy Defendants have engaged in improper dispensing practices, and continue to do so, despite knowing full well they could take measures to substantially eliminate their complicity in opioid diversion. 300. At all relevant times, the Pharmacy Defendants engaged in these activities, and continue to do so, knowing full well that the County, in its role of providing protection and care for its citizens, would provide or pay for additional medical services, emergency services, law enforcement, and other necessary services, as well as by the loss of substantial economic productivity that contributes to the health and well-being of the County. 301. It is reasonably foreseeable to the Pharmacy Defendants that the County would be forced to bear substantial expenses as a result of the Pharmacy Defendants’ acts. 302. The Pharmacy Defendants were on notice of their ongoing negligence or intentional misconduct towards the County in part because of their history of being penalized for violating their duties and legal requirements in other jurisdictions. 80 3. Drug Distributors Have a Non-Delegable Duty to Prevent Shipment of Suspicious Orders of Opioids and Report Them to The DEA 303. The Controlled Substances Act is the “legal cornerstone” of the federal government’s war against drug abuse.154 To enforce the Controlled Substances Act, the Drug Enforcement Administration divides categories of drugs into tiers, called “schedules,” with lower-numbered schedules being more highly regulated.155 In deciding which drugs should be in which “schedule,” the DEA considers four factors: the drug’s “(1) potential for abuse, (2) safety, (3) addictive potential and (4) whether or not it has any legitimate medical applications.”156 304. Schedule I drugs are substances that have no federally-recognized medical use, high risk of abuse, and severe addictive potential, and are extremely dangerous.157 Schedule I drugs include: heroin and ecstasy.158 305. Schedule II drugs are drugs that are slightly less dangerous and have slightly less abuse potential than Schedule I drugs.159 Schedule II includes some drugs with federallyrecognized medical applications. Drugs on Schedule II include: cocaine, methamphetamine (“meth”), and nearly all opioid medications. 306. Schedule III drugs are defined as having low to moderate abuse potential, such as anabolic steroids.160 And Schedule IV drugs are defined as having low abuse and addictive potential, such as anti-anxiety medications (Xanax) and sleeping pills (Ambien).161 Schedule V 154 American Academy of Pediatrics, Understanding Drug Schedules, HEALTHYCHILDREN.ORG, (Nov. 21, 2015), http://bit.ly/2C09Dtv. 155 Id. 156 Id. 157 Id. 158 Id. 159 Id. 160 Id. 161 Id. 81 drugs are the least dangerous controlled substances, and include many cough syrups (such as Robitussin AC). 307. Schedule II drugs are the most highly regulated prescription drugs. Pharmacies are not permitted to dispense Schedule II drugs with any refills. Every time a patient asks for a refill, their doctor must write out a new prescription. In contrast, Schedule III and IV drugs may be dispensed with up to 5 refills. 308. For all Schedule II substances, drug distributors must report to the DEA all purchases and shipments, and their current inventory of the drug.162 This data is stored in the DEA’s Automation of Reports and Consolidated Orders System (ARCOS) database.163 309. In addition, federal law requires distributors to have a system in place to identify and report “suspicious orders” to the DEA’s Office of Diversion Control.164 310. “Suspicious orders” include orders of an unusual size or frequency, or deviating substantially from the pharmacy’s normal ordering pattern.165 The DEA has specified that “suspicious orders” include “[g]eographic anomalies,” such as a town ordering more drugs that its population could possibly consume.166 Orders are also “suspicious,” says the DEA, if they have an unusual composition, such as “100 percent” of a pharmacy’s orders being for opioid medications.167 162 Department of Justice, ARCOS Questions & Answers, https://www.deadiversion.usdoj.gov/arcos/faq.htm (last visited Feb. 21, 2018). 163 Id. 164 21 C.F.R. § 1301.74(b). 165 See 21 CFR § 1301.74(b). 166 Larry Cole, A Pharmacist’s Obligation: Corresponding Responsibility and Red Flags of Diversion, Quarles & Brady (Aug. 11, 2013), http://bit.ly/2pjxXRY. 167 See Southwood Pharmaceuticals, Inc.; Revocation of Registration, 72 FR 36487-01, 2007 WL 1886484 (July 2, 2007) (DEA enforcement action). 82 311. In addition to reporting suspicious orders, distributors must also stop shipment on any order which is flagged as suspicious or potentially suspicious.168 4. The Opioid Distributors Breached their Duties to Report and Not Fill Suspicious Orders 312. Because distributors ship such large volumes of controlled substances to pharmacies across the country, they are the first major line of defense in preventing the diversion of controlled substances from legitimate channels into the illicit market. In dereliction of their duties, the Opioid Distributors turned a blind eye to pharmacies that repeatedly placed suspicious orders and failed to report them to the DEA. 313. The Opioid Distributors should have flagged that something was wrong with orders going to certain locales due to the enormous number of pills that were shipped to these locations, relative to their population size. Vox reports, “Opioid distributors supplied a ton of these pills, even when they should have known they were going to people who were misusing the drugs. This is backed by data that shows that in some counties and states there were more prescribed bottles of painkillers than there were people — a sign that something was going very wrong.”169 For example, data for the Cherokee Nation shows that “845 million milligrams of opioids were distributed in the 14 counties that make up the Cherokee Nation.”170 “[I]f you assume an average pill size of 20 milligrams” and an average 30-day supply of pills, this quantity is enough for every tribal member living in the Cherokee Nation to consume nearly 8 bottles of 168 See Southwood Pharm., Inc., 72 Fed. Reg. 36,487, 36,501 (Drug Enf’t Admin. July 3, 2007); Masters Pharmaceutical, Inc. v. Drug Enforcement Administration, No. 15-11355 (D.C. Cir. June 30, 2017). The distributor may, however, ship a potentially suspicious order if, after conducting due diligence, the distributor can determine that the order is not likely to be diverted into illegal channels. 169 German Lopez, US officials are starting to treat opioid companies like Big Tobacco — and suing them, Vox (Aug. 9, 2017), http://bit.ly/2uq4M20. 170 Id. 83 opioid pills.171 Although Cherokee tribe members make up only 4.5% of Oklahoma’s population, “[a]lmost a third of the prescription painkillers distributed in that state went to the Cherokee Nation.”172 314. The Opioid Distributors should have been tipped off to suspicious orders not only by huge order volumes relative to population size, but also by the high proportion of opioids ordered by certain pharmacies. For some pharmacies, all or almost all they ordered were opioids. The Atlantic reports, “Eleven drug stores, mostly independents, are scattered about a tiny city of 1,500 people. Many have opened in the past decade—four in the past three years. And prescription pain drugs are one of the best-selling items—the very best seller at some. Most pharmacies here and in surrounding Clay County… sell few items over the counter, focusing on prescriptions and little else. Clay’s residents filled prescriptions for 2.2 million doses of hydrocodone and about 617,000 doses of oxycodone in the 12-month period ending last September—that’s about 150 doses for every man, woman, and child.”173 315. Opioid Distributors also should have known something was amiss with pharmacies that had enormous aggregate increases in order volume for opioids. For example, Unique Pain Management, a clinic in an Ohio town of 6,500, increased its monthly order volume for oxycodone from 67,800 doses to 104,400 doses, over a short period.174 Its distributor didn’t even investigate this 54% increase.175 171 Id.; Nate Hegyi, Cherokee Nation Sues Wal-Mart, CVS, Walgreens Over Tribal Opioid Crisis, NPR (Aug. 25, 2017), http://n.pr/2BXkguV (177,000 tribal members live in the Cherokee Nation’s 14 counties). 172 Hegyi, supra note 161. 173 Phil Galewitz, The Pharmacies Thriving in Kentucky's Opioid-Stricken Towns, THE ATLANTIC (Feb. 7, 2017), http://theatln.tc/2lwYKF5. 174 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), http://wapo.st/2BsP31C. 175 Id. 84 316. In the 1990s, the distributors weren’t even reporting their drug shipment statistics correctly, let alone flagging suspicious orders for the DEA. A Washington Post investigation found that in the 1990s, the Opioid Distributors “had been reporting their drugs sales inconsistently or not at all.”176 Yet, they didn’t face disciplinary action from the DEA. John J. Coleman, the third-ranking administrator at the DEA in the mid-1990s, said in a recent interview that the distributors were “ignored for years and years and years.”177 317. That changed in 2005, when a new director ascended to lead the DEA’s Office of Diversion Control. Joe Rannazzisi, “a street-smart New Yorker who held degrees in pharmacy and law … had begun his career as a DEA street agent and then a supervisor in Detroit before working his way to the top of the diversion office.”178 Finding himself as the nation’s chief drug enforcer as the nation faced an ever-expanding opioid epidemic, Rannazzisi decided to focus the DEA’s attention on the distributors, who weren’t fulfilling their obligation to report and not fill suspicious orders.179 To Rannazzisi, the distributors were the key link in the supply chain that was fueling the opioid epidemic. While the Opioid Manufacturers were large companies with an obligation to monitor their sales to distributors, they often didn’t know where their drugs went after the distributors took over. The distributors, as the middlemen that shipped the drugs to pharmacies all across the country, knew where the drugs went and who was ordering them.180 And the three largest distributors, McKesson, Cardinal, and AmerisourceBergen supplied 85% of 176 Lenny Bernstein and Scott Higham, Investigation: The DEA slowed enforcement while the opioid epidemic grew out of control, WASH. POST (Oct. 22, 2016), http://wapo.st/2kMNO77. 177 Id. 178 Id. 179 Id. 180 Id. 85 the national drug market.181 These companies had the internal data to identify the problem pharmacies and prescribers and stop shipping to them. 318. In 2005, Rannazzisi launched the Office of Diversion Control’s “Distributor Initiative,” and in 2006, “the diversion office sent a letter to distributors across the country, reminding them that they were required by law to ensure that their drugs were not being diverted to the black market.”182 Rannazzisi was putting the distributors on notice that they needed “to monitor their sales in real time, withhold drug shipments if they detected suspicious activity and report those red flags to the DEA.”183 319. Frank Younker, “the former DEA supervisor in Cincinnati, said the agency had no other choice” but to go after the Opioid Distributors.184 ‘The distributors could have stopped what was going on, but they didn’t,” he said. “They were doing the bare minimum. Why would you want to cut off a customer that’s paying you $2 million a year? They have sales reps and sales quotas and bonus structures and employees of the month. Everyone was making a lot of money.”185 320. In 2007, the DEA’s diversion office brought “an enforcement case against McKesson — now the nation’s largest drug distributor and the fifth-largest corporation in the country. The DEA accused the company of failing to report hundreds of suspicious orders from online pharmacies.”186 As a result of McKesson’s actions, “millions of dosage units of controlled substances were diverted from legitimate channels of distribution,” according to a Justice 181 Id. Id. 183 Id. 184 Id. 185 Id. 186 Id. 182 86 Department statement in 2008.187 McKesson settled the case, agreeing to pay a $13 million fine.188 321. Also in 2008, the DEA’s diversion office “filed a case against Cardinal Health, another member of the Big Three wholesalers. DEA investigators alleged that the company was sending millions of doses of painkillers to online and retail pharmacies without alerting investigators to an obvious sign of illegal diversion.”189 Cardinal settled the allegations, agreeing to pay a $34 million fine.190 322. At the time, online pharmacies were a huge contributor to the opioid epidemic. But in 2009, “a federal law made it illegal to distribute controlled substances online and required doctors to see their patients face-to-face before writing prescriptions.”191 323. “In late 2011, Rannazzisi’s office filed warrants to yet again inspect the records of a Cardinal warehouse. Investigators alleged that the company was overlooking escalating oxycodone orders from pharmacies in Florida.”192 A Washington Post investigative report uncovered “an internal Cardinal email from 2010 showing that the company’s own investigator had warned against selling narcotics to Gulf Coast Medical Pharmacy, an independent drugstore in Fort Myers, Fla., citing suspicions that the pills were winding up on the street. Despite the warning, Cardinal hadn’t notified the DEA or cut off the supply of drugs. Instead, the company shipped increasing quantities of pain pills to Gulf Coast.”193 In 2011 alone, Cardinal sent more than 2 million doses of oxycodone to Gulf Coast.194 Cardinal was sending pharmacies of a 187 Id. Id. 189 Id. 190 Id. 191 Id. 192 Id. 193 Id. 194 Id. 188 87 similar size an average of only 65,000 doses per year, according to Cardinal’s own internal data.195 “I had the case of my dreams” against Cardinal, Rannazzisi said. 324. After being tipped off about the DEA investigation, rather than fix the problem, Cardinal called in its lobbyists, who had contacts within the current Bush administration.196 As Rannazzisi was getting ready to file an enforcement action to suspend Cardinal’s license to distribute opioids and other drugs, he received a call from James M. Cole, the Deputy Attorney General at the Department of Justice, demanding that Rannazzisi come meet with Cole in Washington before taking any action.197 After arriving in Cole’s office, Rannazzisi said, “I’ve done hundreds of these cases, and I’ve never been called over to the Justice Department to explain myself.”198 Rannazzisi demanded to know why this case was any different.199 From there, the meeting with Cole became “very adversarial.”200 325. Undeterred, Rannazzisi decided to file against Cardinal anyway. 201 Cardinal Health settled the case, agreeing to pay a $44 million fine for failure to report suspicious opioid orders.202 326. Between 2012 – the year Rannazzisi filed against Cardinal – and 2015, Cardinal Health increased its lobbying spending by 82% compared to the previous four-year period.203 Jon Giacomin, the CEO of Cardinal Health, is chairman of the board of directors at Healthcare 195 Id. Id. 197 Id. 198 Id. 199 Id. 200 Id. 201 Id. 202 Lenny Bernstein and Scott Higham, Cardinal Health fined $44 million for opioid reporting violations, WASH. POST (Jan. 11, 2017), http://wapo.st/2kMED6y. 203 See Center for Responsive Politics, Cardinal Health Summary, http://bit.ly/2C0G7Sh (last visited Feb. 21, 2018) (Cardinal’s spending increased from $4.757 million to $8.655 million). 196 88 Distribution Alliance, a pro-distributor lobbyist organization.204 Between 2012 and 2014, Healthcare Distribution Alliance increased its lobbying spending by 40% compared to the previous period.205 Both Cardinal and Healthcare Distribution Alliance heavily lobbied Congress to make it more difficult for the DEA to bring enforcement actions against distributors.206 327. In September 2014, Congressman Tom Marino, one of the distributor’s top advocates in Congress, pressured the DEA Administrator, the head of the entire agency, to take action against Rannazzisi, who Marino saw as too aggressive against industry. 207 Facing increasing pressure over the course of the next year, the DEA Administrator removed Rannazzisi as chief of the agency’s Office of Diversion Control in August 2015.208 328. President Trump nominated Tom Marino to be his drug czar in 2017 to lead the fight against opioid abuse. Marino was forced to withdraw his name “in the wake of reports that as a congressman he did the bidding of the pharmaceutical industry.”209 329. While Rannazzisi was still at the DEA’s diversion enforcement office, the agency was building a huge case against McKesson, the nation’s largest distributor. “By 2014, [DEA] investigators said they could show that the company had failed to report suspicious orders involving millions of highly addictive painkillers sent to drugstores from Sacramento, Calif., to Lakeland, Fla. Some of those went to corrupt pharmacies that supplied drug rings.” 210 David 204 Healthcare Distribution Alliance, http://bit.ly/2pnuwtv (last visited Feb. 21, 2018). Center for Responsive Politics, Healthcare Distribution Alliance, http://bit.ly/2BINZed (last visited Feb. 21, 2018). 206 Bernstein, Investigation: The DEA slowed enforcement while the opioid epidemic grew out of control, supra note 166. 207 Scott Highman and Lenny Bernstein, The drug industry's triumph over the DEA, CHICAGO TRIBUNE (Oct. 15, 2017), http://trib.in/2B7CnNL. 208 Bernstein, Investigation: The DEA slowed enforcement while the opioid epidemic grew out of control, supra note 166. 209 Peter Baker, Tom Marino, Drug Czar Nominee, Withdraws in Latest Setback for Trump’s Opioid Fight, N.Y. TIMES (Oct. 17, 2017), http://nyti.ms/2gMOJT9. 210 Lenny Bernstein, ‘We feel like our system was hijacked’: DEA agents say a huge opioid case ended in a whimper, WASH. POST (Dec. 17, 2017), http://wapo.st/2BBbmpa. 205 89 Schiller, who led the McKesson investigation, “and members of his team wanted to fine the company more than $1 billion. More than anything else, they wanted to bring the first-ever criminal case against a drug distribution company, maybe even walk an executive in handcuffs out of McKesson’s towering San Francisco headquarters to send a message to the rest of the industry.”211 Schiller said, “This is the best case we’ve ever had against a major distributor in the history of the Drug Enforcement Administration.”212 330. “DEA investigators, agents and supervisors who worked on the McKesson case said the company paid little or no attention to the unusually large and frequent orders placed by pharmacies, some of them knowingly supplying drug rings.”213 To avoid its obligation to report suspicious orders to the DEA, McKesson defined a “suspicious order” as one where a pharmacy’s order volume went over the pharmacy’s drug quota by a certain percentage. These quotas, or “thresholds,” were numbers assigned to each pharmacy internally by McKesson. To ensure opioid orders wouldn’t go over the threshold, McKesson just kept raising the pharmacies’ thresholds. A DEA investigator told 60 Minutes that “to get around reporting suspiciously large orders, at the time, McKesson would simply raise the limit a pharmacy was allowed. No order, no matter how large, was ever reported as suspicious.”214 331. For example, Jeffrey Clawson, a pharmacist in Brighton, Colorado, repeatedly bumped up against his thresholds, so McKesson just kept raising them. Brighton is a small town with a population of only 38,000, yet Clawson was selling as many as 2,000 opioid pills per day.215 “[T]he DEA’s Denver field division began a criminal investigation into Clawson, making 211 Id. Id. 213 Id. 214 Bill Whitaker, Whistleblowers: DEA Attorneys Went Easy on McKesson, supra note 137. 215 Lenny Bernstein, ‘We feel like our system was hijacked’, supra note 200. 212 90 undercover buys and monitoring the size of his drug purchases. Most of the drugs came from McKesson’s warehouse in Aurora, northeast of Denver, records show. Under federal law, McKesson is required to notify the DEA about any orders of unusual size, frequency or pattern and hold off on shipping the drugs until those issues are resolved.”216 Yet, McKesson never reported Clawson to the DEA nor did they stop shipping to Clawson. 217 The DEA investigator who worked Clawson’s case says, “We … have a pharmacy in a small town out in Colorado, 200 miles from Denver that is getting the same number of pills or perhaps exceeding a pharmacy that is located next to a medical center in the city of Denver…. There was no legitimate reason for that pharmacy in that little town in remote Colorado to be getting hundreds of thousands of pills over a several-year period. None. There was no justifiable reason.”218 “Clawson ordered so much oxycodone that he repeatedly bumped up against thresholds McKesson had set for his pharmacy. The company raised those limits and sent him more …”219 One DEA investigator said that McKesson “would raise thresholds so pharmacies could order more pills without setting off suspicious monitoring alarms inside the company.”220 332. Clawson’s order volume should have set off numerous red flags. A grand jury, in indicting Clawson, found, “From 2008-2011, the percentage increase for oxycodone 30 mg orders supplied by McKesson to [Clawson] was approximately 1,469%.”221 333. Beyond Colorado, DEA “investigators found that McKesson warehouses in Livonia, Mich., and Washington Court House, Ohio, were supplying pharmacies that sold to 216 Id. Id. 218 Id. 219 Id. 220 Id. 221 Id. 217 91 criminal drug rings.”222 The DEA diversion office, helmed by Rannazzisi, demanded in 2014 that McKesson surrender its licenses to distribute drugs for five of its warehouses, which were implicated in supplying criminal drug rings.223 McKesson refused. 334. In September 2015, one month after Rannazzisi was removed as chief of the DEA’s diversion enforcement office, McKesson reached a settlement with the government that did not require it to surrender its warehouse licenses.224 McKesson agreed to pay a fine of $150 million, which fell far short of the $1 billion that the DEA had wanted to seek while headed by Rannazzisi.225 335. McKesson earns $200 billion per year in revenue, so a fine of only $150 million is relatively trivial for McKesson to pay.226 Schilling, the lead investigator for the DEA, says that McKesson received a level of special treatment that he’d never seen before in his 30-year career, and pointed out that “the $150 million fine was only about $50 million more than McKesson CEO, John Hammergren’s compensation last year.”227 New Hampshire senator, Maggie Hassan, says that if our country wants to end the opioid epidemic, “one of the things we have to do is begin to hold the pharmaceutical companies accountable for this. And right now, when you see a fine for the McKesson Company of $150 million when they make a $100 million a week in profits, that isn’t gonna do it.”228 222 Id. Id. 224 Id. 225 Id. 226 Id. 227 Bill Whitaker, Whistleblowers: DEA Attorneys Went Easy on McKesson, supra note 137. 228 Id. 223 92 E. Consequences of the Defendants’ Actions 336. As the Opioid Manufacturers successfully convinced more and more doctors and patients that opioids were safe and effective for chronic pain, the number of prescriptions for opioids in the United States rose dramatically. Figure: Opioid Prescriptions Dispensed by US Retail Pharmacies from 1991 to 2013 337. The concomitant rates of opioid abuse and addiction rose as well. Certain doctors and pharmacies sought to exploit this increasing demand for prescription opioids. The DEA and Plaintiff’s police force could not keep pace with the rising rates of drug trafficking and diversion of opioids from legitimate sources. Despite knowing about many suspicious orders, the Opioid Distributors did not report suspicious patterns of opioid orders to the DEA or Plaintiff’s police force, continuing to profit from these large volume buyers who were clearly diverting drugs to the black market. 338. As a result of the wide availability of prescription opioids, addiction rates skyrocketed. 93 1. Dramatic Rise in Opioid Addiction 339. A recent study found that between 2010 and 2016 alone, the rate of opioid addiction in the United States increased by 493%.229 Figure: Opioid addiction rate between 2010 and 2016 (per 1,000 people) 2. Overdose deaths 340. In 2011, a statement by the CDC noted that the death toll from overdoses of prescription opioids had more than tripled in the past decade. 341. Prescription opioids account for approximately 70% of fatal prescription drug overdoses.230 342. Ninety-one Americans die every day from an opioid overdose.231 229 Nadia Kounang, Opioid addiction rates continue to skyrocket, CNN (June 29, 2017), http://cnn.it/2sW83DJ. Centers for Disease Control and Prevention, National Center for Health Statistics. Multiple Cause of Death 19992013 on CDC WONDER Online Database, released 2015. 2015. Available at: http://wonder-cdc.gov/mcdicd10.html. 231 CDC, Opioid Overdose: Opioid Basics: Understanding the Epidemic, .https://www.cdc.gov/drugoverdose/epidemic/index.html. 230 94 Figure: Increase in monthly opioid deaths from 2000 to 2015 343. The N.Y. Times reports, “The current opioid epidemic is the deadliest drug crisis in American history. Overdoses, fueled by opioids, are the leading cause of death for Americans under 50 years old — killing roughly 64,000 people [per] year, more than guns or car accidents…”232 “If nothing is done, we can expect a lot of people to die: A forecast by STAT concluded that as many as 650,000 people will die over the next 10 years from opioid overdoses — more than the entire city of Baltimore. The US risks losing the equivalent of a whole American city in just one decade.”233 344. For every fatal opioid overdose, there are approximately 30 nonfatal overdoses.234 These nonfatal overdoses require prompt medical intervention by first responders and emergency treatment at hospitals. Typically, the initial treatment at the scene of the overdose is the 232 Maya Salam, The Opioid Epidemic: A Crisis Years in the Making, N.Y. TIMES (Oct. 26, 2017), http://nyti.ms/2zJXHr7. 233 German Lopez, The opioid epidemic, explained, VOX (Dec. 21, 2017), http://bit.ly/2wpP8jp. 234 Frazier W, et al., Medication-Assisted Treatment and Opioid Use Before and After Overdose in Pennsylvania Medicaid, JAMA (Aug. 22, 2017), 318(8):750-752. 95 administration of naloxone or Narcan, which blocks the effects of an opioid overdose, giving the first responders time to get the patient to a hospital. The rates of hospitalization due to opioid overdose have increased dramatically in the U.S. from 1993 to 2012, growing from 116.7 inpatient stays per 100,000 people to 295.6 inpatient stays per 100,000, an increase of 153%.235 345. Alarmingly, even after a nonfatal overdose, opioids continue to be prescribed. For example, a 2000-2012 study236 reported high rates of opioid prescribing for patients even after they had sustained a nonfatal opioid overdose. 3. Increased heroin addiction and overdose 346. Opioids are a gateway to heroin use. The CDC has identified addiction to prescription pain medication as the strongest risk factor for heroin addiction. People who are addicted to prescription opioid painkillers are forty times more likely to become addicted to heroin.237 347. The Pittsburgh Post-Gazette reports, “When Valerie Mack found her brother, Sammy, 50, dead on the floor of his bedroom, she knew that he likely wouldn’t have found his way to heroin if he hadn’t been injured months earlier in a motorcycle accident and been prescribed [opioid] painkillers.”238 The Post-Gazette notes, “The heroin problem wouldn’t be one-tenth as bad if we hadn’t primed the pump with prescription opioids.”239 348. Prescription opioids are pharmacologically similar to heroin, and people who get hooked on opioids often switch to the cheaper drug, heroin, as their addiction becomes harder to 235 Owens, P. L., M. L. Barrett, A. J. Weiss, et al. 2014. Hospital inpatient utilization related to opioid overuse among adults, 1993–2012 (Statistical Brief #177). http://www.hcup-us.ahrq.gov/reports/statbriefs/sb177Hospitalizations-for-Opioid-Overuse.pdf. 236 Larochelle MR, Liebschutz JM, Zhang F, et al., Opioid prescribing after nonfatal overdose and association with repeated overdose: a cohort study. Ann Intern. Med. (2016), 164(1):1-9. 237 See Ctrs. for Disease Control and Prevention, U.S. Dep’t of Health and Human Servs., Today’s Heroin Epidemic, https://www.cdc.gov/vitalsigns/heroin/index.html (last updated July 7, 2015). 238 Lord, supra note 130. 239 Id. 96 fund. “Research suggests that misuse of [prescription opioid] drugs may open the door to heroin use. Nearly 80 percent of Americans using heroin (including those in treatment) reported misusing prescription opioids first.”240 349. The number of heroin users in the United States increased by 145% from 2007 to 2014.241 Heroin overdoses in the U.S. quintupled from 2000 to 2014.242 4. Increased prevalence of needle-borne illnesses (HIV, Hepatitis) 350. People who abuse prescription opioids are 40 times more likely than the general population to use an injectable for either a synthetic opioid or heroin.243 351. On January 23, 2015, the Indiana Department of Health began investigating an outbreak of HIV in one of the state’s rural community.244 The investigation found that the majority of HIV cases were due to residents of the community sharing syringes when injecting the prescription opioid oxymorphone. 352. Needle-sharing can spread not only HIV, but also Hepatitis C. Data from the last 10 years reveals a nationwide increase in Hepatitis C infection among young adults.245 In May 2017, the CDC released data showing that new Hepatitis C infections have nearly tripled in the past 5 years, largely as a result of opioid-related injection drug use.246 “These new infections are most frequently among young people who transition from taking prescription pills to injecting heroin, which has become cheaper and more easily 240 National Institute of Drug Abuse, Heroin (July 2017), http://bit.ly/1NpA0Ij. Center for Behavioral Health Statistics and Quality. 2014 National Survey on Drug Use and Health: detailed tables. Rockville, MD: Substance Abuse and Mental Health Services Administration, 2015. 242 CDC, Wide-ranging Online Data for Epidemiologic Research (WONDER), Multiple-Cause-of-Death file, 2000– 2014. 2015, http://bit.ly/1Z1ZFdF. 243 Jones CM, Heroin use and heroin use risk behaviors among nonmedical users of prescription opioid pain relievers—United States, 2002–2004 and 2008–2010. Drug Alcohol Depend. (2013), 132:95–100, https://doi.org/10.1016/j.drugalcdep.2013.01.007. 244 Community Outbreak of HIV Infection Linked to Injection Drug Use of Oxymorphone — Indiana, 2015, CDC (May 1, 2015), https://www.cdc.gov/mmWr/preview/mmwrhtml/mm6416a4.htm. 245 Theresa Watts, MPH, et al., Increased Risk for Mother-to-Infant Transmission of Hepatitis C Virus Among Medicaid Recipients, Morbidity and Mortality Weekly Reports, CDC (Oct. 27, 2017), http://bit.ly/2lhn79Z. 246 https://www.cdc.gov/mmwr/volumes/66/wr/mm6618a1.htm?s_cid=mm6618a1_w. 241 97 available in some cases…[I]n turn many -- most, in some community -- people who inject drugs become infected with hepatitis C,” according to the CDC’s study lead author, Dr. John Ward.247 353. Hepatitis C commonly infects and replicates inside the liver. Up to 70% of people infected with Hepatitis C will develop chronic liver disease.248 5. Increase in asthma-related ER visits and deaths 354. Opioids depress the central nervous system, so large doses can substantially slow users’ breathing rates. Overdose deaths from opioids often result from the person becoming so sedated that they can no longer regulate their own breathing. 355. Because people with asthma already struggle to get enough oxygen, opioids can exacerbate asthma symptoms. In 2008, an estimated 572,877 adults in New Jersey suffer from asthma, which is 12.8% of the population.249 356. Opioid-addicted patients with asthma are 600% more likely to be admitted to an emergency room for respiratory problems than non-addicted asthma sufferers.250 In one study of inner-city patients admitted to an intensive care unit for asthma-related breathing problems, 56% of admissions appeared to be associated with opioid use.251 247 Id. CDC, Hepatitis C FAQs for Health Professionals, http://bit.ly/2prWZyr. 249 CDC’s National Asthma Control Program: Asthma in New Jersey, https://www.cdc.gov/asthma/stateprofiles/asthma_in_nj.pdf. 250 Id. 251 Krantz A.J., Hershow R.C., Pruchand N., et al: Heroin insufflation as a trigger for patients with life-threatening asthma. Chest 2003; 123: pp. 510-517 248 98 6. Addiction and death in children 357. Women who become pregnant while addicted to opioids find it difficult to stop taking the drug. Their babies are often born physically addicted to opioids. Every 25 minutes, an opioid addicted baby is born in America.252 358. While millions of opioid addicted adults around the nation avoid quitting cold- turkey because of the intense withdrawal effects, newborn babies are left without that option. They are forced to endure painful, debilitating and, at times, life-threatening opioid withdrawal symptoms. These symptoms are known as “neonatal abstinence syndrome,” which occurs in up to 94% of newborns whose mothers were addicted to or treated with opioids while pregnant.253,254 359. The pain infants experience from neonatal abstinence syndrome is intense. “It’s a panicked, high-pitched wail, almost desperate, a sound you don’t forget,” says Kimberly Nelson, a nurse in an intensive care unit, describing the cries of infants experiencing withdrawal.255 360. Infants with neonatal abstinence syndrome are at increased risk for admission to the neonatal intensive care unit,256 birth complications,257 the need for pharmacologic treatment,258 and a prolonged hospital stay.259 252 National institute of Drug Abuse. Dramatic Increases in Maternal Opioid Use and Neonatal Abstinence Syndrome, https://www.drugabuse.gov/related-topics/trends-statistics/infographics/dramatic-increases-in-maternalopioid-use-neonatal-abstinence-syndrome (last visited Feb. 21 2018). 253 Finnegan LP, Connaughton JF Jr, Kron RE, Emich JP, Neonatal abstinence syndrome: assessment and management, Addict. Dis. (1975), 2:141-158. 254 Hudak ML, Tan RC, Committee on Drugs, Committee on Fetus and Newborn, Neonatal drug withdrawal. Pediatrics (2012), 129:e540-60. 255 Duff Wilson and John Shiffman, Newborns die after being sent home with mothers struggling to kick drug addictions, REUTERS (Dec. 7, 2015), http://www.reuters.com/investigates/special-report/baby-opioids/. 256 Tolia VN, Patrick SW, Bennett MM, et al., Increasing incidence of the neonatal abstinence syndrome in U.S. neonatal ICUs, N. ENGL. J. MED. (2015), 372:2118-2126; Uebel H, Wright IM, Burns L, et al, Reasons for rehospitalization in children who had neonatal abstinence syndrome, Pediatrics (2015), 136:e811-20. Cleary BJ, Donnelly JM, Strawbridge JD, et al., Methadone and perinatal outcomes: a retrospective cohort study, AM. J. OBSTET. GYNECOL. (2011), 204:139.e1-139.e9. 99 361. Prolonged hospitalization results in the use of a greater portion of health care resources for the care of infants with the neonatal abstinence syndrome260 than for those without the syndrome. In 2012, a normal infant with no birth complications stayed in the hospital an average of 2.1 days, with a cost of $3,500, whereas an infant with neonatal abstinence syndrome had an average hospital stay of 16.9 days, with a cost of $66,700.261 Aggregate hospital charges for all infants with neonatal abstinence syndrome in 2012 were estimated to be $1.5 billion; approximately 80% was financed by Medicaid programs.262 7. Burden on local government 362. The societal costs of prescription drug abuse are “huge,”263 and state and local governments must often bear the brunt of this cost. In total, the economic burden of prescription opioid misuse is $78.5 billion per year, including lost productivity, increased healthcare costs, addiction treatment costs, and increased criminal justice expenditures.264 The aggregate societal cost of the associated heroin epidemic is $50 billion per year.265 257 Patrick SW, Davis MM, Lehmann CU, Lehman CU, Cooper WO, Increasing incidence and geographic distribution of neonatal abstinence syndrome: United States 2009 to 2012, J. Perinatol (2015), 35:650-655. 258 Tolia VN, Patrick SW, Bennett MM, et al., supra note 246; Jansson LM, Velez ML, Infants of drug-dependent mothers, Pediatr. Rev. (2011), 32:5-12. 259 Lee J, Hulman S, Musci M Jr, Stang E, Neonatal abstinence syndrome: influence of a combined inpatient/outpatient methadone treatment regimen on the average length of stay of a Medicaid NICU population, Popul. Health Manag. (2015), 18:392-397; Wachman EM, Newby PK, Vreeland J, et al., The relationship between maternal opioid agonists and psychiatric medications on length of hospitalization for neonatal abstinence syndrome, J. ADDICT. MED. (2011), 5:293-299. 260 Patrick SW, Schumacher RE, Benneyworth BD, Krans EE, McAllister JM, Davis MM, Neonatal abstinence syndrome and associated health care expenditures:, United States, 2000-2009, JAMA (2012), 307:1934-1940. 261 Patrick SW, Davis MM, Lehmann CU, Cooper WO, Increasing incidence and geographic distribution of neonatal abstinence syndrome: United States 2009 to 2012, J. Perinatol (2015), 35:650–5, https://doi.org/10.1038/jp.2015.36. 262 Id. 263 See Amicus Curiae Brief of Healthcare Distribution Management Association in Support of Appellant Cardinal Health, Inc., Cardinal Health, Inc. v. United States Dept. Justice, No. 12-5061 (D.C. Cir. May 9, 2012), 2012 WL 1637016, at *10 [hereinafter Brief of HDMA]. 264 Id. (citing at note 2 Florence CS, Zhou C, Luo F, Xu L, The Economic Burden of Prescription Opioid Overdose, Abuse, and Dependence in the United States, 2013, MED CARE (2016), 54(10):901-906, doi:10.1097/MLR.0000000000000625). 265 Brian Snyder, Heroin Addiction Costs Us More Than $50 Billion Per Year, NEWSWEEK (June 17, 2017), http://bit.ly/2tGo8eg. 100 363. “Counties grappling with rising overdoses face higher costs in emergency call volumes, medical examiner and coroner bills, and overcrowded jails and courtrooms, said Matt Chase, executive director of the National Association of Counties, which represents 3,069 county and local governments.”266 Localities also face rising costs for foster care, as about 75% of the children who are given up or taken by social services have opioid-addicted parents.267 Reuters reports that “the opioid crisis is blowing a hole in small-town America’s finances.”268 NO STATUTE OF LIMITATIONS BARS PLAINTIFFS’ CLAIMS A. Enforcement of Public Right 364. No statute of limitation can be pleaded against the Plaintiff, which seeks to enforce strictly public rights. B. Equitable Estoppel 365. To the extent any statute of limitations defense would apply, Defendants are equitably estopped from relying upon such a defense because they undertook efforts to purposefully conceal their unlawful conduct and fraudulently assure the public, including the State and the Plaintiff, that they were undertaking efforts to comply with their obligations under the state and federal controlled substances laws, all with the goal of protecting their registered manufacturer or distributor status in the State and to continue generating profits. Notwithstanding the allegations set forth above, the Defendants affirmatively assured the public, including the State, the Plaintiff, and Plaintiff’s community, that they were working to curb the opioid epidemic. 266 Paula Seligson and Tim Reid, Unbudgeted: How the opioid crisis is blowing a hole in small-town America's finances, REUTERS (Sept. 27, 2017), http://reut.rs/2wFo5Bm. 267 Id. 268 Id. 101 366. Alternatively, if a limitations period is deemed applicable, Plaintiff Hudson County would be subject a period no less than ten years per N.J.S.A. 2A: 14-1. 367. 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 as possible in constantly monitoring, identifying, and eliminating any outside criminal activity.” 368. 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.” 369. Moreover, in furtherance of their effort to affirmatively conceal their conduct and avoid detection, the Opioid Distributors, through their trade associations, HDMA and NACDS, filed an amicus brief in Masters Pharmaceuticals, which made the following statements:269 a. “HDMA and NACDS members not only have statutory and regulatory responsibilities to guard against diversion of controlled prescription drugs, but undertake such efforts as responsible members of society.” b. “DEA regulations that have been in place for more than 40 years require distributors to report suspicious orders of controlled substances to DEA based on information readily available to them (e.g., a pharmacy’s placement of unusually frequent or large orders).” c. “Distributors take seriously their duty to report suspicious orders, utilizing both computer algorithms and human review to detect suspicious orders based on the generalized information that is available to them in the ordering process.” d. “A particular order or series of orders can raise red flags because of its unusual size, frequency, or departure from typical patterns with a given pharmacy.” e. “Distributors also monitor for and report abnormal behavior by pharmacies placing orders, such as refusing to provide business contact information or insisting on paying in cash.” 269 Brief for HDMA and NACDS, supra note 257, 2016 WL 1321983, at *3-4, *25. 102 370. Through the above statements made on their behalf by their trade associations, and other similar statements assuring their continued compliance with their legal obligations, the Opioid Distributors not only acknowledged that they understood their obligations under the law, but they further affirmed that their conduct was in compliance with those obligations. 371. The Opioid Distributors have also concealed and prevented discovery of information, including data from the ARCOS database, that will confirm their identities and the extent of their wrongful and illegal activities. 372. The Opioid Manufacturers distorted the meaning or import of studies they cited and offered them as evidence for propositions the studies did not support. The Opioid Manufacturers invented “pseudoaddiction” and promoted it to an unsuspecting medical community. Opioid Manufacturers provided the medical community with false and misleading information about ineffectual strategies to avoid or control opioid addiction. Opioid Manufacturers recommended to the medical community that dosages be increased, without disclosing the risks. Opioid Manufacturers spent millions of dollars over a period of years on a misinformation campaign aimed at highlighting opioids’ alleged benefits, disguising the risks, and promoting sales. The medical community, consumers, the State and Plaintiff were duped by the Opioid Manufacturers’ campaign to misrepresent and conceal the truth about the opioid drugs that they were aggressively pushing in the State and in Plaintiff’s community. 373. Defendants intended that their actions and omissions would be relied upon, including by Plaintiff. Plaintiff did not know, and did not have the means to know, the truth due to Defendants’ actions and omissions. 374. The Plaintiff reasonably relied on Defendants’ affirmative statements regarding their purported compliance with their obligations under the law and consent orders. 103 C. Fraudulent Concealment 375. The Plaintiff’s claims are further subject to equitable tolling, stemming from Defendants’ knowingly and fraudulently concealing the facts alleged herein. As alleged herein, Defendants knew of the wrongful acts set forth above, and had material information pertinent to their discovery, and concealed them from the Plaintiff, and Plaintiff’s community. The Plaintiff did not know, or could not have known through the exercise of reasonable diligence, of its causes of action, as a result of Defendants’ conduct. 376. The purposes of the statutes of limitations period are satisfied because Defendants cannot claim prejudice due to a late filing where the Plaintiff filed suit promptly upon discovering the facts essential to their claims, described herein, which Defendants knowingly concealed. 377. In light of their statements to the media, in legal filings, and settlements, it is clear that Defendants had actual or constructive knowledge that their conduct was deceptive, in that they consciously concealed the schemes set forth herein. 378. Defendants continually and secretly engaged in their scheme to avoid compliance with their legal obligations. Only Defendants and their agents knew or could have known about Defendants’ unlawful actions because Defendants made deliberate efforts to conceal their conduct. As a result of the above, the Plaintiff was unable to obtain vital information bearing on its claims absent any fault or lack of diligence on its part. 1. The Opioid Distributors Have Misrepresented their Compliance with their Legal Duties 379. The Opioid Distributors have repeatedly misrepresented their compliance with their legal duties under federal and State law and have wrongfully and repeatedly disavowed 104 those duties in an effort to mislead regulators and the public regarding the Opioid Distributors’ compliance with their legal duties. 380. Opioid Distributors have refused to recognize any duty beyond reporting suspicious orders. In Masters Pharmaceuticals, the HDMA, a trade association run the Opioid Distributors, and the NACDS submitted amicus briefs regarding the legal duty of wholesale distributors. Inaccurately denying the legal duties that the wholesale drug industry has been tragically recalcitrant in performing, they argued as follows:  The Associations complained that the “DEA has required distributors not only to report suspicious orders, but to investigate orders (e.g., by interrogating pharmacies and physicians) and take action to halt suspicious orders before they are filled.”270  The Associations argued that, “DEA now appears to have changed its position to require that distributors not only report suspicious orders, but investigate and halt suspicious orders. Such a change in agency position must be accompanied by an acknowledgment of the change and a reasoned explanation for it. In other words, an agency must display awareness that it is changing position and show that there are good reasons for the new policy. This is especially important here, because imposing intrusive obligation on distributors threatens to disrupt patient access to needed prescription medications.”271  The Associations alleged (inaccurately) that nothing “requires distributors to investigate the legitimacy of orders, or to halt shipment of any orders deemed to be suspicious.”272  The Association complained that the purported “practical infeasibility of requiring distributors to investigate and halt suspicious orders (as well as report them) underscores the importance of ensuring that DEA has complied with the APA before attempting to impose such duties.”273  The Associations alleged (inaccurately) that “DEA’s regulations [] sensibly impose[] a duty on distributors simply to report suspicious orders, but left it to DEA and its agents to investigate and halt suspicious orders.”274 270 Brief for HDMA and NACDS, supra note 257, 2016 WL 1321983, at *4–5. Id. at *8 (citations and quotation marks omitted). 272 Id. at *14. 273 Id. at *22. 274 Id. at *24–25. 271 105  Also inaccurately, the Associations argued that, “[i]mposing a duty on distributors – which lack the patient information and the necessary medical expertise – to investigate and halt orders may force distributors to take a shot-inthe-dark approach to complying with DEA’s demands.”275 381. The position taken by the trade groups is emblematic of the position taken by the Opioid Distributors in a futile attempt to deny their legal obligations to prevent diversion of the dangerous drugs.276 382. The Court of Appeals for the District of Columbia recently issued its opinion affirming that a wholesale drug distributor does, in fact, have duties beyond reporting. 277 The D.C. Circuit Court upheld the revocation of Master Pharmaceutical’s license and determined that DEA regulations require that in addition to reporting suspicious orders, distributors must “decline to ship the order, or conduct some ‘due diligence’ and—if it is able to determine that the order is not likely to be diverted into illegal channels—ship the order.”278 Master Pharmaceutical was in violation of legal requirements because it failed to conduct necessary investigations and filled suspicious orders.279 A distributor’s investigation must dispel all the red flags giving rise to suspicious circumstance prior to shipping a suspicious order. Id. at 226. The Circuit Court also rejected the argument made by the HDMA and NACDS (quoted above), that, allegedly, the DEA had created or imposed new duties. Id. at 220. 383. Wholesale Distributor McKesson has recently been forced to specifically admit to breach of its duties to monitor, report, and prevent suspicious orders. Pursuant to an Administrative Memorandum of Agreement (“2017 Agreement”) entered into between 275 Id. at 26. See id. at *3 (arguing the wholesale distributor industry “does not know the rules of the road because” they claim (inaccurately) that the “DEA has not adequately explained them”). 277 Masters Pharm., Inc. v. Drug Enf’t Admin., 861 F.3d 206 (D.C. Cir. 2017). 278 Id. at 212. 279 Id. at 218–19, 226. 276 106 McKesson and the DEA in January 2017, McKesson admitted that, at various times during the period from January 1, 2009 through the effective date of the Agreement (January 17, 2017) it “did not identify or report to [the] DEA certain orders placed by certain pharmacies which should have been detected by McKesson as suspicious based on the guidance contained in the DEA Letters.”280 384. Further, the 2017 Agreement specifically finds that McKesson “distributed controlled substances to pharmacies even though those McKesson Distribution Centers should have known that the pharmacists practicing within those pharmacies had failed to fulfill their corresponding responsibility to ensure that controlled substances were dispensed pursuant to prescriptions issued for legitimate medical purposes by practitioners acting in the usual course of their professional practice, as required by 21 C.F.R § 1306.04(a).”281 McKesson admitted that, during this time period, it “failed to maintain effective controls against diversion of particular controlled substances into other than legitimate medical, scientific and industrial channels by sales to certain of its customers in violation of the CSA and the CSA’s implementing regulations, 21 C.F.R. Part 1300 et seq., at the McKesson Distribution Centers” including the McKesson Distribution Center located in “Washington Courthouse, Ohio.”282 Due to these violations, McKesson agreed that its authority to distribute controlled substances from the Washington Courthouse, Ohio facility (among other facilities) would be partially suspended.283 385. The 2017 Memorandum of Agreement followed a 2008 Settlement Agreement in which McKesson also admitted failure to report suspicious orders of controlled substances to the 280 See Administrative Memorandum of Agreement between the U.S. Dep’t of Justice, the Drug Enf’t Admin., and the McKesson Corp. (Jan. 17, 2017), https://www.justice.gov/opa/press-release/file/928476/download. 281 Id. at 4. 282 Id. 283 Id. at 6. 107 DEA.284 In the 2008 Settlement Agreement, McKesson “recognized that it had a duty to monitor its sales of all controlled substances and report suspicious orders to DEA,” but had failed to do so.285 The 2017 Memorandum of Agreement documents that McKesson continued to breach its admitted duties by “fail[ing] to properly monitor its sales of controlled substances and/or report suspicious orders to DEA, in accordance with McKesson’s obligations.”286 As a result of these violations, McKesson was fined and required to pay to the United States $150,000,000.287 386. Even though McKesson had been sanctioned in 2008 for failure to comply with its legal obligations regarding controlling diversion and reporting suspicious orders, and even though McKesson had specifically agreed in 2008 that it would no longer violate those obligations, McKesson continued to violate the laws in contrast to its written agreement not to do so. 387. Because of the Opioid Distributors’ refusal to abide by their legal obligations, the DEA has repeatedly taken administrative action to attempt to force compliance. For example, in May 2014, the United States Department of Justice, Office of the Inspector General, Evaluation and Inspections Divisions, reported that the DEA issued final decisions in 178 registrant actions between 2008 and 2012.288 The Office of Administrative Law Judges issued a recommended decision in a total of 117 registrant actions before the DEA issued its final decision, including 76 284 Id. at 4. Id. 286 Id.; see also Settlement Agreement and Release between the U.S. and McKesson Corp., at 5 (Jan. 17, 2017) [hereinafter 2017 Settlement Agreement and Release] (“McKesson acknowledges that, at various times during the Covered Time Period [2009-2017], it did not identify or report to DEA certain orders placed by certain pharmacies, which should have been detected by McKesson as suspicious, in a manner fully consistent with the requirements set forth in the 2008 MOA.”), https://www.justice.gov/opa/press-release/file/928471/download. 287 See 2017 Settlement Agreement and Release, at 6. 288 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 (2014), https://oig.justice.gov/reports/2014/e1403.pdf. 285 108 actions involving orders to show cause and 41 actions involving immediate suspension orders.289 These actions include the following: 289  On April 24, 2007, the DEA issued an Order to Show Cause and Immediate Suspension Order against the AmerisourceBergen Orlando, Florida distribution center (“Orlando Facility”) alleging failure to maintain effective controls against diversion of controlled substances. On June 22, 2007, AmerisourceBergen entered into a settlement that resulted in the suspension of its DEA registration;  On November 28, 2007, the DEA issued an Order to Show Cause and Immediate Suspension Order against the Cardinal Health Auburn, Washington Distribution Center (“Auburn Facility”) for failure to maintain effective controls against diversion of hydrocodone;  On December 5, 2007, the DEA issued an Order to Show Cause and Immediate Suspension Order against the Cardinal Health Lakeland, Florida Distribution Center (“Lakeland Facility”) for failure to maintain effective controls against diversion of hydrocodone;  On December 7, 2007, the DEA issued an Order to Show Cause and Immediate Suspension Order against the Cardinal Health Swedesboro, New Jersey Distribution Center (“Swedesboro Facility”) for failure to maintain effective controls against diversion of hydrocodone;  On January 30, 2008, the DEA issued an Order to Show Cause and Immediate Suspension Order against the Cardinal Health Stafford, Texas Distribution Center (“Stafford Facility”) for failure to maintain effective controls against diversion of hydrocodone;  On May 2, 2008, McKesson Corporation entered into an Administrative Memorandum of Agreement (“2008 MOA”) with the DEA which provided that McKesson would “maintain a compliance program designed to detect and prevent the diversion of controlled substances, inform DEA of suspicious orders required by 21 C.F.R. § 1301.74(b), and follow the procedures established by its Controlled Substance Monitoring Program”;  On September 30, 2008, Cardinal Health entered into a Settlement and Release Agreement and Administrative Memorandum of Agreement with the DEA related to its Auburn Facility, Lakeland Facility, Swedesboro Facility and Stafford Facility. The document also referenced allegations by the DEA that Cardinal failed to maintain effective controls against the diversion of controlled substances at its distribution facilities located in McDonough, Georgia Id. 109 (“McDonough Facility”), Valencia, California (“Valencia Facility”) and Denver, Colorado (“Denver Facility”);  On February 2, 2012, the DEA issued an Order to Show Cause and Immediate Suspension Order against the Cardinal Health Lakeland, Florida Distribution Center (“Lakeland Facility”) for failure to maintain effective controls against diversion of oxycodone;  On December 23, 2016, Cardinal Health agreed to pay a $44 million fine to the DEA to resolve the civil penalty portion of the administrative action taken against its Lakeland, Florida Distribution Center; and  On January 5, 2017, McKesson Corporation entered into an Administrative Memorandum Agreement with the DEA wherein it agreed to pay a $150 million civil penalty for violation of the 2008 MOA as well as failure to identify and report suspicious orders at its facilities in Aurora CO, Aurora IL, Delran NJ, LaCrosse WI, Lakeland FL, Landover MD, La Vista NE, Livonia MI, Methuen MA, Sante Fe Springs CA, Washington Courthouse OH and West Sacramento CA. 388. Rather than abide by their non-delegable duties under public safety laws, the Opioid Distributors, individually and collectively through trade groups in the industry, pressured the U.S. Department of Justice to “halt” prosecutions and lobbied Congress to strip the DEA of its ability to immediately suspend distributor registrations. The result was a “sharp drop in enforcement actions” and the passage of the “Ensuring Patient Access and Effective Drug Enforcement Act” which, ironically, raised the burden for the DEA to revoke a distributor’s license from “imminent harm” to “immediate harm” and provided the industry the right to “cure” any violations of law before a suspension order can be issued.290 290 See Bernstein, Investigation: The DEA slowed enforcement while the opioid epidemic grew out of control, supra note 166; Lenny Bernstein & Scott Higham, Investigation: U.S. Senator Calls for Investigation of DEA Enforcement Slowdown Amid Opioid Crisis, WASH. POST, Mar. 6, 2017, https://www.washingtonpost.com/investigations/ussenator-calls-for-investigation- of-dea-enforcement-slowdown/2017/03/06/5846ee60-028b-11e7-b1e9a05d3c21f7cf_story.html; Eric Eyre, DEA Agent: “We Had No Leadership” in WV Amid Flood of Pain Pills, CHARLESTON GAZETTE-MAIL, Feb. 18, 2017, http://www.wvgazettemail.com/news/20170218/dea-agent-we-had-noleadership- in-wv-amid-flood-of-pain-pills-. 110 389. In addition to taking actions to limit regulatory prosecutions and suspensions, the Opioid Distributors undertook to fraudulently convince the public that they were complying with their legal obligations, including those imposed by licensing regulations. Through such statements, the Opioid Distributors attempted to assure the public they were working to curb the opioid epidemic. 390. For example, a Cardinal Health executive claimed that it uses “advanced analytics” to monitor its supply chain, and represented that it was being “as effective and efficient as possible in constantly monitoring, identifying, and eliminating any outside criminal activity.”291 Given the sales volumes and the company’s history of violations, this executive was either not telling the truth, or, if Cardinal Health had such a system, it ignored the results. 391. Similarly, Defendant 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.”292 Again, given McKesson’s historical conduct, this statement is either false, or the company ignored outputs of the monitoring program. 392. By misleading the public about the effectiveness of their controlled substance monitoring programs, the Opioid Distributors successfully concealed the facts sufficient to arouse suspicion of the claims that the Plaintiff now asserts. The Plaintiff did not know of the existence or scope of Defendants’ industry-wide fraud and could not have acquired such knowledge earlier through the exercise of reasonable diligence. 291 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, https://www.washingtonpost.com/investigations/how-drugsintended-for- patients-ended-up-in-the-hands-of-illegal-users-no-one-was-doing-their- job/2016/10/22/10e7939630a7-11e6-8ff7-7b6c1998b7a0_story.html. 292 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, https://www.washingtonpost.com/investigations/key-officials-switch-sidesfrom- dea-to-pharmaceutical-industry/2016/12/22/55d2e938-c07b-11e6-b527- 949c5893595e_story.html. 111 393. Meanwhile, the opioid epidemic rages unabated in the Nation, the State, State, and in Plaintiff’s community. 394. The epidemic still rages because the fines and suspensions imposed by the DEA do not change the conduct of the industry. The distributors, including the Opioid Distributors, pay fines as a cost of doing business in an industry that generates billions of dollars in annual revenue. They hold multiple DEA registration numbers and when one facility is suspended, they simply ship from another facility. 395. The wrongful actions and omissions of the Opioid Distributors which have caused the diversion of opioids and which have been a substantial contributing factor to and/or proximate cause of the opioid crisis are alleged in greater detail in Plaintiff’s racketeering allegations below. 396. The Opioid Distributors have abandoned their duties imposed under Federal and State law, taken advantage of a lack of DEA law enforcement, and abused the privilege of distributing controlled substances in the State and Plaintiff’s community. 2. The Opioid Manufacturers Fraudulently Concealed Their Misconduct 397. The Opioid Manufacturers, both individually and collectively, made, promoted, and profited from their misrepresentations about the risks and benefits of opioids for chronic pain even though they knew that their misrepresentations were false and deceptive. The history of opioids, as well as research and clinical experience establish that opioids are highly addictive and are responsible for a long list of very serious adverse outcomes. The FDA warned the Opioid Manufacturers of this, and the Opioid Manufacturers had access to scientific studies, detailed prescription data, and reports of adverse events, including reports of addiction, hospitalization, and death – all of which clearly described the harm from long-term opioid use and that patients were suffering from addiction, overdose, and death in alarming numbers. More recently, the 112 FDA and CDC have issued pronouncements, based on medical evidence, that conclusively expose the falsity of Opioid Manufacturers’ misrepresentations, and Endo and Purdue have recently entered agreements in New York prohibiting them from making some of the same misrepresentations described in this Complaint. 398. At all times relevant to this Complaint, the Opioid Manufacturers took steps to avoid detection of and to fraudulently conceal their deceptive marketing and unlawful, unfair, and fraudulent conduct. For example, the Opioid Manufacturers disguised their role in the deceptive marketing of chronic opioid therapy by funding and working through third parties like Front Groups and key opinion leaders. The Opioid Manufacturers purposefully hid behind the assumed credibility of these individuals and organizations and relied on them to vouch for the accuracy and integrity of the Opioid Manufacturers’ false and deceptive statements about the risks and benefits of long-term opioid use for chronic pain. The Opioid Manufacturers also never disclosed their role in shaping, editing, and approving the content of information and materials disseminated by these third parties. The Opioid Manufacturers exerted considerable influence on these promotional and “educational” materials in emails, correspondence, and meetings with key opinion leaders, Front Groups, and public relations companies that were not, and have not yet become, public. For example, PainKnowledge.org, which is run by the National Initiative on Pain Control, did not disclose Endo’s involvement. Other Opioid Manufacturers, such as Purdue and Janssen, ran similar websites that masked their own role. 399. Finally, the Opioid Manufacturers manipulated their promotional materials and the scientific literature to make it appear that these documents were accurate, truthful, and supported by objective evidence when they were not. The Opioid Manufacturers distorted the meaning or import of studies they cited and offered them as evidence for propositions the studies 113 did not support. The Opioid Manufacturers invented “pseudoaddiction” and promoted it to an unsuspecting medical community. The Opioid Manufacturers provided the medical community with false and misleading information about ineffectual strategies to avoid or control opioid addiction. The Opioid Manufacturers recommended to the medical community that dosages be increased, without disclosing the risks. The Opioid Manufacturers spent millions of dollars over a period of years on a misinformation campaign aimed at highlighting opioids’ alleged benefits, disguising the risks, and promoting sales. The lack of support for the Opioid Manufacturers’ deceptive messages was not apparent to medical professionals who relied upon them in making treatment decisions, nor could it have been detected by the Plaintiff or Plaintiff’s community. Thus, the Opioid Manufacturers successfully concealed from the medical community, patients, and health care payors facts sufficient to arouse suspicion of the claims that the Plaintiff now asserts. Plaintiff did not know of the existence or scope of the Opioid Manufacturers’ industrywide fraud and could not have acquired such knowledge earlier through the exercise of reasonable diligence. C. Municipal Statute of Limitations 400. To the extent any statute of limitations defense would apply, a State or municipal entity shall have ten years after the cause of action shall have accrued to commence any civil action. N.J.S.A. § 2A:14-1.2. 401. Plaintiff is a State within the meaning of the statute. “The term ‘State’ means the State, its political subdivisions, any office, department, division, bureau, board, commission or agency of the State or one of its political subdivisions, and any public authority or public agency, including, but not limited to, the New Jersey Transit Corporation.” N.J.S.A. § 2A:14-1.2. 114 LEGAL CAUSES OF ACTION COUNT I PUBLIC NUISANCE (Against all Defendants) 402. Plaintiff incorporates by reference all other paragraphs of this complaint as if fully set forth here. 403. Defendants’ conduct has caused unreasonable and substantial interference with public health and comfortable enjoyment of life and property, such as by increasing opioid overdoses, serious injuries, death, addiction, HIV and Hepatitis C infections, public healthcare costs, severe disruption of public peace, law enforcement and jail costs, and the cost of childcare for wards of the State. Plaintiff is injured by paying these costs. Defendants’ conduct is continuous and endlessly producing damage. 404. Defendants’ conduct was a substantial factor in causing Plaintiff to pay these costs. The Opioid Manufacturers engaged in a decades-long misinformation campaign to convince the public and doctors that opioids were safe and effective for long-term pain, when in reality, opioids are extremely addictive and are ineffective in the long-term as patients build a tolerance. The Opioid Distributors covered up the sale of prescription opioids to suspicious buyers, rather than report these sales to authorities and stop shipment. Both the Opioid Manufacturers’ and Distributors’ conduct was a substantial factor in causing the opioid epidemic. 405. By causing dangerously addictive drugs to flood Plaintiff’s community, the Defendants have injuriously affected rights common to the general public, such as the rights of the people to public health, public safety, public peace, public comfort, and public convenience. The public nuisance caused by Defendants’ conduct has caused substantial annoyance, inconvenience, and injury to the public. 115 406. Defendants have committed a continuing course of conduct that injuriously affects the safety, health, and morals of the people of the Plaintiff’s community. 407. The presence of diverted prescription opioids in Plaintiff’s community, and the consequence of prescription opioids having been diverted in Plaintiff’s community, is the direct and proximate result of the Defendants’ failure to report suspicious orders to law enforcement and failure to stop shipment on orders that are suspicious or potentially suspicious. 408. Stemming the flow of illegally distributed prescription opioids, and abating the nuisance caused by the illegal flow of opioids, will help to alleviate this problem, save lives, prevent injuries and make Plaintiff’s community a safer place to live. 409. Plaintiff seeks an injunction and to recover the cost of abating the nuisance. COUNT II NEW JERSEY RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT (Against All Defendants) 410. Plaintiff incorporates by reference all other paragraphs of this complaint as if fully set forth herein. 411. Defendants are persons, within the meaning of RICO, because they hold a legal or beneficial interest in property (e.g., prescription drugs). 412. Defendants violated NJ RICO, 2C:41-2(c),293 by conducting or participating in the affairs of an enterprise that derived income from a pattern of racketeering activity, or by conspiring to do the same. 293 (edit) the plaintiff must demonstrate (1) the existence of an enterprise, (2) that the enterprise engaged in or its activities affected trade or commerce, (3) that defendant was employed by, or associated with the enterprise, (4) that he participated in the conduct of the affairs of the enterprise, and (5) that he participated through a pattern of racketeering activity. State v. Ball, 141 N.J. 142, 181-187, 661 A.2d 251, 270-274 (N.J. 1995) New Jersey RICO defines “racketeering activity” as including, among other things, bribery, extortion, forgery and fraudulent practices, securities fraud, and all crimes set forth in chapter 21 of Title 2C of the New Jersey Statutes. See N.J.S.A. § 2C:41- 116 A. The Opioid Misinformation Enterprise 413. The Opioid Manufacturers, and their key opinion leaders and Front Groups, were part of an associated-in-fact enterprise within the meaning of because they had a common purpose of, through unlawful means, engaging in a misinformation campaign to expand the market for opioids. There was a relationship between the Opioid Manufacturers as common sponsors of key opinion leaders, such as Dr. Russell Portenoy and Dr. Lynn Webster, and common members of and contributors to influential Front Groups, such as American Pain Foundation and American Academy of Pain Medicine. The duration of the enterprise spanned years, from the 1990s until the present time, providing more than sufficient time to pursue the enterprise’s goals. 414. Despite their association as part of an enterprise, the Opioid Manufacturers and their captured key opinion leaders and Front Groups are distinct entities with different organizational structures. 415. The enterprise engaged in interstate commerce by transacting business and marketing across state lines. 416. The Opioid Manufacturers participated in the conduct of the enterprise by knowingly implementing the enterprise’s agenda of spreading misinformation about whether opioids should be used to treat long-term pain. 417. The Opioid Manufacturers knowingly participated in a scheme to obtain money or property through use of false or fraudulent pretenses. The scheme sought to convince doctors and patients that opioids were safe and effective for long-term pain, relatively non-addictive, and should be liberally prescribed for all types of pain. Through their common sponsorship and 1(a). A person who proves a claim under section 2C:41-2 of New Jersey RICO is entitled to recover threefold the damages sustained by him, and reasonable attorneys’ fees. N.J.S.A. § 2C:41-4(c). 117 funding of key opinion leaders and Front Groups, the Opioid Manufacturers sought to spread the false messages that: opioids were safe and effective for treating chronic pain; opioids posed only a small (less than 1%) risk of addiction; drug-seeking behavior was actually a sign of undertreated pain, not of a substance abuse problem (i.e., the concept of pseudoaddiction); and screening tools could accurately predict who was high or low risk for addiction, allowing doctors to prescribe opioids to low risk patients without fear. 418. In reality, as the medical community had long known and understood prior to the Opioid Manufacturers’ misinformation campaign, prescription opioids are a highly addictive form of synthetic heroin that is not effective for treating chronic pain, as patients develop a tolerance over time, necessitating that patients take larger and larger doses to get the same effect. As the CDC has stated, the larger the dose, the higher the risk of addiction. The widely cited study purporting to show that only 1% of long-term opioid patients become addicted was a complete fiction. The “study” was nothing more than a short letter to the editor discussing addiction to morphine and other opioids administered in an in-patient setting, such as after surgery. Use longer than the duration of the patient’s hospital stay was not studied. Nevertheless, Dr. Russell Portenoy, as part of the opioid-misinformation enterprise, used the enterprise’s funds to turn this 1% statistic into accepted medical gospel. Dr. Lynn Webster likewise, as part of the enterprise, used funds from the enterprise to popularize the concept of pseudoaddiction, instructing doctors that patients with drug seeking behavior were actually in need of more opioids, not less. In reality, pill-seeking behavior was just a classic sign of addiction. And screening tools are not an effective way to ensure that patients do not become addicted to opioids. Rather, one of the best ways to prevent addiction is to prescribe opioids carefully, only as a last resort, in limited circumstances, and for as short a duration as possible. With a 3-day 118 supply of opioids, only 10% of patients are likely to become long-term users.294 With a 10-day supply, the number doubles: 20% will become long-term users.295 “The longer you use opioids, the greater the risks—and the risks rise fast.”296 419. The above representations were material because they were capable of influencing a doctor of ordinary intelligence to prescribe opioids more freely to patients with chronic pain. Many doctors and health authorities rely on the manufacturers’ guidelines for the medications in deciding how to prescribe them. And, many doctors rely on information they receive from other doctors, such as key opinion leaders, to inform how they prescribe. Patients relied on their doctors’ advice, as well as the representations conveyed to them by the drug makers. 420. The Opioid Manufacturers intended to deceive doctors and patients about the safety and efficacy of opioids in order to substantially expand the market for opioids, opening up more profit potential for the Opioid Manufacturers’ drugs. 421. In furtherance of the enterprise’s agenda, the Opioid Manufacturers engaged in two or more predicate acts of mail and/or wire fraud. 422. The Opioid Manufacturers used the mail and/or interstate wire communications to deliver the enterprise’s false and misleading representations. Sections B and C of the complaint contain numerous specific examples of misleading videos, audio, pamphlets, guidelines, or other material that the Opioid Manufacturers conveyed to doctors and their patients using the U.S. mail or public internet (i.e. interstate wires) in furtherance of the general scheme. For example, the American Pain Foundation, an Opioid Manufacturer front group, engaged in a significant multimedia campaign – through radio, television and the internet – to educate patients about their 294 Beth Mole, With a 10-day supply of opioids, 1 in 5 become long-term users, ARSTECHNICA (Mar. 18, 2017), http://bit.ly/2nDlCmL. 295 Id. 296 Id. 119 “right” to pain treatment, namely opioids. And Dr. Portenoy’s infamous consensus paper, which said opioids were safe to prescribe for chronic pain, with an addiction rate below 1%, was distributed through American Academy of Pain Medicine’s website until 2011. 423. There is a pattern of two or more predicate acts because the acts were related and continuous. All mail and wire fraud were related to the same scheme to spread misinformation about opioids in order to convince doctors and patients to widely prescribe and use opioids for chronic pain. The acts occurred continuously from the launch of the Opioid Manufacturers branded opioid drugs in or around the 1990s until the present time. 424. The Opioid Manufacturers’ behavior poses a threat of continued racketeering activity, as they have not ceased making false and misleading representations concerning opioids and have tried to discount their role in creating the opioid crisis. 425. Plaintiff is a “person,” within the meaning of RICO, and has been injured in its business or property by: paying directly for costs associated with the opioid crisis, such as hospital admissions and other medical costs, police, firefighters, and emergency medical technician calls, as well as the loss in productivity of Plaintiff’s residents due to substance abuse, addiction, and death. 426. Plaintiff’s injuries and financial damages were proximately caused by the conduct constituting the RICO violation because such conduct caused the opioid epidemic. 427. Plaintiff seeks three times actual damages, injunctive relief, costs, and attorneys’ fees, pursuant to N.J.S.A. § 2C:41-4(c) B. 428. The Opioid Diversion Enterprise The Opioid Distributors were part of an associated-in-fact enterprise within the meaning of RICO because they had a common purpose of, through unlawful means, engaging in a subversion campaign to ensure that the DEA would not be able to close down their opioid 120 distribution warehouses that were unlawfully supplying problem prescribers and pharmacies with millions of dollars in opioids that would be diverted into the illegal market. There was a relationship between the Opioid Distributors not only through their business ties, but also through their joint lobbying efforts to hamper or hamstring the DEA. The duration of the enterprise spanned years, from the 1990s until the present time, providing more than sufficient time to pursue the enterprise’s goals. 429. Alternatively, the Opioid Distributors were members of a legal entity enterprise, through which the Defendants conducted their pattern of racketeering activity in this jurisdiction and throughout the United States. Specifically, the Healthcare Distribution Alliance is a distinct legal entity that satisfies the definition of a RICO enterprise. The Healthcare Distribution Alliance is a non-profit corporation formed under the laws of the District of Columbia. As a nonprofit corporation, Healthcare Distribution Alliance qualifies as an “enterprise” within the definition set out in N.J.S.A. 2C:41-2297 because it is a corporation and a legal entity. The Opioid Distributors are members of Healthcare Distribution Alliance; each Opioid Distributor has one of its executives on Healthcare Distribution Alliance’s board of directors; and each Opioid Distributor acted through Healthcare Distribution Alliance. 430. Despite their association as part of an enterprise, the Opioid Distributors and their lobbying organizations, such as Healthcare Distribution Alliance, are distinct entities with different organizational structures. 431. The enterprise engaged in interstate commerce by transacting business and marketing across state lines. 297 Edit - is identical in all material respects except that the New Jersey Act is directed toward enterprises engaged in or the activities of which affect ‘trade or commerce,’ not interstate or foreign commerce.” Kievit v. Rokeach, 121 432. The Opioid Distributors participated in the conduct of the enterprise by knowingly implementing the enterprise’s agenda. 433. The Opioid Distributors knowingly participated in a scheme to obtain money or property through use of false or fraudulent pretenses. The scheme sought to misrepresent the Opioid Distributors’ compliance with their duties to report and stop suspicious orders and to hamstring the DEA’s investigation of and ability to investigate the Opioid Distributors’ compliance with their legal obligations, so that the Opioid Distributors could continue to profit from the diversion of opioids that they knew, or should have known, were ending up in the illegal market. 434. In reality, the Opioid Distributors were not complying with their legal obligations and had no intention to do so. The Opioid Distributors willfully ignored blatant red flags that certain pharmacies were diverting the Opioid Distributors’ drugs into the illegal market. For example, “On Oct. 5, 2010, when Cardinal investigator Vincent Moellering visited Gulf Coast Medical Pharmacy, a drugstore in Fort Myers, Fla., he found evidence of diversion everywhere, records show, including suspicious customers who came in groups to fill their prescriptions. The pharmacy’s owner told Moellering that he could sell even more narcotics if Cardinal would supply them, according to Moellering’s report … Moellering labeled the drugstore ‘high risk’ and wrote: ‘I am not convinced that the owner is being forthright pertaining to his customers’ origin or residence. I have requested permission to contact DEA to resolve this issue.’ But Cardinal didn’t notify the agency or cut off Gulf Coast’s drug supply, the DEA contends. Instead, the shipments kept going out.”298 298 Bernstein, How drugs intended for patients ended up in the hands of illegal users, supra note 174. 122 435. The above representations were material because the DEA and other government officials relied on them in not revoking the Opioid Manufacturers’ registration permitting them to distribute prescription opioids throughout the United States. McKesson, for example, avoided revocation of five of its warehouses’ registrations by representing, along with other distributors, that it was doing the best that it could in terms of compliance. 436. The Opioid Distributors intended to mislead government officials about their compliance programs so that they could continue to profit immensely from the diversion of their opioid drugs into the unlawful marketplace. 437. In furtherance of the enterprise’s agenda, the Opioid Distributors engaged in two or more predicate acts of mail and/or wire fraud. 438. The Opioid Distributors used the mail and/or interstate wire communications to deliver the enterprise’s false and misleading representations to government officials and the public. For example, two lobbyists for Cardinal Health, “former deputy attorneys general, Jamie S. Gorelick, who served in the Clinton administration, and Craig S. Morford, who served in the George W. Bush administration” used interstate telephone wires to separately contact the DEA, telephone records show, says the Washington Post.299 The lobbyists’ goal was to impede or stop Rannazzisi’s Distributor Initiative that was attempting to enforce distributors’ obligations to report and stop suspicious shipments of opioids.300 439. There is a pattern of two or more predicate acts because the acts were related and continuous. All mail and wire fraud were in furtherance of the same scheme to misrepresent their 299 Bernstein, Investigation: The DEA slowed enforcement while the opioid epidemic grew out of control, supra note 166. 300 Id. 123 ability to comply with their federal obligations to report and stop suspicious orders of opioids. The acts occurred continuously from in or around the 1990s until the present time. 440. The Opioid Distributors’ behavior poses a threat of continued racketeering activity, as they have not ceased making false and misleading representations to government officials and to the public. 441. Plaintiff is a “person,” within the meaning of RICO, and has been injured in its business or property by: paying directly for costs associated with the opioid crisis, such as hospital admissions and other medical costs, police, firefighters, and emergency medical technician calls, as well as the loss in productivity of Plaintiff’s residents due to substance abuse, addiction, and death. 442. Plaintiff’s injuries and financial damages were proximately caused by the conduct constituting the RICO violation because such conduct fueled the opioid epidemic. 443. Plaintiff seeks three times actual damages, injunctive relief, costs, and attorneys’ fees, pursuant to N.J.S.A. § 2C:41-4(c). COUNT III NEW JERSEY CONSUMER FRAUD ACT 444. Plaintiff incorporates the allegations within all prior paragraphs within this Complaint as if they were fully set forth herein. 445. Defendants violated New Jersey's Consumer Fraud Act, N.J. Stat. Ann. § 56:8-1 et seq., because they engaged in unconscionable commercial practices, deception, fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression, or omission of a material fact or facts in connection with the sale or advertisement of merchandise. 446. In overstating the benefits of and evidence for the use of opioids for chronic pain and understating their very serious risks, including the risk of addiction; in falsely promoting 124 abuse-deterrent formulations as reducing abuse; in falsely claiming that OxyContin provides 12 hours of relief; and in falsely portraying their efforts or commitment to rein in the diversion and abuse of opioids, including in Hudson, Defendants have engaged in misrepresentations and knowing omissions of material fact. 447. Specifically, misrepresentations and false pretenses include, but are not limited to: a. Defendants' claims that the risks of long-term opioid use, especially the risk of addiction were overblown; b. Defendants' claims that signs of addiction were "pseudoaddiction" reflecting undertreated pain, and should be responded to with more opioids; c. Defendants' claims that screening tools effectively prevent addiction; d. Defendants' claims that opioid doses can be increased until pain relief is achieved; e. Defendants' claims that opioids differ from NSAIDS in that they have no ceiling dose; f. Defendants' claims that evidence supports the long-term use of opioids for chronic pain; g. Defendants' claims that chronic opioid therapy would improve patients' function and quality of life; h. Purdue's and Endo' s claims that abuse-deterrent opioids reduce tampering and abuse; i. Purdue's claims OxyContin provides a full 12 hours of pain relief; and j. Purdue's and Endo's claims that they cooperate with and support efforts to prevent opioid abuse and diversion. 448. By engaging in the acts and practices alleged herein, Defendants omitted to state material facts, with the intent that others rely on their omissions or suppression of information, that they had a duty to disclose by virtue of Defendants' other representations, including, but not limited to, the following: a. opioids are highly addictive and may result in overdose or death; b. no credible scientific evidence supports the use of screening tools as a strategy for reducing abuse or diversion; c. high dose opioids subject the user to greater risks of addiction, other injury, or death; d. exaggerating the risks of competing products, such as NSAIDs, while 125 ignoring the risks of hyperalgesia, hormonal dysfunction, decline in immune function, mental clouding, confusion, and dizziness, increased falls and fractures in the elderly, neonatal abstinence syndrome, and potentially fatal interactions with alcohol or benzodiazepines; e. Defendants' claims regarding the benefits of chronic opioid therapy lacked scientific support or were contrary to the scientific evidence; f. Purdue's 12-hour OxyContin fails to last a full twelve hours in many patients; g. Purdue and Endo' s abuse-deterrent formulations are not designed to address, and have no effect on, the most common route of abuse (oral abuse), can be defeated with relative ease; and may increase overall abuse; and h. Purdue and Endo failed to report suspicious prescribers. 449. Defendants' statements about the use of opioids to treat chronic pain were not supported by or were contrary to the scientific evidence, as confirmed by the CDC and FDA. 450. Further, Defendants' omissions, which were false and misleading in their own right, rendered even seemingly truthful statements about opioids false and misleading and likely to mislead County prescribers and consumers when taken in the context of the surrounding circumstances. 451. Defendants' acts and practices regarding prescribers and consumers as alleged in this Complaint are unconscionable commercial practices and are immoral, unethical, and offensive to established public policy, including: a. The policy, reflected in the County's and the State of New Jersey's efforts in this regard, to promote mental health and prevent substance abuse, and specifically, to curb the opioid epidemic in Hudson; b. The policy reflected in N.J. Stat. Ann. §24:6J-6, of supporting local opioid overdose prevention and response projects, c. The policy, reflected by the New Jersey Division of Consumer Affairs' guidelines' that patients be informed about opioids' side effects and drug interactions, receive the lowest dose and smallest 126 quantity of opioids, that the CDC Guideline recommending non-opioid approaches such as physical therapy, be followed. d. The policy, reflected in New Jersey Administrative Code Title 13, Chpt. 45H and the creation of a Suspicious Activity Report ("SAR") portal to facilitate reports, of reporting suspicious orders to authorities; 452. Defendants' acts and practices as alleged constituted unfair competition. At all times relevant to this Complaint, Purdue promoted OxyContin as providing 12 hours of pain relief, and promoted abuse-deterrent formulations of its opioids as more difficult to abuse and less addictive, as means of maintaining a competitive advantage against other opioid pharmaceuticals. At all times relevant to this Complaint, Defendants promoted opioids as superior to competing products, such as NSAIDs, and exaggerated the risks of NSAIDs while ignoring risks of adverse effects of opioids. 453. The County and its citizens are part of the broad class of persons that may avail themselves of a remedy under N.J. § 56:8-19. 454. The County has been injured as a direct and proximate result of Defendants' violations of the Consumer Fraud Act as alleged in this Complaint. 455. The County has suffered ascertainable loss of money or property as a result of Defendants acts and practices alleged in this Complaint. 456. Defendants are liable for three times the County's actual damages and reasonable attorneys' fees, filing fees, and reasonable costs of suit. 457. In addition to this, the citizens of the County have a right to recovery for the ascertainable loss suffered by them as a direct result of the unlawful conduct of Defendants. 458. Defendant’s employed unconscionable commercial practices, deception, fraud, false pretenses, false promises, misrepresentations, and knowingly concealed, suppressed, and 127 omitted material facts in connection with the sale and advertisement of their products, which caused significant injury and loss to the citizens of the County. 459. Defendant’s violations of the Consumer Fraud Act caused a quantifiable and measurable loss to the citizens of the County including, but not limited to, the expenses and/or losses suffered by them as a result of Defendant’s unlawful conduct, as well as future out of pocket expenses and all other costs that will be incurred by them as a result of the numerous violations by Defendants. 460. Defendants are similarly liable for three times the actual damages suffered by the citizens of the County, and reasonable attorneys' fees, filing fees, and reasonable costs of suit as well as disgorgement of all profits that resulted from their unlawful conduct in New Jersey as authorized under N.J.S.A. 56:8-13. 461. Each unconscionable commercial practice and/or act of deception by Defendant constitutes a separate violation under the CFA, N.J.S.A. 56:8-2. COUNT IV NEGLIGENT MISREPRESENTATION 462. Plaintiff incorporates the allegations within all prior paragraphs within this Complaint as if they were fully set forth herein. 463. Defendants, individually and acting through their employees and agents, made misrepresentations and omissions of facts material to Plaintiff and its residents to induce them to purchase, administer, and consume opioids as set forth in detail above. 464. In overstating the benefits of and evidence for the use of opioids for chronic pain and understating their very serious risks, including the risk of addiction; in falsely promoting abuse-deterrent formulations as reducing abuse; in falsely claiming that OxyContin provides 12 hours of relief; and in falsely portraying their efforts or commitment to rein in the diversion and 128 abuse of opioids, including in Hudson, Defendants have engaged in misrepresentations and knowing omissions of material fact. Specifically, misrepresentations or omissions include, but are not limited to: a. Defendants' claims that the risks of long-term opioid use, especially the risk of addiction were overblown; b. Defendants' claims that signs of addiction were "pseudoaddiction" reflecting undertreated pain, and should be responded to with more opioids; c. Defendants' claims that screening tools effectively prevent addiction; d. Defendants' claims that opioid doses can be increased until pain relief is achieved; e. Defendants' claims that opioids differ from NSAIDS in that they have no ceiling dose; f. Defendants' claims that evidence supports the long-term use of opioids for chronic pain; g. Defendants' claims that chronic opioid therapy would improve patients' function and quality of life; h. Purdue's and Endo' s claims that abuse-deterrent opioids reduce tampering and abuse; i. Purdue's claims OxyContin provides a full 12 hours of pain relief; and j. Purdue's and Endo's claims that they cooperate with and support efforts to prevent opioid abuse and diversion. 465. By engaging in the acts and practices alleged herein, Defendants omitted to state material facts that it had a duty to disclose by virtue of Defendants' other representations, including, but not limited to, the following: a. opioids are highly addictive and may result in overdose or death; b. no credible scientific evidence supports the use of screening tools as a strategy for reducing abuse or diversion; c. high dose opioids subject the user to greater risks of addiction, other injury, or death; d. exaggerating the risks of competing products, such as NSAIDs, while ignoring the risks of hyperalgesia, hormonal dysfunction, decline in immune function, mental clouding, confusion, and dizziness, increased falls and fractures in the elderly, neonatal abstinence syndrome, and potentially fatal interactions with alcohol or benzodiazepines; e. Defendants' claims regarding the benefits of chronic opioid therapy lacked scientific support or 129 were contrary to the scientific evidence; f. Purdue's 12-hour OxyContin fails to last a full twelve hours in many patients; g. Purdue and Endo's abuse-deterrent formulations are not designed to address, and have no effect on, the most common route of abuse (oral abuse), can be defeated with relative ease; and may increase overall abuse; and h. Purdue and Endo failed to report suspicious prescribers. COUNT V FRAUD (against All Defendants) 466. Plaintiff incorporates the allegations within all prior paragraphs within this complaint as if they were fully set forth herein. 467. Defendants violated their general duty not to actively deceive, and have made knowingly false statements and have omitted and/or concealed information which made statements by Defendants knowingly false. Defendants acted intentionally and/or unlawfully. 468. As alleged herein, Defendants made false statements regarding their compliance with state and federal law regarding their duties to prevent diversion, their duties to monitor, report and halt suspicious orders, and/or concealed their noncompliance with these requirements. 469. As alleged herein, the Manufacturer Defendants engaged in false representations and concealments of material fact regarding the use of opioids to treat chronic non-cancer pain. 470. As alleged herein, Defendants knowingly and/or intentionally made representations that were false. Defendants had a duty to disclose material facts and concealed them. These false representations and concealed facts were material to the conduct and actions at issue. Defendants made these false representations and concealed facts with knowledge of the falsity of their representations, and did so with the intent of misleading Plaintiff, Plaintiff's community, the public, and persons on whom Plaintiff relied. 130 471. These false representations and concealments were reasonably calculated to deceive Plaintiff, Plaintiff's Community, and the physicians who prescribed opioids for persons in Plaintiff's Community, were made with the intent to deceive, and did in fact deceive the County, Plaintiff, and Plaintiff's Community. 472. Plaintiff, Plaintiff's Community, and the physicians who prescribed opioids reasonably relied on these false representations and concealments of material fact. 473. Plaintiff justifiably relied on Defendants' representations and/or concealments, both directly and indirectly. Plaintiff's injuries were proximately caused by this reliance. 474. The injuries alleged by Plaintiff herein were sustained as a direct and proximate cause of Defendants' fraudulent conduct. 475. Plaintiff seeks economic losses (direct, incidental, or consequential pecuniary losses) resulting from Defendants' fraudulent activity, including fraudulent misrepresentations and fraudulent concealment. COUNT VI UNJUST ENRICHMENT (Against All Defendants) 476. Plaintiff incorporates the allegations within all prior paragraphs within this complaint as if they were fully set forth herein. 477. Defendants are liable for unjust enrichment because Defendants received a benefit at the expense of the plaintiffs and it would be inequitable or unjust for Defendants to retain that benefit. 478. The Opioid Manufacturers were enriched by promoting the falsity that opioids are safe, non-addictive, and effective for long-term pain. Members of Plaintiff’s community were misled into prescribing and/or taking opioid medications that they would not otherwise have taken because these medications have adverse side effects, are highly addictive, and are not 131 effective for long-term pain management, since patients develop a tolerance to opioid medications over time. 479. The Opioid Distributors were enriched by their conduct of concealing and refusing to report suspicious orders of opioids from prescribers and pharmacies. These pharmacies and prescribers diverted millions of opioid pills to the black market, and used illegally acquired funds to pay the Opioid Distributors hundreds of millions, if not billions, of dollars. 480. Plaintiff suffered a loss. Their community was subjected to an opioid epidemic, which increased addiction rates to prescription opioids and heroin, overdose rates, rates of asthma-related complications, and rates of blood-borne illnesses. Plaintiff was forced to expend substantial resources fighting the opioid epidemic in their community, such as the cost of increased hospitalizations, law enforcement, criminal justice, and social services. 481. There is a nexus between Plaintiff’s losses and the Defendants’ enrichment. The Opioid Manufacturers caused the opioid epidemic by ensuring that opioids would be widely prescribed for chronic pain, and the Opioid Distributors fanned the flames of the epidemic by covering for pharmacies and prescribers who had suspicious ordering patterns due to their black market activities. This opioid crisis directly led to Plaintiff’s losses. 482. To permit Defendants to maintain their pecuniary gains from their wrongful conduct would work an injustice. Inequity would result because Defendants should not be permitted to profit from their role in causing the worst drug epidemic in U.S. history. A bad precedent would be set if pharmaceutical companies and distributors are permitted to profit from lying to the public about the safety and efficacy of their medications and knowingly selling 132 prescription drugs to pharmacies and prescribers that had order patterns indicating resale on the black market. 483. There is no public policy in New Jersey that would prevent application of unjust enrichment doctrine. On information and belief, no contract exists between Plaintiff and the Defendants that would govern rather than quasi-contractual theories. And, if anything, public policy weighs in favor of restoring to New Jersey’s municipalities the money that Defendants have sucked out of their budgets and community by causing the opioid crisis. 484. By reason of the foregoing, Defendants must disgorge their unjustly acquired revenues and provide restitution to the Plaintiff. COUNT VII NEGLIGENCE (Against All Defendants) 485. Plaintiff incorporates the allegations within all prior paragraphs within this complaint as if they were fully set forth herein. 486. New Jersey tort law imposes responsibility for damages caused by negligence or fault. 487. Defendants have a duty to exercise reasonable care in the sale and distribution of opioids. 488. The Opioid Manufacturers breached this duty by failing to exercise reasonable care in instructing doctors how and when to prescribe opioids. Specifically, Opioid Manufacturers told doctors that they should prescribe opioids for chronic pain, even though for the vast majority of chronic-pain patients, the risks from opioids outweigh the potential benefits. The Opioid Manufacturers had a duty to disclose to doctors the true risk of prescribing opioids. Doctors reasonably relied on the Opioid Manufacturers’ assertions that opioids were safe, nonaddictive, and effective for long-term pain. Doctors had a duty to their patients to do no harm. 133 Patients reasonably relied on their doctors not to prescribe them a medication that was more likely to harm them than help them. As a result of patients’ reliance, the opioid epidemic occurred and caused harm to Plaintiff. 489. The Opioid Distributors breached their duty of reasonable care by failing to flag suspicious orders of prescription opioids and stop shipment. The opioid epidemic was a foreseeable result of the Opioid Distributors’ failure to act. The opioid epidemic caused Plaintiff harm. 490. The Opioid Distributors also breached their duty of reasonable care by failing to disclose to law enforcement that suspicious orders of prescription opioids were being made. The Opioid Distributors have an obligation to monitor orders and disclose this information to the Drug Enforcement Administration, and have a duty to follow all obligations in their distribution of prescription drugs. The opioid epidemic occurring or being exacerbated was a foreseeable result of the Opioid Distributors failure to act. Plaintiff was harmed as a result of the opioid epidemic. 491. Plaintiff was harmed by the lost productivity of their residents and by paying increased cost for drug treatment and rehabilitation, other medical costs of overdose, withdrawal, asthma sufferers, and transferable diseases, increased cost of law enforcement, criminal justice, and criminal punishment, and increased cost for social services provided to wards of the State. 492. The opioid crisis was a reasonably foreseeable consequence of the Defendants’ acts and omissions, and Plaintiff’s harm was a reasonably foreseeable result of the opioid crisis. 493. Plaintiff is without fault in regards to the injuries they suffered as a result of Defendants’ conduct. 134 COUNT VIII CIVIL CONSPIRACY 494. Plaintiff incorporates the allegations within all prior paragraphs within this complaint as if they were fully set forth herein. 495. The Distributor Defendants continuously supplied prescription opioids to the Pharmacy Defendants despite having actual or constructive knowledge that said pharmacies were habitually breaching their common law duties and violating New Jersey law. 496. Without the Distributor Defendants’ supply of prescription opioids, the Pharmacy Defendants would not be able to fill and dispense the increasing number of prescription opioids throughout the County. 497. The Pharmacy Defendants continuously paid the Distributor Defendants to supply large quantities of prescription opioids in order to satisfy the demand for the drugs. 498. Neither side would have succeeded in profiting so significantly from the opioid epidemic without the concerted conduct of the other party. 499. As a result of the concerted action between the Distributor Defendants and the Pharmacy Defendants, the County and her citizens have suffered damage. COUNT IX CIVIL CONSPIRACY 500. Plaintiff incorporates the allegations within all prior paragraphs within this complaint as if they were fully set forth herein. 501. The Manufacturer Defendants continuously supplied prescription opioids to the Distributor Defendants despite having actual or constructive knowledge that the Distributor Defendants were habitually breaching their common law duties and violating New Jersey law. 135 502. Without the Manufacture Defendants’ supply of prescription opioids, the Distributor Defendants would not be able to fill and dispense the increasing number of prescription opioids throughout the County. 503. The Distributor Defendants continuously paid the Manufacturer Defendants to supply large quantities of prescription opioids in order to satisfy the demand for the drugs. 504. Neither side would have succeeded in profiting so significantly from the opioid epidemic without the concerted conduct of the other party. 505. As a result of the concerted action between the Manufacturer Defendants and the Distributor Defendants, the County and her citizens have suffered damage. PUNITIVE DAMAGES 506. Plaintiff re-alleges all paragraphs of this complaint as if set forth fully herein. 507. By engaging in the above-described intentional and/or unlawful acts or practices, Defendants acted with actual malice, wantonly, and oppressively. Defendants acted with conscious disregard to the rights of others and/or in a reckless, wanton, willful, or grossly negligent manner. Defendants acted with a prolonged indifference to the adverse consequences of their actions and/or omissions. Defendants acted with a conscious disregard for the rights and safety of others in a manner that had a great probability of causing substantial harm. Defendants acted toward the Plaintiff with fraud, oppression, and/or malice, and/or were grossly negligent in failing to perform the duties and obligations imposed upon them under applicable Federal and State statutes, and law. 508. Defendants were selling and/or manufacturing dangerous drugs statutorily categorized as posing a high potential for abuse and severe dependence. Thus, Defendants knowingly traded in drugs that presented a high degree of danger if prescribed incorrectly or diverted to other than legitimate medical, scientific, or industrial channels. Because of the severe 136 level of danger posed by, and indeed visited upon the State, County and Plaintiff’s community by these dangerous drugs, Defendants owed a high duty of care to ensure that these drugs were only used for proper medical purposes. Defendants chose profit over prudence and the safety of the community, and an award of punitive damages is appropriate, as punishment and deterrence. 509. By engaging in the above-described wrongful conduct, Defendants also engaged in willful misconduct and gross negligence, and exhibited an entire want of care that would raise the presumption of a conscious reckless indifference to consequences. PRAYER FOR RELIEF 510. WHEREFORE, the Plaintiff respectfully requests that this Court grant the following relief: 511. An Order Entering Judgment in favor of the Plaintiff against each of the Defendants; 512. An Order Enjoining the Defendants and their employees, officers, directors, agents, successors, assignees, merged or acquired predecessors, parent or controlling entities, subsidiaries, and all other persons acting in concert or participation with them, from engaging in unlawful sales and/or distribution of prescription opioid pills and ordering temporary, preliminary or permanent injunction; 513. An Order that Defendants compensate the Plaintiff for past and future costs to abate the ongoing public nuisance caused by the opioid epidemic; 514. An Order Defendants to fund an “abatement fund” for the purposes of abating the opioid nuisance; 515. An Order Awarding actual damages, treble damages, injunctive and equitable relief, forfeiture as deemed proper by the Court, and attorney fees and all costs and expenses of suit pursuant to Plaintiff’s racketeering claims; 137 516. An Order that the conduct alleged herein constitutes violations of the New Jersey Consumer Fraud Act; 517. An Order that Plaintiff is entitled to treble damages pursuant to the New Jersey Consumer Fraud Act 518. An Order that Defendants are negligent under New Jersey law; An Order that Defendants have been unjustly enriched at Plaintiff’s expense; 519. An Order Disgorging defendants of all profits that result from their unlawful conduct in New Jersey, as authorized by N.J.S.A. 56:-8 520. An Order that Defendants’ conduct constitutes violations of the New Jersey Racketeer Influenced and Corrupt Organizations Act (“New Jersey RICO”), N.J.S.A. 2C:41-1, et seq.; 521. An Order that the conduct alleged herein constitutes a civil conspiracy under New Jersey law; 522. An Order that Plaintiff is entitled to treble damages pursuant to New Jersey RICO; 523. Awarding the Plaintiff 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. 138 524. Disgorging Defendants of all profits that resulted from their unlawful conduct in New Jersey. 525. Awarding judgment against the Defendants requiring Defendants to pay punitive damages; 526. Granting the Plaintiff: a. The cost of investigation, reasonable attorneys’ fees, and all costs and expenses; b. Pre-judgment and post-judgment interest; and, c. Recovery of damages jointly, severablely, and serially (N.J.S.A. 2A: 15-5.3), d. All other relief as provided by law and/or as the Court deems appropriate and just. JURY TRIAL DEMAND 527. Plaintiff hereby requests trial by jury for all issues so triable. Date: March 28, 2018 Respectfully submitted, /s/ Marc Grossman, Esq. Marc Grossman, Esq. Vicki Maniatis, Esq. SANDERS PHILLIPS GROSSMAN, LLC /s/ David Eisbrouch David Eisbrouch, Esq. EISBROUCH MARSH, LLC 139