Poll question: Who’s the greatest escape artist of all time? Harry Houdini? Criss Angel? After this week, I’m going with the drug industry (which the Center for Justice & Democracy writes about in its new report, PILLS; Big Pharma, the FDA, and Problem Medicine). Let’s review.
Escape Trick #1: It has been remarkably difficult to hold gigantic drug companies legally accountable for creating the public health disaster known as the opioid crisis. Criminal laws and sanctions fall vastly short. Even if criminally liable, you can’t throw an industry in jail. Yet in terms of the number of deaths and the costly toll on local communities – law enforcement, health care systems, etc. – the harm has been staggering. So states and communities have had to get creative.
They thought they had it, at least in one state – Oklahoma, where state officials said the industry (and in this case, Johnson & Johnson) was liable for creating a “public nuisance” - that being oversupplying opioids to the state. Lower courts agreed. But this week, the Oklahoma Supreme Court threw out the public nuisance case, ruling in the drug company’s favor. A California lower court had done the same thing earlier this month. This isn’t the end of opioid litigation or settlement talks, of course. But now a major legal theory, one with real promise for holding accountable the pharmaceutical industry for this crisis, may be dead.
Escape Trick #2: In October, Johnson & Johnson, with a net worth of about $420 billion, filed for Chapter 11 bankruptcy in order to cheat customers it poisoned with asbestos in J&J talc powders, including baby powder. This was after engaging in a decades-long cover-up of this corporate crime. Rather than face its victims in court, J&J has decided to take advantage of a loophole in Texas law that allows companies to split in two - one with all the company’s assets, the other with all the liabilities for the harm they caused. The company with all the liabilities then filed for bankruptcy and some tens of thousands of claims got dumped into bankruptcy court. Sick and dying victims became nothing more than creditors in a bankruptcy.
Interestingly, J&J filed for bankruptcy in North Carolina for no reason other than they assumed they’d get a favorable judge there. Fortunately, the NC judge kicked the bankruptcy case back to J&J’s home state of New Jersey where it belongs - along with a 60 day stay so a new judge can get “up to speed.” We will see what happens. Meanwhile, Congress is also trying to deal with this kind of bankruptcy abuse, with legislation supported by more than 50 groups to prevent companies from using bankruptcy laws to escape responsibility to customers they harm or kill.
Interestingly, this isn’t J&J’s only “split” of late. It’s also now splitting its health care products from its pharmaceuticals. Not sure what the escape plan is with this move, but I’m sure they’re up to something.
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