In the U.S., millions of people suffer from chronic pain conditions and are prescribed prescription narcotics to alleviate their symptoms. Since the late 1990s, several drug companies have engaged in marketing campaigns through which they allegedly pushed doctors and other health care professionals to prescribe their pain medications. These medications, called opioid analgesics, carry a high potential for addiction and abuse. Despite this, the drug manufacturers purportedly told doctors that their drugs had a low potential for addiction. Through these marketing efforts, millions of people across the U.S. were prescribed opioid medications to treat everything from migraine headaches to cancer-related pain. While opioid analgesics are indicated for cancer pain, their use for non-cancer pain has been problematic.
One company that has largely flown under the radar in the media that has played a central role in the opioid epidemic is Mallinckrodt, an Irish pharmaceutical company that has its U.S. headquarters in St. Louis. While companies like Purdue Pharma have seized headlines, this company is the largest manufacturer of opioid drugs in the U.S. According to a report by the New York Times, the company manufactured almost 38% of the opioid drugs in the U.S. from 2006 to 2012. By comparison, Purdue Pharma, which has grabbed the headlines, manufactured 3% of the U.S. opioid market supply between those years. This company manufactures two branded opioid medications along with many generic opioid analgesics, and its drugs have had a large impact on public health. Because of the role that this drug manufacturer has played, cities, counties, and states across the U.S. have filed lawsuits against it. Through the lawsuits, the plaintiffs hope to recoup some of the losses that they have suffered and to use the money to combat the epidemic of addiction, abuse, and overdose deaths.
What are opioid drugs?
Opioid analgesics are naturally occurring substances that are found in the opium poppy, a plant that is common in areas of Asia. The bulbs of the plant secrete a thick, gel-like substance, which is raw opium. This substance is scraped from the bulbs. Solvents are used to solidify it, and it is sold around the world to make illegal and legal opioid drugs such as heroin and morphine. Some prescription opioid medications are made from the plant while others are synthesized in the lab. These substances can be used to block signals of pain and may be prescribed to treat moderate to severe pain. However, they also can produce a high in some people, leading many to become addicted to them.
How do opioid analgesics work in the brain, and why are they addictive?
Opioid drugs work by attaching to opioid receptor sites on the ends of nerve cells. When a pain signal is sent from your pain receptors to your central nervous system, the signal normally will be carried to the brain. The brain will then decide how to react, and you will feel pain. When you take an opioid drug, it attaches to the opioid receptors in the neural synapses between the nerves in the pain-signaling pathway. This blocks the transmission of the pain signal so that you can feel relief from your pain. However, when these drugs bind to your opioid receptors, they also have wide-ranging effects beyond blocking the transmission of the pain signals.
The body has naturally occurring opioid substances that it produces, and opioid drugs work by mimicking them. However, they do not work in the same way and send abnormal signals throughout the brain. When people take opioid medications, the drugs cause the reward system of the brain to be flooded with dopamine. This is a neurotransmitter that affects pleasure, motivation, movement, and cognition. When the reward system of the brain is overstimulated, it produces feelings of euphoria that cause some people to misuse the drugs.
People who take opioid drugs will find that they need increasing amounts to produce the same sensations that they initially felt. As people continue to take and abuse these drugs, how their brains function may change. Eventually, people may need to take large quantities of opioid drugs to feel normal and to avoid going through painful withdrawal symptoms.
How bad is the opioid crisis?
The opioid crisis or epidemic has impacted millions of Americans. According to the Centers for Disease Control and Prevention, approximately 218,000 people died from prescription opioid overdoses from 1999 to 2017. The number of deaths from prescription opioid overdoses was five times higher in 2017 as compared to 1999. The National Institute on Drug Abuse reports that more than 130 people die every day in the U.S. after overdosing on opioid drugs. The economic burden of prescription opioid drug abuse alone is estimated at $78.5 billion, and this figure does not include the burden associated with the abuse of illicit drugs like heroin. Finally, up to 29% of people who are prescribed opioid medications abuse them.
These statistics demonstrate the reach of the epidemic. Opioid abuse has reached people in rural and urban areas and has impacted millions. In addition to the people who are addicted, the epidemic has taken a toll on their families, friends, and communities as they struggle to deal with the associated problems. Many people who become addicted to opioid drugs were initially prescribed the drugs to treat real medical issues. After becoming addicted, some people turn to illegal opioid drugs such as fentanyl or heroin as a way to seek a high at a lower financial cost.
As noted above, Mallinckrodt is an Irish pharmaceutical company that has its U.S. headquarters located in St. Louis, Missouri. The company was originally founded in 1867 in St. Louis and was later bought by Covidien. In 2011, Covidien announced that it was allowing the company to spin off to become its own publicly-traded company. The company is the biggest supplier of generic opioid medications and also manufacturers two brand-name drugs. Its subsidiary, SpecGX, handles the manufacture of the generic opioid drugs for the company. In the four years from 2008 to 2012, the company was responsible for selling 66% of all of the oxycodone that was sold in the state of Florida.[8}
Opioid drugs sold by the company and its subsidiary, SpecGX
Mallinckrodt manufacturers two branded opioid medications, including Roxicodone and Exalgo, under its name. It also developed Xartemis XR, which was a combination of oxycodone and acetaminophen in an extended-release form, which was approved by the FDA in 2014 but has since been discontinued. SpecGX is the subsidiary that handles all of the company’s generic opiate medications. SpecGX manufactures the following generic opioid drugs:
- Acetaminophen and codeine phosphate
- Fentanyl citrate
- Fentanyl transdermal system
- Hydrocodone bitartrate and acetaminophen
- Hydromorphone hydrochloride
- Hydromorphone hydrochloride extended-release
- Methadone hydrochloride
- Morphine sulfate
- Oxycodone hydrochloride and acetaminophen
- Oxycodone hydrochloride
- Oxymorphone hydrochloride
- Oxymorphone hydrochloride extended-release
The company’s marketing tactics were aggressive enough that investigators with the Drug Enforcement Administration characterized the company as the “kingpin of the drug cartel” in documents that were filed in court. The company reportedly told its sales staff to “attack” by waiting outside of medical office doors for doctors to arrive and by giving away free samples of its drugs. The company’s signature drug, Roxicodone, was so addictive that its 30-mg form received its street name, “M,” after the distinctive M stamped into the side of the blue pills.
Lawsuits against the company
Mallinckrodt has faced numerous lawsuits for its role in the epidemic. The DEA began investigating the company after orders for 500 million of its pills made their way to Florida from 2008 to 2012 that the company had failed to report as suspicious orders. While the federal government did not file a lawsuit, the company settled the case for $35 million in 2017 while admitting no wrongdoing. Many states, counties, cities, and tribal governments have also filed lawsuits against the company. Many of these lawsuits claim that the company engaged in deceptive and fraudulent marketing tactics to expand its sales and profits from its drugs. The lawsuits also allege that the company failed to disclose the high risks of addiction and that it minimized the risks. Finally, the lawsuits allege that the company failed to have controls in place to detect diversion and to report suspicious shipments of its drugs.
On September 29, 2019, Mallinckrodt announced that it had finalized a settlement of $30 million in a lawsuit against it by two counties in Ohio, Cuyahoga and Summit, in a large federal case against multiple drug manufacturers that is scheduled to take place in a couple of weeks. The company is reportedly trying to reach a global resolution for all of the claims against it world-wide.
At the beginning of September 2019, the company’s stock price took a major hit after reports surfaced that it had hired a restructuring firm and was considering bankruptcy. The company has sought to downplay those concerns and has publicly stated that bankruptcy is not currently under consideration. However, the company already has nearly $5 billion in debts. With all of the lawsuits pending against it, it might have to file for Chapter 11 bankruptcy protection if it is unable to meet all of its liabilities.
What happens if a bankruptcy petition is filed?
If the company files a Chapter 11 bankruptcy petition, it will have to submit several schedules and a proposed debt reorganization plan to the bankruptcy court. The debt reorganization plan is a proposal for how the company’s outstanding debts should be addressed and includes creditor claims such as lawsuits and others. If a bankruptcy petition is filed, the bankruptcy court will issue an automatic stay to all of the creditors. This is an injunction against the creditors that tells them to halt all collection activities, including pending lawsuits. The automatic stay would effectively freeze any pending court litigation. However, those claims could then be filed in the bankruptcy court for the claimants to pursue litigation there in the bankruptcy case.
Creditors that are not listed in the company’s schedules are required to file notices of claim within a prescribed period after the petition is filed. People and entities that have valid claims will be able to file their notices of claims through the bankruptcy court. However, the claims must be filed on a timely basis, or they may be prevented from recovering damages.
If a bankruptcy petition is filed, litigating the claims through the bankruptcy process will likely proceed faster than it otherwise would in court. The bankruptcy court does not have to accept a company’s proposed reorganization plan. The creditors are allowed to object to the plan and to propose their plans. If a plan is approved, the trustee will be responsible for disbursing the funds that are allocated to each claimant in the plan.
There is no guarantee that Mallinckrodt will file a bankruptcy petition. People and entities that have suffered harm and injuries because of the opioid epidemic and the actions of this company may want to talk to the experienced opioid drug attorneys at Lamber Goodnow or one of our co-counsel firms. An experienced attorney can review the facts and circumstances and conduct an in-depth investigation to provide a fair evaluation of potential claims. If a bankruptcy petition is filed, our attorneys may represent claimants through the bankruptcy court process to help them to recover the compensation to which they should be entitled.
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