Chicago adds 'Big Three' pharma wholesalers to list of companies being sued over opioid crisis

By Jonathan Bilyk | Mar 6, 2018

Editor's note: This article has been updated from a previous version to include a response from a trade association speaking for the defendants in this case. 

As class action litigation continues to grow across the U.S. against the pharmaceutical companies that made opioid prescription painkillers, the city of Chicago has also set its sights in court on three companies it blames for distributing the addictive pills here, saying the companies should be made to pay for allegedly not monitoring the flow of the drugs or halting the suspicious activity at pharmacies and elsewhere that allegedly “fueled” the black market for the drugs.

On March 5, lawyers for the city filed suit in Chicago federal court against defendants, wholesale pharmaceutical distributors AmerisourceBergen Drug Corp., of Chesterbrook, Pa.; Cardinal Health Inc., of Dublin, Ohio; and McKesson Corp., of San Francisco. According to the lawsuit, each of the defendants locally operate distribution centers in Chicago’s suburbs, including Aurora, Romeoville and Burr Ridge.

The complaint does not place a particular dollar figure the city is asking the court to order the distributors to pay. However, the complaint asks the court to award an array of damages, including reimbursement to the city for its costs in providing services to those addicted to opioids; civil penalties of $10,000 per violation per day for consumer fraud; exemplary damages; and an order for the defendants turn over all “unjust profits” earned from distributing the drugs in the city.

Kenneth Wexler   Wexler Wallace LLP

“The cost of this human tragedy cannot be calculated or ever adequately compensated,” the city wrote in its complaint. “But the financial burden to the City is staggering.”

In response to the lawsuit, John Parker, senior vice president of the Healthcare Distribution Alliance, a trade association which includes the three defendants in the city's lawsuit, issued a prepared statement: 

“The misuse and abuse of prescription opioids is a complex public health challenge that requires a collaborative and systemic response that engages all stakeholders," Parker said. "Given our role, the idea that distributors are responsible for the number of opioid prescriptions written defies common sense and lacks understanding of how the pharmaceutical supply chain actually works and is regulated. Those bringing lawsuits would be better served addressing the root causes, rather than trying to redirect blame through litigation.”

Since 2014, City Hall has been among a growing number of other cities and local governments to sue a group of pharmaceutical companies known for the manufacture and sale of the so-called opioid painkillers. Marketed under such brand names as Oxycontin and Percocet, the pills have fueled what government officials have described as a growing public health crisis, as rates of addiction and overdose deaths from abuse of the pills continue to grow.

In the lawsuits against the drugmakers, the city asserted the companies committed consumer and insurance fraud, among other alleged legal misdeeds, in promoting the use of the prescription painkillers beyond their prior more limited use in post-surgical and end-of-life care.

The lawsuits specifically alleged the drugmakers encouraged doctors to prescribe the companies’ opioid products for the treatment of chronic pain and downplayed the risk of addiction and other problems.

Those lawsuits have since been consolidated into a massive court action now pending in Ohio federal court.

However, as that action progresses, Chicago’s legal team has now opened a new front in the legal conflict, now pursuing the three wholesalers it says distributed at least 90 percent of the opioid pills into Chicago, and who allegedly knowingly continued to keep the supply lines flowing, even when it should have been apparent pharmacies were being used to divert pills into an illegal underground market.

“Sales and distribution data available to Defendants, as well as their own observations, would, or should, have put them on notice of potential diversion,” the city alleges in its new lawsuit. “Yet, upon information and belief, Defendants consistently failed to report or suspend these illicit orders, deepening the crisis of opioid abuse, addiction and death in the City.”

In the complaint, the city alleges the wholesale distributors had “several responsibilities” under state and federal laws to detect and stop suspicious pharmaceutical orders, yet did not, allegedly exacerbating the boom market for the pills, both legal and illegal.

To back its assertions, the city pointed to enforcement actions taken against the defendant companies by the federal Drug Enforcement Administration since 2007, which in at least two cases, resulted in civil penalties of $44 million paid by Cardinal and $150 million paid by McKesson for administrative actions pertaining to behavior at distribution centers, including McKesson’s Aurora facility.

“Defendants compounded the harms from aggressive marketing that overcame barriers to widespread prescribing of opioids for chronic pain by supplying opioids beyond even what this expanded market could bear, and by turning a blind eye to red flags that they were fueling abuse and diversion of these dangerous drugs,” the city asserted.

According to the complaint, the city asserts, in 2016, McKesson reported revenues of $191 billion; AmerisourceBergen, $147 billion; and Cardinal Health, $121 billion.

The city is represented in the action by in-house counsel from its Department of Law and attorneys Linda Singer, Elizabeth Smith, David Ackerman, Lisa Saltzburg, Jennifer Guy and Natalie Deyneka, all with the firm of Motley Rice LLC, of Washington, D.C., and Mount Pleasant, S.C., and attorneys Kenneth Wexler and Thomas Doyle, of the firm of Wexler Wallace LLP, of Chicago.

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Organizations in this Story

AmerisourceBergen Cardinal Health, Inc City of Chicago Mckesson Corporation Motley Rice LLC U.S. District Court for the Northern District of Illinois Wexler Wallace LLP

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