December 11, 2021

Winners and losers in America's opioid era

       As background on the opioid era, please read this post. In summary, three decades ago, pharmaceutical companies recreated the business model that the British used in 19th century China. Except this time, it was American customers instead of Chinese ones. And they didn't use the imperial British navy to fight those standing in their way; they used lobbyists, regulators and lawyers.

       If you have time, please also read or watch Dopesick, a series about how pharmaceutical companies started America's opioid crisis.

       And I use the word America's purposely. Dopesick recounts how pharma companies tried to execute their plan in Europe -- but were rebuffed by European regulators. There is one memorable scene where a top pharma executive becomes angry after learning of Germany's final rejection. As you can see below, opioid deaths are relatively rare in European countries. (For a detailed analysis of the differences between the United States and Europe with respect to opioids, see this OECD report.)

       I've written about O'Melveny's belief that a job in the United States government is something to be "monetized" for your own personal benefit (links one, two, three, four, five and six.) Well, according to Dopesick, this was true among some pharma regulators as well. It portrays them as giving approvals because they wanted lucrative private sector jobs. Dopesick even alleged that some top Department of Justice lawyers were on pharma's side. This all illustrates something quite disconcerting -- that the public may wish to be careful when relying on legal and regulatory officials to protect them.

       China fought wars to rid its country of opioids, and there is a figurative war here as responsible people fight to do the same. This is going to take a while, as the trend shows that things are getting worse. Apparently, an opioid epidemic is one of those things that's easy to start, but very hard to stop. It took China over a century to remove the scourge, a painful century. Although China was in its prosperous High Qing era when its opioid crisis started, the drug helped create the worst period in its history. (I hope that doesn't foreshadow what's in this store for this country over the next few decades.)

       But even in hard times, some do well. Every period is filled with people who suffer, but also those who thrive. Every era has its winners and losers, and so has America's opioid era. The first picture above is of O'Melveny's opioid team. They dressed up and flew to New York City to receive the "Product Liability Litigation Department of the Year" award at The American Lawyer Industry Awards, for their win on behalf of an opioid manufacturer.1 Beyond the award, the litigation was a financial win for O'Melveny. As its chair Brad Butwin explained, opioid cases are a key component of the firm's revenue strategy.

       Congratulations on your win O'Melveny.


1 These prior posts describe the related litigation: one, two, three and four. In summary, O'Melveny lost at trial after being overwhelmed by evidence. But appeals briefs threatened that Oklahoma would be boycotted if it allowed its nuisance statute to be used against opioid manufacturers. Possibly scared of these threats, the appeals court reversed the trial court and held that "nuisance law does not extend to the manufacturing, marketing, and selling of prescription opioids."

Richard Goetz, Sabrina Strong, Steve Brody, Amy Laurendeau, Charles Lifland