New Purdue opioid crisis settlement builds ‘momentum' for Canada: B.C. AG
Monday saw 55 U.S. states and territories reach a US$7.5-billion settlement with Purdue, the maker of OxyContin, and members of the Sackler family that sought to hold them accountable for contributing to the opioid overdose crisis.
As part of the settlement, the Sacklers will give up their control of the bankrupt company and will be barred from selling prescription opioids in the future.
A federal judge said Wednesday that he will rule Friday on a plan for local governments and individual victims, who would also be entitled to compensation, to vote on approving the settlement by September, allowing it to proceed.
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The announcement of the U.S. settlement came after the B.C. Supreme Court on Friday certified a class-action lawsuit by the province against McKinsey & Company, which is accused of advising Purdue and other drugmakers on how to market their opioid products in Canada.
McKinsey has already had to pay over US$1 billion in penalties to settle similar lawsuits in the U.S., which also led to jail time for a McKinsey executive.
'I'm really pleased with the momentum,' B.C. Attorney General Niki Sharma told Global News in an interview.
'My job as attorney general is to make sure we pursue it very aggressively and as quickly as we can, so I am heartened by the success in the States and will keep on leading the charge here in Canada.'
The B.C. lawsuit against McKinsey is separate from a larger class action against dozens of opioid manufacturers and distributors on allegations they downplayed the risk their products posed in order to rake in profits. That lawsuit was allowed to go ahead last fall and was certified in January.
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B.C. is leading both lawsuits on behalf of the other Canadian provinces and territories and the federal government, with the goal of recovering health-care costs that went toward responding to the overdose crisis, Sharma said.
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'We think it's unfair that companies that profited so much, knowing that their product was so harmful and that would cause this level of addiction, aren't paying for the costs of health care,' she said.
A spokesperson for McKinsey told Global News it intends to defend itself against the lawsuit, which the company says is without merit.
'McKinsey did not undertake any work in Canada to enhance the sale or marketing of opioids,' the spokesperson said in an email.
Alleged tactics to 'turbocharge' opioid sales
B.C.'s lawsuit against McKinsey alleges the Canadian subsidiaries of Purdue, as well as Johnson & Johnson, Janssen and other drugmakers, employed many of the same tactics used by U.S. parent companies to boost their sales.
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The B.C. Supreme Court, in certifying the lawsuit, noted in its decision that multinational companies often apply business and marketing strategies 'universally.'
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Last December, McKinsey agreed to pay U$650 million to resolve a U.S. Justice Department lawsuit that focused on the firm's work with Purdue, including allegations that McKinsey advised on steps to 'turbocharge' sales of OxyContin.
Martin Elling, a former McKinsey senior partner who worked on Purdue matters, was sentenced to six months in prison after pleading guilty to obstruction of justice related to that case.
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The federal settlement was on top of a combined US$641 million McKinsey agreed to pay in 2021 to resolve similar claims brought by U.S. state attorneys general.
In total, federal and state lawsuits related to the opioid crisis have resulted in roughly US$50 billion in settlements, according to researchers from Johns Hopkins University who track such claims.
Long-term heavy use of prescription painkillers like OxyContin due to dependence contributed to a majority of opioid-related hospitalizations and overdoses in the early 2000s across North America. In recent years, illicit opioids like fentanyl have overtaken prescription opioids as the primary driver of the opioid crisis.
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Between 2016 and last September, nearly 51,000 Canadians have died of an opioid-related overdose, according to federal data. B.C., which declared a public health emergency in 2016, saw the most fatal overdoses of any other province during that time, with more than 16,000 deaths.
'I think like many provinces across this country, we've really seen the toll of the opioid crisis on people not only with long-lasting addictions and impacts there, but loss of life and a lot of people that are mourning the loss of their loved ones,' Sharma said.
A spokesperson for Health Canada said the federal government 'believes companies should be held accountable for their role in the overdose crisis' and will continue to work with provinces and territories on B.C.'s legal actions.
'The overdose crisis continues to be one of Canada's most pressing public health challenges,' the spokesperson said in an email to Global News.
Health Canada is reviewing and 'considering' developments from the recent Purdue settlement in the U.S., the statement added.
Where should the money go?
In 2022, B.C. secured a $150-million settlement on behalf of Canadian governments in a class action against Purdue. The settlement was finalized in early 2023, allowing individuals to submit claims from a $20-million portion set aside for victims and their families, a process that remains ongoing.
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The pending lawsuit against opioid manufacturers and distributors names Purdue and its various subsidiaries, as well as Johnson & Johnson, Janssen and Canadian companies like Loblaw and its subsidiary Shoppers Drug Mart. It remains in litigation.
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B.C. government steps up legal action against opioid drug makers
Researchers writing in the International Journal of Drug Policy earlier this year urged Canadian governments to ensure funds recovered from opioid lawsuit settlements go directly toward combating the drug crisis, rather than unrelated government expenses.
Those measures should include funding harm reduction services like overdose prevention centres and safe drug supplies, as well as community organizations that work directly with people suffering from addiction, the paper says.
Efforts to track how U.S. state and local governments are spending their opioid settlement money have uncovered several examples of funds not being used to directly respond to the opioid crisis.
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Canada is being urged to avoid similar 'pitfalls' by mandating that at least 85 per cent of recovered funds be allocated to 'opioid remediation efforts,' and working directly with community organizations and members affected by addiction.
Proposed guidelines by researchers at Johns Hopkins University for how U.S. opioid settlement funds should be spent have been adopted in over 25 states, according to the university.
Sharma said B.C.'s lawsuits are structured so that any funds recovered by the province will be mandated to go to the health-care system, but that could evolve depending on how settlements are structured.
'It may be that as this develops, and the opioid cases develop, it will be tied to organizations that do addictions treatment, or there could be a whole range of things that go directly towards this crisis,' she said.
She pointed to the record $32.5-billion settlement B.C. won in March on behalf of Canadian governments in its lawsuit against the tobacco industry as a model both of the province's health-related legal advocacy and the results it can achieve.
'We are really focused on eliminating the bad actors,' she said.
'It's really important to make sure that we set a line in the sand about what's right and what isn't right with the conduct of all companies out there.'
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