City Weighs Costs, Benefits of Going After Big Pharma

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A hypodermic needle lays on the ground near a cleanup site. Photo by Scott Ball.

Scott Ball / Rivard Report

A hypodermic needle lies on the ground near downtown San Antonio.

As the City of San Antonio considers whether to join a class action lawsuit against opioid manufacturers and distributors for their alleged role in a crisis that has been devastating locally, City officials must weigh the benefits and the costs of what can become lengthy, and costly, legal action.

Pharmaceutical company representatives say placing the blame on any single entity misses the complexity of such cases. But a lawyer who has represented individuals and localities in similar lawsuits says the City itself may even underestimate current (and future) costs associated with opioid addiction and abuse.

Bob Hilliard, a double-board-certified, personal injury trial lawyer in Texas who was lead counsel and signed settlements with Toyota, General Motors, Coca Cola, and other large corporations, said that while the City, which does not operate jails or hospitals, may appear to have less of a stake in the lawsuit compared to the County, “there are still costs associated with addiction, abuse, and overdose” that the City incurs, including a “significant burden on the budgets of local governments.

“It is necessary to consider the number of individuals in [San Antonio] that are victim to opioid abuse and the marketing mechanisms of the manufacturers within your city,” Hilliard said.

Courtesy / HMG Law

Attorney Robert Hilliard

Last October, Bexar County commissioners voted to sue opioid manufacturers and distributors, aiming to recoup the enormous costs the County incurred. That expense includes caring for, treating, and sometimes burying the addicted; supporting their children, who may become involved with Child Protective Services and welfare systems; and paying first responders and city officials who deal with overdoses and more.

District Attorney Nico LaHood chose two San Antonio firms to represent Bexar County in the county’s lawsuit: Phipps Anderson Deacon and Watts Guerra.

The City is considering whether to join the County in suing opioid drug manufacturers and distributors. The city attorney’s office is currently reviewing proposals from area law firms to determine whether it would be financially and legally sound to file a suit.

City Council has had several discussions regarding the opioid crisis and options to sue. San Antonio’s Opioid Task Force, which met for the first time Aug. 8, 2017, is a City/County collaboration to reduce the number of drug overdose deaths in Bexar County. The bimonthly meetings have provided a platform for relevant organizations and officials in the City and County to discuss the lawsuits, best practices, and create a collaborative plan to combat the issue locally.  

Councilman Manny Pelaez (D8) said in a conversation with the Rivard Report on Saturday that council members are “curious” about the lawsuits coming out of other cities and counties against opioid manufacturers and distributors, and that “the general consensus is that [City Council] would rather get it right,” even if it means taking more time.

“I am not adverse to joining this litigation,” Pelaez said. “What I have been cautioning is that we need to have [our] eyes wide open walking into it.”

Councilman Manny Peláez (D8) gives his opinion on the Tobacco 21 proposal at B Session.

Bonnie Arbittier / Rivard Report

Councilman Manny Peláez (D8) speaks at a recent City Council meeting.

Across the U.S., states, counties, and municipalities are filing suits over the opioid epidemic, aiming to hold makers, wholesalers, distributors, and marketers accountable for their alleged role in the crisis that the U.S. Centers for Disease Control and Prevention reports took more than 42,000 American lives in 2016 alone.

The lawsuits have taken different approaches: Some accuse manufacturing companies of misleading healthcare professionals and the public via deceptive marketing tactics in an attempt to increase sales of opioids while failing to properly warn about the risks for addiction; some blame the wholesaler or distributor; and some suits even name the clinics that provided the pills.

While some suits have been settled, pharmaceutical companies and healthcare organizations continue to deny any claims of wrongdoing and say they are committed to helping solve the opioid epidemic.

In an email to the Rivard Report, John Parker, senior vice president of the Healthcare Distribution Alliance, a national organization representing primary pharmaceutical distributors involved in current lawsuits, said that pinpointing blame does not take into consideration how complex these cases are.

“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,” Parker said. “Those bringing lawsuits would be better served addressing the root causes, rather than trying to redirect blame through litigation.”

Parker noted that distributors are “logistics experts,” and do not manufacture, prescribe, dispense, or drive demand for opioids, and they cannot make medical determinations about patient care or provider prescribing. Distributors report every opioid order to the Drug Enforcement Agency, which is responsible for setting the annual production of controlled substances in the market.

“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.

Most cities that file or join lawsuits against opioid manufacturers do so by hiring outside counsel, as opposed to handling them through their staff attorneys, Hilliard said. He explained that the benefits of using outside litigation include access to lawyers who may have “more experience and more expertise in complex litigation,” and that city attorneys “are often already overworked and overtaxed.”

Pelaez said that “securing competent counsel” would be the City’s most important step if it decided to move forward with a lawsuit. This means working with a lawyer who has had success in mass tort litigation for municipalities against pharmaceutical manufacturers, he said.

Bexar County leads the state in babies born with drug withdrawal symptoms and has the third-highest per-capita rate of overdose deaths in Texas, with 108 fatal overdoses in 2015.

“We very much have real damages,” Pelaez said Saturday.

However, San Antonio and Bexar County have opioid prescribing rates that consistently rank below the state and national averages since 2006. And while Bexar County has the third-highest per capita rate of overdose in Texas, the state has remained among those with the lowest rates of overdose deaths, despite a “statistically significant increase” from 2015-16.

Hilliard said that “any potential settlement will be proportionate based on expert reports from economists [regarding] the impact of each affected area.”

The lawsuits bear many resemblances to the litigation against Big Tobacco, which ended with a $246 billion settlement in 1998, in what is still the largest civil litigation settlement in U.S. history, and resulted in policy change, Hilliard said. He noted that when comparing opioid and tobacco litigation, “there are more similarities than there are differences.”

“A difference might be the prescription nature of the drugs at issue,” Hilliard said. “But they’re marketing to doctors who then turn around and relay that information to their patients. It may be once-removed, but it is still happening.”

He said that pharmaceutical companies will argue that doctors have the knowledge and expertise to decide, based on their best medical opinion, that someone needs an opioid prescription, which does not account for the non-prescribed or illegally made opioids that are available on the streets.

A single lawsuit against an opioid manufacturer or distributor could take anywhere from two to six years, depending on whether a settlement occurs early in the process. Hilliard said that throughout Texas, lawsuits made by cities and counties will “likely get transferred into the opioid [multi-district litigation],” where large numbers of similar cases are consolidated to enhance efficiency and reduce cost.

This would cut the settlement time frame down, with decisions made within 16 months.

“If [San Antonio] doesn’t bring a claim at all, [it] won’t be entitled to the recovery that is likely to result,” Hilliard said.

One thought on “City Weighs Costs, Benefits of Going After Big Pharma

  1. Lawyers are counsel and the city governing body is a council . On expenses the city should agree to pay costs and expenses and let lawyers be compensated on a contingent basis.

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