ATTORNEY GENERAL HERRING CONTINUES TO HOLD PHARMACEUTICAL COMPANIES, OTHERS ACCOUNTABLE FOR THEIR ROLE IN THE OPIOID CRISIS

~ Herring has taken action against numerous entities for the roles they played in creating and prolonging the opioid crisis that has taken thousands of lives in Virginia ~

RICHMOND (March 1, 2020) – During National Consumer Protection Week, Attorney General Mark R. Herring is highlighting the work that he and his team have done to hold pharmaceutical manufacturers and distributors accountable for their role in creating and prolonging the opioid crisis in Virginia and around the country. Attorney General Herring has filed suit against Purdue Pharma; the Sackler Family, owners of Purdue Pharma; and Teva/Cephalon for the roles that they played in creating the opioid epidemic. Additionally, Attorney General Herring reached a $1.6 billion global settlement with Mallinckrodt that came as part of a multistate investigation into opioid manufacturers and distributors. Most recently, Attorney General Herring secured nearly $14 million as Virginia's share of a multistate settlement reached with McKinsey & Company, resolving investigations into the company's role in working for opioid companies, helping those companies promote their drugs, and profiting from the opioid epidemic.

Attorney General Herring also introduced legislation this year, that passed both the House and the Senate, that directs funds secured through Attorney General Herring's ongoing lawsuits against drug manufacturers and distributors toward opioid abuse prevention, treatment, and recovery, ensuring that the most money possible goes to actually address the opioid crisis. If enacted into law, this proposal would make Virginia one of the first states in the nation to have a legislatively enacted framework for directing funds from opioid litigation towards opioid abatement, treatment, and recovery, instead of diverting it to other uses.

"Families and communities across the Commonwealth continue to feel the devastating effects of the opioid crisis. These drug manufacturers and distributors continuously chose to put profits over human lives, creating and prolonging the deadly opioid epidemic,” said Attorney General Herring. "No amount of money can ever bring back those we have lost or take back the pain and suffering too many families in Virginia have felt because of this epidemic, but these companies must pay for the devastation they have caused. I will not stop until every pharmaceutical company, marketing agency, or other entity involved has been held accountable for their role in the opioid crisis, hopefully bringing some justice to the families who have lost so much because of opioids.”

The heroin and prescription opioid epidemic has been a top priority for Attorney General Herring. He and his team continue to attack the problem with a multifaceted approach that includes enforcement, education, prevention, and legislation to encourage reporting of overdoses in progress, expand the availability of naloxone, and expand access to the Prescription Monitoring Program. He has supported federal efforts to improve the availability of treatment and recovery resources and made prescription drug disposal kits available across the Commonwealth.

For nearly three and a half years, Attorney General Herring has been part of a bipartisan, multistate effort to investigate and hold opioid manufacturers and distributors accountable for their role in the opioid crisis.

Additionally, in November 2015, Attorney General Herring released Heroin: The Hardest Hit, a powerful documentary about the danger of heroin and prescription drugs and their impact on Virginia families and communities. The documentary, which was produced by the Office of Attorney General, features Virginians telling their own stories of addiction, overdose and recovery, and it features powerful testimony from parents who lost their children to an overdose, as well as law enforcement and healthcare professionals working to address the problem. The movie, which was made available free of charge to schools, faith organizations, law enforcement, public health organizations, and others, was part of Attorney General Herring's efforts to educate Virginians on these dangerous drugs and prevent abuse and addiction.

In January, Attorney General Herring, along with a bipartisan coalition of 48 attorneys general, urged the FDA to examine recent progress in their fight against opioid abuse. Attorney General Herring and his colleagues asked for a progress report regarding recent steps taken by the U.S. Food and Drug Administration (FDA) to combat the opioid crisis, given the new authorities Congress granted the agency in 2018. In their letter to FDA Commissioner Stephen Hahn, the attorneys general contended the requested information will help reduce prescription opioid abuse and accidental deaths.

Lawsuit against Purdue Pharma

In June 2018, Attorney General Herring filed suit against Purdue Pharma accusing it of profiting from an opioid crisis that it helped create and prolong through a decades-long campaign of lies and misrepresentations. Attorney General Herring alleges in the lawsuit that Purdue made false claims about the purported safety, efficacy, and benefits of its opioids, including OxyContin, pumped tens of millions of pills and patches into Virginia, and reported billions in profits.

Attorney General Herring's suit alleges that Virginia's opioid crisis "is the direct and foreseeable result of a decades-long, complex, large-scale campaign of misrepresentations and deception.” At the heart of Purdue's unlawful scheme were lies that its opioids were safe, carried a low risk of addiction, and were more effective than other pain relievers. Purdue knew that all of these claims were false, yet it engaged in an elaborate scheme to push the lies through aggressive sales tactics, marketing, and seemingly independent patient advocacy organizations.

Additionally, in September 2018, Attorney General Herring released the unredacted complaint in his Purdue lawsuit that shed light on the sheer volume of prescription opioids the company pushed into Virginia. Between 2008 and 2017, Purdue pushed nearly 150 million opioid pills and patches into Virginia through their rigorous marketing and sales programs, filling nearly 2.2 million opioid prescriptions.

Lawsuit against the Sackler Family, owners of Purdue Pharma

Attorney General Herring filed suit against members of the Sackler Family, owners of Purdue Pharma, for their role in creating and perpetuating the opioid crisis, and for fraudulently taking billions of dollars from Purdue Pharma in an attempt to put money beyond the reach of the Virginia and other parties who may be entitled to damages.

In September 2019, Attorney General Herring filed an amended complaint as part of his ongoing lawsuit against Purdue Pharma that specifically named Richard, Jonathan, Kathe, and Mortimer Sackler as defendants. The suit stated that, despite the fact that "the Sacklers were unquestionably on notice as to the risks associated with opioids and the prior problems with Purdue's opioid sales and marketing practices,” the family nevertheless "oversaw, directed, and were informed in great detail about Purdue's opioid sales and marketing, with Richard Sackler taking a particularly active and aggressive role in directing, controlling, and participating in those functions and activities.”

Attorney General Herring also added a new claim of "fraudulent conveyance” against the company and Richard, Jonathan, Kathe, and Mortimer Sackler. The complaint stated that between 2008 and 2018, the Sackler family transferred at least $4 billion from Purdue to themselves. The complaint also stated that "in authorizing these transfers, the Sacklers sought to drain Purdue of cash and to place these funds beyond the reach of Purdue's creditors and claimants to whom Purdue faced liabilities due to its deceptive and misleading opioid sales and marketing practices.” The complaint further stated that "the Sacklers authorized these transfers with fraudulent intent, for no consideration, and for the purpose of rendering the funds inaccessible to the Commonwealth and other parties with valid claims against Purdue.”

Lawsuit against Fentanyl Manufacturer Teva/Cephalon

In October 2019, Attorney General Herring filed suit against opioid manufacturer Teva Pharmaceuticals, USA, Inc. and its predecessor Cephalon, Inc. for engaging in what he alleged was an unlawful, complex, decades-long campaign to boost sales of fentanyl – the most potent narcotic currently approved for human use—by marketing its rapid acting fentanyl drugs for unapproved and unsafe uses, and by knowingly and intentionally downplaying the risks of its drugs while overselling the benefits. Attorney General Herring's suit alleged that for twenty years Teva/Cephalon successfully but illegally used marketing and promotional efforts to transform these powerful, potentially dangerous fentanyl drugs into commonly prescribed drugs for non-cancer patients, helping to fuel the deadly opioid crisis and harming patients, families, and communities in Virginia and around the country. The lawsuit also contained previously unrevealed information that shows Teva/Cephalon engaged in a decades-long cover-up to hide and misrepresent clinical trial data so the company could overstate the benefits and effectiveness of the drugs while downplaying the dangers of abuse and misuse.

Last year, Attorney General Herring released the unredacted complaint in the Teva/Cephalon lawsuit that further revealed the extent to which Teva/Cephalon lied about the uses and risks of their fentanyl drugs to boost sales. The unredacted complaint showed how the companies took opioids the FDA had only approved for treating cancer patients' pain and aggressively marketed them for a wide variety of prohibited off-label uses and encouraged non-cancer treating doctors, a third of whom were primary care physicians, to misprescribe these powerful drugs; disclosed the FDA's previously unknown stern warnings about the drugs, which the companies subsequently ignored; and showed how the companies manipulated clinical trial data to hide what they knew about their drugs' addiction and overdose risks and how they exaggerated the drugs' overall efficacy and benefits.

$1.6 Billion Global Settlement with Mallinckrodt

In October 2020, Attorney General Herring reached an updated global settlement framework agreement with opioid manufacturer Mallinckrodt (MNK), its subsidiaries, and certain other affiliates. Under the new settlement, MNK will pay $1.6 billion into a trust that will cover the costs of opioid addiction treatment and related efforts. MNK is currently the largest generic opioid manufacturer in the United States. Attorney General Herring announced the initial settlement back in February 2020.

Under the terms of the settlement, MNK will pay $1.6 billion of cash into a trust that will go toward abating the opioid crisis, including valid claims related to MNK's role in the opioid crisis raised by non-governmental claimants. MNK will pay the $1.6 billion according to the following schedule:

• $450 million upon emergence from bankruptcy
• $200 million annually on first and second anniversary of emergence from bankruptcy
• $150 million annually on third through seventh anniversaries of emergence from bankruptcy

MNK also agreed that its opioid business will be subject to stringent injunctive relief that, among other things, will prevent marketing and ensure systems are in place to prevent drug misuse.

This payment schedule improved the February 2020 deal by moving $150 million from the last payment to the first. Since that initial February settlement, MNK has taken on additional liability due to other legal issues and the impact of COVID-19. As a result, MNK put the entire company into bankruptcy, which required that the initial February agreement be renegotiated.

McKinsey & Company Settlement

Last month, Attorney General Mark R. Herring joined a bipartisan coalition of attorneys general from 47 states, the District of Columbia, and five U.S. territories in securing a $573 million settlement with one of the world's largest consulting firms, McKinsey & Company, resolving investigations into the company's role in working for opioid companies, helping those companies promote their drugs, and profiting from the opioid epidemic. Virginia will receive $13,681,773.38 as its share of the multistate settlement.

In addition to providing funds to address the crisis, the agreement calls for McKinsey to prepare tens of thousands of its internal documents detailing its work for Purdue Pharma and other opioid companies for public disclosure online. McKinsey also agreed to adopt a strict document retention plan, continue its investigation into allegations that two of its partners tried to destroy documents in response to investigations of Purdue Pharma, implement a strict ethics code that all partners must agree to each year, and stop advising companies on potentially dangerous Schedule II and III narcotics.

Virginia Opioid Statistics

Sadly, because of the COVID-19 pandemic, Virginia and the rest of the country have seen a rise in opioid overdoses and deaths. Between January and June 2020, at least 1,086 Virginians died from an overdose of either fentanyl, heroin, cocaine, prescription opioids or other drugs. Virginia saw a sharp rise in deaths between April and June of this year, shortly after the COVID-related restrictions began, with at least 634 drug fatalities during that three-month period – a 67 percent increase from the corresponding period in 2019.

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