Albany, NY (WorkersCompensation.com) – The New York State Department of Financial Services has filed charges against two pharmaceutical companies for their part in the opioid epidemic in that state, Gov. Andrew Cuomo said recently.
According to the DFS claim, Teva Pharmaceutical Industries, Ltd., and its subsidiaries – Teva Pharmaceuticals USA, Inc., Cephalon, Inc., Watson Laboratories, Inc., Actavis Pharma, Inc., Actavis, LLC and Actavis Elizabeth LLC; and Allergan PLC and its subsidiaries – Algergan PLC and Allergan Finance LLC, all engaged in a fraudulent marketing and promotional campaign which misrepresented the safety and efficacy of opioids which perpetuated the opioid epidemic and led to dramatic increases in insurance costs for the residents and businesses in the state of New York.
The companies are the third pair of pharmaceutical companies the state has gone after in DFS’s continuing investigation into the opioid crisis in that state.
“New York will continue to aggressively investigate the bad actors that caused the opioid crisis – an American tragedy that has taken too many lives and caused irrevocable harm to communities in our state and across the country,” Gov. Cuomo said. “Everyone who has been affected by opioids deserves justice and we will make every effort to deliver it to them by pursuing the companies that defraud the public and holding them accountable to the fullest extent of the law.”
According to DFS, Teva was a prolific manufacturer of opioids in the U.S. Making both its own branded opioids, as well as generic opioids, DFS estimated Teva manufactured 20 percent of the opioids that flowed into New York from 2006 to 2014. Allergan also manufactured opioids from 2006 to 2014.
In its court filing, DFS alleged that Teva and Allergan knowingly furthered false narratives that opioids were appropriate for a broad spectrum of pain and that the companies’ messaging downplayed the drugs’ addictive nature and risks. This fraudulent marketing, DFS alleged, throughout the opioid industry caused an increased acceptance of opioids as medically legitimate and appropriate treatment for pain by both healthcare professionals and their patients, which in turn led to the epidemic of addiction and abuse.
Among the charges were that Teva, through its subsidiary Cephalon, intentionally marketed its branded fentanyl drugs for off-label use. According to DFS, Cephalon’s Actiq was approved by the Federal Food and Drug Administration for use in treating cancer pain. Sales for the drug, DFS said, rose from $16 million in 2000 to more than $590 million in 2006, during which time only 8 percent of patients were taking the drug for cancer pain. The company continued to engage in the off-label promotions with its fentanyl lozenge, Fentora. To get doctors to prescribe it, DFS said, the company created template “letters of medical necessity” for sales reps to give to doctors that justified off-label use for insurance reimbursement.
DFS also said Allergan misrepresented its drugs in marketing materials, citing a 2010 letter from the FDA warning the company that it minimized the drug Kadian’s risk while making unsubstantiated claims of the drug’s superiority over other opioids.
And the department claimed both companies used third party “front groups” and doctors called “key opinion leaders” to market their message of safety and efficacy of opioids in general in books, education courses, websites and pamphlets. The messages downplayed the risk of addiction as “opiophobia” and dismissed patients’ signs of addiction as “pseudoaddiction.”
DFS charges that Teva and Allergan violated two New York Insurance laws prohibiting fraudulent insurance acts and intentional misrepresentation of material fact. According to court records, each prescription is a separate violation of each of these laws carrying with them penalties of up to $5,000 per violation per prescription.
A hearing on the charges is scheduled for Oct. 26, 2020.