New York City, NY (WorkersCompensation.com) – New York Gov. Andrew Cuomo announced his administration’s Department of Financial Services has filed charges of insurance fraud and financial services fraud against Johnson & Johnson for what he says is its part in that state’s opioid crisis.
DFS filed charges and started administrative procedures against the company Thursday, alleging that the company misrepresented the addictiveness of its product, Duragesic, a fentanyl patch, and Nucynta, a tapentadol drug. Additionally, DFS said in court documents, Johnson & Johnson controlled a large portion of the raw opioid supply chain through its patented “,Nrman Poppy”, which, the agency said, was at one point responsible for up to 80 percent of the global supply for oxycodone raw materials.
“The opioid crisis has taken too many lives and New York State will continue to take action against those who helped fuel this public health catastrophe and bring a measure of justice to families who have lost loved ones,” Cuomo said in a statement. “Misrepresentation of opioids to consumers for profit is inexcusable and we will use every tool necessary to help ensure those responsible are held fully accountable.”
In its statement of charges, DFS alleged that Johnson & Johnson misrepresented the risks of opioids in its marketing, which specifically targeted the elderly. Additionally, the agency said, the company misrepresented opioid addiction as “pseudoaddiction,” which could be cured through the use of more opioids. The agency also alleged that the company ignored warnings from the U.S. Food and Drug Administration that they were misrepresenting the drug in their marketing material when they claimed it was less addictive than other opioids.
The agency said the company was in violation of two New York statues – one covering insurance fraud and the other covering financial services fraud. The agency also contends that each prescription for an opioid constitutes a single charge of insurance fraud and a single charge of financial services fraud – punishable by a fine of up to $5,000 for each charge.
Cuomo’s DFS previously levied similar charges against three other companies.
In August DFS charged 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; as well as Allergan PLC and its subsidiary Allergan Finance LLC. In June, DFS charged Endo International plc and its subsidiaries, Endo Health Solutions Inc., Endo Pharmaceuticals, Inc., and Par Pharmaceutical Companies.
The charges stem from DFS’s ongoing investigation into the opioid crisis. Announced in September 2019, the department said it has determined that New York consumers have overpaid on insurance premiums for the past 10 years as a result of the costs associated with opioid manufacturers misrepresenting how safe and efficient opioids are, which resulted in over-prescription of opioids, additional addiction treatment and the treatment of other health effects associated with opioid addiction.
“I’ve seen a number of schemes and frauds, but the opioid scheme is as diabolical, as brazen, as obnoxious and as offensive as anything I’ve seen,” Cuomo said when he announced the investigation. “These drug companies knew what they were doing. It was not accidental – it was an industry-wide conspiracy. The damage they have caused has been immeasurable – it has cost thousands of human lives and billions of dollars, and they have gotten away with it for decades. These drug companies are not going to get away with murder, and we are taking a series of actions to ensure that they don’t.”