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NORMAN, Okla. (Reuters) – An Oklahoma judge on Monday found Johnson & Johnson (JNJ.N) liable for fueling an opioid epidemic in the state by deceptively marketing addictive painkillers, and ordered the drugmaker to pay $572.1 million.
The award was well below what some investors and analysts feared, in what had been a $17 billion lawsuit viewed as a bellwether for other litigation nationwide over the opioid epidemic.
“The expectation was this was going to be a $1.5 billion to $2 billion fine,” said Jared Holz, healthcare strategist for Jefferies. “$572 million is a much lower number than had been feared.”
J&J shares rose 5% in extended trading following the decision. Shares of other drugmakers that sell opioid pain treatments, including Teva Pharmaceutical Industries Ltd (TEVA.TA) and Endo International Plc (ENDP.O), also rose after-hours.
Still, J&J said it would appeal, and seek to put payment of the award on hold during the appeal process.
“Janssen did not cause the opioid crisis in Oklahoma, and neither the facts nor the law support this outcome,” Michael Ullmann, J&J’s general counsel, said in a statement.
The decision by Judge Thad Balkman of Cleveland County District Court in Norman, Oklahoma, followed a seven-week, non-jury trial.
The case brought by Oklahoma Attorney General Mike Hunter was the first to go to trial out of thousands of lawsuits filed by state and local governments against opioid manufacturers and distributors.
Oklahoma alleged that J&J’s marketing practices helped fuel the opioid epidemic by flooding the market with painkillers.
“Johnson & Johnson will finally be held accountable for thousands of deaths and addictions caused by their actions,” Hunter said.
Oklahoma sued J&J to help it address the epidemic for the next 30 years through addiction treatment and prevention programs.
“The opioid crisis is an imminent danger and menace to Oklahomans,” Balkman said.
But in his written decision, the judge said the figure he awarded covered only one year, saying Oklahoma did not offer enough evidence of the time and costs to address the opioid crisis beyond that.
The trial came after Oklahoma had resolved claims against OxyContin maker Purdue Pharma LP in March for $270 million and against Teva in May for $85 million, leaving J&J as the lone defendant.
The litigation has been closely watched by plaintiffs in about 2,000 opioid lawsuits pending before a federal judge in Ohio who has been pushing for a settlement ahead of an October trial.
Some plaintiffs’ lawyers have compared the opioid cases to litigation by states against the tobacco industry that led to a $246 billion settlement in 1998.
Opioids were involved in almost 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. Since 2000, some 6,000 Oklahomans have died from opioid overdoses, according to the state’s lawyers.
During the trial, lawyers for Oklahoma argued that J&J carried out a years-long marketing campaign that minimized the painkillers’ addiction risks and promoted their benefits.
The state’s lawyers called J&J an opioid “kingpin” and argued that its marketing efforts created a public nuisance as doctors over-prescribed the drugs, leading to a surge in overdose deaths in Oklahoma.
J&J has denied wrongdoing, saying its marketing claims had scientific support and that its painkillers, Duragesic and Nucynta, accounted for a tiny fraction of opioids prescribed in Oklahoma.
The company also said in a statement that since 2008, its painkillers accounted for less than 1 percent of the U.S. market, including generics.
Lawyers for New Jersey-based J&J have said the case rested on a “radical” interpretation of the state’s public nuisance law.
Ullmann, the J&J general counsel, in his statement faulted Oklahoma for attempting a “misapplication of public nuisance law” that judges in other states had already rejected.
J&J said it remains “open to viable options” to resolve the case scheduled for trial in October, including through settlement.
Reporting by Nate Raymond in Boston; Additional reporting by Julie Steenhuysen in Chicago; Editing by Noeleen Walder and Bill Berkrot
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