Case 1:19-Cv-12117-PBS Document 1 Filed 10/11/19 Page 1 of 198
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Case 1:19-cv-12117-PBS Document 1 Filed 10/11/19 Page 1 of 198 UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS TOWN OF ANDOVER Plaintiff, v. TEVA PHARMACEUTICALS USA, INC.; Civil Action No.: TEVA PHARMACEUTICALS INDUSTRIES LTD.; CEPHALON, INC.; JOHNSON & JOHNSON; JANSSEN PHARMACEUTICALS, INC.; COMPLAINT ORTHO-MCNEIL-JANSSEN PHARMACEUTICALS, INC. n/k/a (Jury Trial Demanded) JANSSEN PHARMACEUTICALS, INC.; JANSSEN PHARMACEUTICA, INC. n/k/a JANSSEN PHARMACEUTICALS, INC.; NORAMCO, INC.; ENDO HEALTH SOLUTIONS INC.; ENDO PHARMACEUTICALS, INC.; CARDINAL HEALTH INC.; MALLINCKRODT LLC; MALLINCKRODT PLC; MALLINCKRODT BRAND PHARMACEUTICALS, INC.; SPECGX, LLC; MCKESSON CORPORATION; AMERISOURCEBERGEN DRUG CORPORATION; WALGREEN CO; WALGREENS EASTERN CO.; JONATHAN D. SACKLER; KATHE SACKLER; MORTIMER D.A. SACKLER; RICHARD SACKLER; DAVID SACKLER; THERESA SACKLER; ILENE SACKLER LEFCOURT; BEVERLY SACKLER, 1 Case 1:19-cv-12117-PBS Document 1 Filed 10/11/19 Page 2 of 198 ALLERGAN PLC F/K/A ACTAVIS PLC F/K/A ALLERGAN, INC.; ALLERGAN FINANCE, LLC, F/K/A/ ACTAVIS, INC., F/K/A WATSON PHARMACEUTICALS, INC.; ALLERGAN SALES, LLC; ALLERGAN USA, INC.; WATSON LABORATORIES, INC.; WARNER CHILCOTT COMPANY, LLC; ACTAVIS PHARMA, INC. F/K/A WATSON PHARMA, INC.; ACTAVIS SOUTH ATLANTIC LLC; ACTAVIS ELIZABETH LLC; ACTAVIS MID ATLANTIC LLC; ACTAVIS TOTOWA LLC; ACTAVIS LLC; ACTAVIS KADIAN LLC; ACTAVIS LABORATORIES UT, INC., F/K/A WATSON LABORATORIES, INC.-SALT LAKE CITY; ACTAVIS LABORATORIES FL, INC., F/K/A WATSON LABORATORIES, INC.-FLORIDA; AND JANE DOES 1 – 50, Defendants. 2 Case 1:19-cv-12117-PBS Document 1 Filed 10/11/19 Page 3 of 198 Table of Contents I. PRELIMINARY STATEMENT ............................................................................................. 5 II. PARTIES............................................................................................................................... 12 A. Plaintiff .............................................................................................................................. 12 B. Defendants........................................................................................................................... 12 III. JURISDICTION AND VENUE ........................................................................................ 29 A. Manufacturing Defendants Falsely Trivialized, Mischaracterized, And Failed To Disclose The Known, Serious Risk Of Addiction ................................................................................... 32 1. Manufacturing Defendants Minimized or Mischaracterized the Risk of Addiction...... 35 3. Marketing Defendants Falsely Suggested that the Risk of Addiction Could be Easily Identified and Managed......................................................................................................... 47 B. Manufacturing Defendants Overstated the Benefits of Chronic Opioid Therapy While Failing to Disclose the Lack of Evidence Supporting Long-Term Use .................................... 50 1. Mischaracterizing the benefits and evidence for long-term use..................................... 50 2. Overstating opioids’ effect on patients’ function and quality of life ............................. 55 3. Omitting or mischaracterizing adverse effects of opioids.............................................. 59 C. Manufacturing Defendants Continued to Tell Doctors that Opioids Could Be Taken in Ever Higher Doses Without Disclosing Their Greater Risks.................................................... 61 D. Purdue Misleadingly Promoted OxyContin as Supplying 12 Hours of Pain Relief When Purdue Knew That, For Many Patients, It did Not.................................................................... 63 E. Purdue and Endo Overstated the Efficacy of Abuse-Deterrent Opioid Formulations....... 66 1. Purdue’s deceptive marketing of reformulated OxyContin and Hysingla ER............... 67 2. Endo’s deceptive marketing of reformulated Opana ER ............................................... 70 F. Defendants Deliberately Disregarded Their Duties to Maintain Effective Controls and to Identify, Report and Terminate Suspicious Orders................................................................... 74 1. All Defendants Have a Duty to Report Suspicious Orders and Terminate those Orders Unless Due Diligence Disproves Their Suspicions............................................................... 74 2. Defendants Understood the Importance of Their Reporting Obligations ...................... 83 3. Despite Repeated Admonitions, Defendants Have Repeatedly Violated their Obligations............................................................................................................................. 92 G. Defendants Worked Together To Sustain Their Market and Boost Their Profits ........... 103 H. Defendants Ignored Red Flags Of Abuse and Diversion................................................. 109 I. Defendants Hid Their Lack Of Cooperation With Law Enforcement and Falsely Claimed To Be Actively Working To Prevent Diversion...................................................................... 112 1. The Sackler Defendants’ actions as members of the Board ............................................ 118 3 Case 1:19-cv-12117-PBS Document 1 Filed 10/11/19 Page 4 of 198 K. By Increasing Opioid Prescriptions and Use, Defendants Collectively Fueled The Opioid Epidemic And Significantly Harmed Andover and its Residents........................................... 130 L. Defendants Fraudulently Concealed Their Misconduct .................................................. 143 1. The Common Purpose and Scheme of the Opioid Marketing Enterprise.................... 145 2. The Conduct of the Opioid Marketing Enterprise violated Civil RICO ...................... 149 3. The Opioid Marketing Enterprise Defendants Controlled and Paid Front Groups and KOLs to Promote and Maximize Opioid Use ..................................................................... 153 4. Pattern of Racketeering Activity.................................................................................. 154 VI. CAUSES OF ACTION.................................................................................................... 167 VII. PRAYER FOR RELIEF .................................................................................................. 197 4 Case 1:19-cv-12117-PBS Document 1 Filed 10/11/19 Page 5 of 198 I. PRELIMINARY STATEMENT 1. Plaintiff the Town of Andover, Massachusetts (“the Town” or “Andover”), like many other jurisdictions across the country, is struggling with an opioid crisis. Unlike the crack cocaine and crystal methamphetamine epidemics that preceded it, this drug crisis began with a corporate business plan. It started with a decision by the owners and directors of Purdue Pharma L.P., Purdue Pharma, Inc., and the Purdue Frederick Co. (collectively, “Purdue”), to promote opioids deceptively and illegally in order to significantly increase sales and generate billions of dollars in revenue for themselves. Unfortunately, their deceptive strategies were quickly joined by Endo Pharmaceuticals Inc., Endo Health Solutions Inc., Johnson & Johnson, Janssen Pharmaceuticals, Inc. Ortho-McNeil-Janssen Pharmaceuticals, Inc. N/K/A Janssen Pharmaceuticals, Inc., Janssen Pharmaceutica, Inc. N/K/A Janssen Pharmaceuticals, Inc., Teva Pharmaceuticals USA, Inc., Cephalon, Inc., Teva Ltd., Mallinckrodt plc, SpecGX LLC, Mallinckrodt Brand Pharmaceuticals, Inc. Mallinckrodt LLC, Allergan plc f/k/a Actavis plc f/k/a Allergan, Inc.; Allergan Finance, LLC, f/k/a/ Actavis, Inc., f/k/a Watson Pharmaceuticals, Inc.; Allergan Sales, LLC; Allergan USA, Inc.; Watson Laboratories, Inc.; Warner Chilcott Company, LLC; Actavis Pharma, Inc., f/k/a/ Watson Pharma, Inc.; Actavis South Atlantic LLC; Actavis Elizabeth LLC; Actavis Mid Atlantic LLC; Actavis Totowa LLC; Actavis LLC; Actavis Kadian LLC; Actavis Laboratories UT, Inc. f/k/a Watson Laboratories, Inc.-Salt Lake City; Actavis Laboratories FL, Inc., f/k/a Watson Laboratories, Inc.-Florida; (collectively “Allergan”), (collectively with the Sackler Defendants “Manufacturing Defendants”), all of whom used misrepresentations regarding the risks and benefits of opioids to enable the widespread prescribing 5 Case 1:19-cv-12117-PBS Document 1 Filed 10/11/19 Page 6 of 198 of opioids for common, chronic pain conditions like low back pain, arthritis, and headaches.1 In addition, the Manufacturing Defendants, along with McKesson Corporation, AmerisourceBergen Drug Corporation, Cardinal Health, Inc., and Walgreen Co. failed to maintain effective controls, and to investigate, report, and take steps to terminate suspicious orders. As a direct consequence, the rampant use, overuse, and abuse of opioids has overwhelmed much of the country, including the Town of Andover. 2. Andover, Massachusetts brings this action to redress these Defendants’ campaign of unfairly, deceptively, and fraudulently marketing, promoting, and distributing opioids. 3. Manufacturing Defendants manufacture, market, and sell prescription opioid pain medications, including the brand-name drugs OxyContin, Butrans, Hysingla ER, Actiq, Fentora, Opana/Opana ER, Percodan, Percocet, Zydone, Kadian, Norco, Xartemis XR, Exalgo, Nucynta/Nucynta ER, and Duragesic, and generic drugs such as oxycodone. 4. Distributor Defendants McKesson Corporation d/b/a McKesson Drug Company, AmerisourceBergen Drug Corporation, Walgreens Co., and Cardinal Health, Inc. distribute opioid medications, including the medications