1 Geoffrey D. Strommer (AK Bar # 0911044) Dawn E. Winalski (AK Bar # 1311107) 2 Edmund Clay Goodman (pro hac vice admission pending) Hobbs, Straus, Dean & Walker, LLP 3 516 SE Morrison Street, Suite 1200 4 Portland, OR 97214 Phone: (503) 242­1745 5 Fax: (503) 242­1072 Email: [email protected] 6 Email: [email protected] 7 Email: [email protected] 8 Attorneys for SouthEast Alaska Regional Health Consortium 9 10 11 UNITED STATES DISTRICT COURT 12 DISTRICT OF ALASKA 13 14 SOUTHEAST ALASKA REGIONAL Case No.: 3:18-cv-00217-TMB HEALTH CONSORTIUM, 15 COMPLAINT 16 Plaintiff, JURY TRIAL DEMANDED 17 vs. 18 PURDUE PHARMA L.P.; PURDUE 19 PHARMA INC.; THE PURDUE FREDERICK COMPANY; RHODES 20 PHARMACEUTICALS, L.P.; RHODES TECHNOLOGIES, INC.; CEPHALON, 21 INC.; TEVA PHARMACEUTICAL 22 INDUSTRIES, LTD.; TEVA PHARMACEUTICALS USA, INC; 23 JANSSEN PHARMACEUTICALS, INC.; ORTHO­MCNEIL­JANSSEN 24 PHARMACEUTICALS, INC. N/K/A 25 JANSSEN PHARMACEUTICALS, INC.; JANSSEN PHARMACEUTICA, INC. 26 N/K/A JANSSEN PHARMACEUTICALS, INC.; NORAMCO, INC.; ENDO HEALTH 27 SOLUTIONS INC.; ENDO COMPLAINT Case 3:18-cv-00217-TMB Document 1 Filed 09/20/18 Page 1 of 163 1 PHARMACEUTICALS INC.; ENDO INTERNATIONAL PLC; PAR 2 PHARMACEUTICAL, INC.; PAR PHARMACEUTICALS COMPANIES, 3 INC. F/K/A PAR PHARMACEUTICAL 4 HOLDINGS, INC.; ALLERGAN PLC F/K/A ACTAVIS PLC; ALLERGAN 5 FINANCE LLC, F/K/A ACTAVIS, INC., F/K/A WATSON PHARMACEUTICALS, 6 INC.; WATSON LABORATORIES, INC.; 7 ACTAVIS LLC; ACTAVIS PHARMA, INC. F/K/A WATSON PHARMA, INC.; 8 INSYS THERAPEUTICS, INC.; MALLINCKRODT PLC; 9 MALLINCKRODT, LLC; SPECGX LLC; 10 ABBOTT LABORATORIES; ABBOTT LABORATORIES, INC; AMNEAL 11 PHARMACEUTICALS, INC F/K/A AMNEAL PHARMACEUTICALS, LLC; 12 KVK­TECH, INC.; MCKESSON CORP.; 13 CARDINAL HEALTH, INC.; CARDINAL HEALTH 110, LLC; 14 AMERISOURCEBERGEN CORP.; ANDA, INC.; ANDA PHARMACEUTICALS, 15 INC.; HENRY SCHEIN, INC.; HENRY 16 SCHEIN MEDICAL SYSTEMS, INC.; and JOHN & JANE DOES 1­100 INCLUSIVE, 17 Defendants. 18 19 20 21 22 23 24 25 26 27 COMPLAINT Case 3:18-cv-00217-TMB Document 1 Filed 09/20/18 Page 2 of 163 1 TABLE OF CONTENTS 2 I. INTRODUCTION ...................................................................................................................1 3 II. THE PARTIES .......................................................................................................................5 4 A. The Plaintiff .....................................................................................................................5 5 B. Manufacturer Defendants .................................................................................................8 6 7 C. Distributor Defendants ......................................................................................................16 8 D. John and Jane Does 1-100, inclusive ................................................................................20 9 III. JURISDICTION AND VENUE ...........................................................................................20 10 IV. ADDITIONAL FACTUAL ALLEGATIONS .....................................................................21 11 A. Background ......................................................................................................................21 12 13 B. The Manufacturer Defendants engaged in false, deceptive, and unfair marketing of opioids in order to create, and profit from, an 14 inflated opioid market ......................................................................................................23 15 1. The Manufacturer Defendants’ used various types of Marketing 16 Activities to disseminate false and misleading statements ........................................27 17 a. Direct Marketing ...................................................................................................27 18 b. “Detailing” and speaker programs ........................................................................28 19 c. Unbranded advertising disseminated by seemingly independent third 20 parties ...................................................................................................................31 21 2. The Manufacturer Defendants’ false and misleading statements understated 22 the dangers of opioid drugs ........................................................................................44 23 3. The Manufacturer Defendants’ false and misleading statements overstated the benefits of chronic opioid therapy ......................................................60 24 25 4. The Manufacturer Defendants knew that their representations were false and misleading, and fraudulently concealed their conduct to 26 avoid detection ...........................................................................................................68 27 COMPLAINT - i Case 3:18-cv-00217-TMB Document 1 Filed 09/20/18 Page 3 of 163 1 5. Defendant Insys went beyond false and misleading marketing to bribe physicians and lie to insurers to obtain preauthorization 2 for reimbursement ......................................................................................................71 3 C. All Defendants assisted in the creation of a nationwide, illicit 4 market for opioids by failing to uphold their legal duties to prevent unlawful diversion ..............................................................................................73 5 1. The Distributor Defendants’ failure to prevent diversion ...........................................75 6 7 2. The Manufacturer Defendants’ failure to prevent diversion .......................................82 8 3. The Defendants’ actions in inflating and flooding the market with prescription opioids, and in failing to prevent diversion, foreseeably led to the flow of such drugs 9 between jurisdictions .................................................................................................87 10 D. Defendants’ unlawful conduct and breaches of legal duties caused harm and substantial 11 damages to the Plaintiff ...................................................................................................89 12 E. The statutes of limitations are tolled and Defendants are estopped from asserting statutes 13 of limitations as defenses .................................................................................................98 14 1. Continuing Conduct ....................................................................................................98 15 2. Equitable Estoppel and Fraudulent Concealment .......................................................98 16 F. Facts Pertaining to Claims Under RICO ..........................................................................102 17 1. The Opioid Marketing Enterprise .....................................................................................102 18 19 a. The Common Purpose and Scheme of the Opioid Marketing Enterprise ...................................................................................................................102 20 b. The Conduct of the Opioid Marking Enterprise .........................................................106 21 22 c. The Pattern of Racketeering Activity ..........................................................................111 23 2. The Opioid Supply Chain Enterprise ................................................................................115 24 a. The Common Purpose and Scheme of the Opioid Supply Chain 25 Enterprise ...................................................................................................................115 26 b. The Conduct of the Opioid Supply Chain Enterprise .................................................117 27 COMPLAINT ­ ii Case 3:18-cv-00217-TMB Document 1 Filed 09/20/18 Page 4 of 163 1 c. The Pattern of Racketeering Activity ..........................................................................118 2 3. Effects of the Opioid Marketing Enterprise and the Opioid Supply Chain Enterprise...............................................................................................................122 3 4 V. CAUSES OF ACTION ..........................................................................................................122 5 COUNT 1: VIOLATION OF RICO ......................................................................................123 6 COUNT 2: VIOLATION OF RICO ......................................................................................131 7 COUNT 3: PUBLIC NUISANCE .........................................................................................138 8 COUNT 4: NEGLIGENCE AND GROSS NEGLIGENCE .................................................140 9 10 COUNT 5: NEGLIGENCE PER SE .....................................................................................142 11 COUNT 6: UNJUST ENRICHMENT...................................................................................143 12 COUNT 7: CIVIL CONSPIRACY ........................................................................................145 13 COUNT 8: FRAUD AND NEGLIGENT MISREPRESENTATION ...................................146 14 COUNT 9: VIOLATIONS OF THE ALASKA UNFAIR TRADE 15 PRACTICES AND CONSUMER PROTECTION ACT AS 45.50.471, 16 et seq. ...............................................................................................................................151 17 COUNT 10: STRICT PRODUCTS LIABILITY DESIGN DEFECT AND FAILURE TO WARN ...........................................................................154 18 19 PRAYER FOR RELIEF ..............................................................................................................156