Case 3:18-cv-00558-CRS Document 1 Filed 08/17/18 Page 1 of 299 PageID #: 1 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF KENTUCKY LOUISVILLE DIVISION BAPTIST HEALTHCARE SYSTEM, INC. d/b/a BAPTIST HEALTH CORBIN, BAPTIST HEALTH LA GRANGE, BAPTIST HEALTH LEXINGTON, COMPLAINT BAPTIST HEALTH LOUISVILLE, BAPTIST HEALTH PADUCAH, and CASE NO. _______________________3:18-cv-558-CHB BAPTIST HEALTH FLOYD; and JURY TRIAL DEMANDED BAPTIST HEALTH MADISONVILLE, INC. d/b/a BAPTIST HEALTH MADISONVILLE; This Action Relates to: Case No. 1:17-MD-2804 and Hon. Dan A. Polster BAPTIST HEALTH RICHMOND, INC. d/b/a BAPTIST HEALTH RICHMOND; Under: and Organized Crime Control Act of 1970, IX, BOWLING GREEN WARREN COUNTY Racketeer Influenced and Corrupt COMMUNITY HOSPITAL Organizations Act, P.L. No. 91-452, 84 CORPORATION d/b/a THE MEDICAL State. 922 (1970), (codified at 18 U.S.C. §§ CENTER AT BOWLING GREEN, THE 1961-1967 (2012) (“RICO”) MEDICAL CENTER AT CAVERNA, AND THE MEDICAL CENTER AT Breach of Implied Warranty of Fitness for SCOTTSVILLE; a Particular Purpose, KRS 355.2-315 and Kentucky Consumer Protection Act, KRS 367.170 THE MEDICAL CENTER AT CLINTON Negligence COUNTY, INC. d/b/a THE MEDICAL CENTER AT ALBANY Wanton Negligence and Negligence Per Se THE MEDICAL CENTER AT Negligent Marketing FRANKLIN, INC. d/b/a THE MEDICAL CENTER AT FRANKLIN Negligent Distribution Plaintiffs, Nuisance v. Unjust Enrichment AMERISOURCEBERGEN DRUG CORPORATION; Case 3:18-cv-00558-CRS Document 1 Filed 08/17/18 Page 2 of 299 PageID #: 2 CARDINAL HEALTH, INC.; MCKESSON CORPORATION; PURDUE PHARMA L.P.; PURDUE PHARMA, INC.; THE PURDUE FREDERICK COMPANY, INC.; TEVA PHARMACEUTICAL INDUSTRIES, LTD.; TEVA PHARMACEUTICALS USA, INC.; CEPHALON, INC.; JOHNSON & JOHNSON; JANSSEN PHARMACEUTICALS, INC.; ORTHO-MCNEIL-JANSSEN PHARMACEUTICALS, INC. n/k/a JANSSEN PHARMACEUTICALS, INC.; JANSSEN PHARMACEUTICAL INC. n/k/a JANSSEN PHARMACEUTICALS, INC.; NORAMCO, INC.; ENDO HEALTH SOLUTIONS INC.; ENDO PHARMACEUTICALS, INC.; INSYS THERAPEUTICS, INC.; ALLERGAN PLC f/k/a ACTAVIS PLS; WATSON PHARMACEUTICALS, INC. n/k/a ACTAVIS, INC.; WATSON LABORATORIES, INC.; ACTAVIS LLC; ACTAVIS PHARMA, INC. f/k/a WATSON PHARMA, INC.; MALLINCKRODT PLC; MALLINCKRODT LLC; CVS HEALTH CORPORATION; WALGREENS BOOTS ALLIANCE, INC.; WAL-MART, INC.; and MIAMI-LUKEN, INC. Defendants. Case 3:18-cv-00558-CRS Document 1 Filed 08/17/18 Page 3 of 299 PageID #: 3 TABLE OF CONTENTS I. INTRODUCTION .............................................................................................................. 2 A. The Opioid Crisis .......................................................................................................... 2 B. Impact of Opioids on Kentucky Hospitals .................................................................. 13 C. Financial Impact of Defendants’ Activities on Plaintiffs ........................................... 19 D. The Roles of Defendants in Causing and Perpetuating the Opioid Crisis .................. 22 II. JURISDICTION AND VENUE ....................................................................................... 25 III. PARTIES .......................................................................................................................... 25 A. PlaintiffS ..................................................................................................................... 25 B. Defendants .................................................................................................................. 27 1. Marketing Defendants ........................................................................................... 27 a. Purdue and Associated Companies .................................................................. 27 b. Cephalon and Associated Companies .............................................................. 28 c. Janssen and Associated Companies ................................................................. 30 d. Endo and Associated Companies ..................................................................... 32 e. Insys Therapeutics, Inc. .................................................................................... 34 f. Mallinckrodt Entities ........................................................................................ 34 g. Actavis and Associated Companies ................................................................. 37 2. Distributor Defendants .......................................................................................... 38 a. AmerisourceBergen Drug Corporation ............................................................ 38 b. Cardinal ............................................................................................................ 39 c. McKesson Corporation ..................................................................................... 39 d. Miami-Luken, Inc. ............................................................................................ 41 3. National Retail Pharmacies ................................................................................... 41 a. CVS Health Corporation .................................................................................. 41 b. Walgreens Boots Alliance, Inc. ........................................................................ 41 c. Wal-Mart Inc. ................................................................................................... 41 C. Defendants’ Agents ..................................................................................................... 42 IV. CONTINUING VIOLATIONS ......................................................................................... 42 V. FACTUAL BACKGROUND ........................................................................................... 42 A. The History of Opioids ............................................................................................... 42 B. The Opioid Epidemic .................................................................................................. 45 C. Legislative Responses to Opioid Crisis ...................................................................... 48 i Case 3:18-cv-00558-CRS Document 1 Filed 08/17/18 Page 4 of 299 PageID #: 4 D. The Marketing Defendants’ False, Deceptive, and Unfair Marketing of Opioids...... 49 E. Each Marketing Defendant Used Multiple Avenues To Disseminate Their False and Deceptive Statements About Opioids. ........................................................ 51 1. Direct Marketing ................................................................................................... 52 a. Falsehood #1: The risk of addiction from chronic opioid therapy is low ........ 53 i. Purdue’s misrepresentations regarding addiction risk ................................. 54 ii Endo’s misrepresentations regarding addiction risk .................................... 60 ii Janssen’s misrepresentations regarding addiction risk ................................ 61 iv Cephalon’s misrepresentations regarding addiction risk ............................. 62 v. Mallinckrodt’s misrepresentations regarding addiction risk........................ 63 b. Falsehood #2: To the extent there is a risk of addiction, it can be easily identified and managed .................................................................................... 65 c. Falsehood #3: Signs of addictive behavior are “pseudoaddiction,” requiring more opioids ..................................................................................... 67 d. Falsehood #4: Opioid withdrawal can be avoided by tapering ........................ 70 e. Falsehood #5: Opioid doses can be increased without limit or greater risks .................................................................................................................. 71 f. Falsehood #6: Long-term opioid use improves functioning ............................ 73 g. Falsehood #7: Alternative forms of pain relief pose greater risks than opioids .............................................................................................................. 79 h. Falsehood #8: OxyContin provides twelve hours of pain relief ....................... 82 i. Falsehood #9: New formulations of certain opioids successfully deter abuse ................................................................................................................. 87 i. Purdue’s deceptive marketing of reformulated OxyContin and Hysingla ER ................................................................................................. 88 ii. Endo’s deceptive marketing of reformulated Opana ER ............................. 91 iii. Other Marketing Defendants’ misrepresentations regarding abuse deterrence ..................................................................................................... 95 2. The Marketing Defendants Disseminated Their Misleading Messages About Opioids Through Multiple Channels ......................................................... 97 3. The Marketing Defendants Directed Front Groups To Deceptively Promote Opioid Use ............................................................................................................ 97 a. American Pain Foundation ............................................................................... 99 b. American Academy of Pain Medicine and the American Pain Society ......... 102 c. Federation of State Medical Boards ............................................................... 105 d. The Alliance for Patient Access ....................................................................