Bedford County — Oxy abuse costs focus of class action suit

Civil lawsuit claims marketing campaign increased opioid sales, drug abuse

A class action lawsuit over the marketing of OxyContin has been moved from Bedford County to the U.S. District Court in Johnstown.

Bedford County is suing on behalf of Pennsylvania's 67 counties and more than 2,000 municipalities seeking redress for the thousands of drug overdoses and deaths caused by the oversupply of OxyContin.

The move came late last week when McKinsey & Co. of New York through its attorney, John J. Berry of Pittsburgh, sought the case's removal from the Bedford County Court due to the amount of money involved in the legal action and the fact that McKinsey is a New York City-based consulting company.

The notice of removal also suggests the case eventually will be transferred for trial, possibly to the Northern District of California.

McKinsey's attorney said he would have no comment concerning the litigation other than what is expressed on the public record.

Bedford County, through its commissioners, filed the case in late April, and McKinsey was served with a copy of the lawsuit on May 18.

McKinsey had 30 days to seek removal from the county, a step it took June 10, according to court records.

The civil lawsuit seeks damages based on many different counts, but all stemming from McKinsey's hiring by the Purdue Frederick Co., the parent corporation of Purdue Pharma LP, which distributed the pain medication, OxyContin.

The hiring came after Purdue was convicted in 2007 of the "misbranding of OxyContin," contending it was less addictive and less likely to cause withdrawal symptoms than other similar drugs.

According to the lawsuit, the use of the popular prescription drug led to "scores" of deaths.

As a result of the 2007 case, Purdue was to be monitored for five years and the company was to submit annual compliance reports concerning its marketing and sales practices.

That led Purdue to hire McKinsey, which was described in the lawsuit as a "global management consulting firm."

McKinsey, it is charged, designed a strategy to increase opioid sales by "hundreds of millions of dollars annually." Its marketing strategy was labeled "Project Turbocharge."

This national sales campaign eventually became known as Evole 2 Excellence or E2E.

So, while OxyContin sales decreased after the 2007 court proceedings, the lawsuit states, the McKinsey strategy brought the drug back to prominence with a flourish.

In 2018, Purdue decided to no longer market opioids and disbanded its OxyContin sales force.

The petition filed in the federal court concluded that McKinsey's marketing plan tripled sales of OxyContin.

The lawsuit pointed out that the result of the campaign was "a final spasm of OxyContin sales before the inevitable decline of the drug."

Pennsylvania suffered

That "spasm," as revealed in the lawsuit, had a dramatic impact on opioid abuse in Pennsylvania:

— In 2009 when the McKinsey campaign was first introduced, the opioid overdose death rate was 5.2 per 100,000 population. In subsequent years, the death due to opioid abuse tripled.

— By 2014, overdose deaths increased to 21.9 per 100,000. This was well above the national average, according to the lawsuit. In that year, 2,732 Pennsylvanins died due to opioid-related overdoses.

— The opioid death rate soared to 37.9 deaths per 100,000 as Project Turbocharge and E2E took hold in 2015 and 2016. In 2016, Pennsylvania experienced the fourth highest death rate among the states.

— The abuse of OxyContin eventually led to heroin abuse, and other problems -- with many newborns testing positive for prescription medication.

The lawsuit goes on to charge that McKinsey's "deceptive marketing strategies" have caused Bedford County and other class members, its residents, its businesses and communities to bear enormous social and economic costs including increased health care, criminal justice and lost work productivity, among others."

It charges McKinsey civilly with negligence, gross negligence, negligent misrepresentation, as public nuisance, fraud and deceit, civil conspiracy (McKinsey and Purdue allegedly violated Pennsylvania's Unfair Trade Practices and Consumer protection Law), and unjust enrichment.

The lawsuit seeks reimbursement from McKinsey for medical care expenses, costs for providing care to children of addicted parents, the increased costs of law enforcement and costs associated with drug courts.

The lawsuit asks damages for an "abatement fund" for other expenses associated with the opioid abuse crisis. It askes punitive damages as well.

McKinsey strategy

Two of the lawyers who filed the lawsuit, Philadelphia attorney Barry J. Scatton of the Morgan and Morgan Complex Litigation Group, and Dallas attorney Matthew Browne of Browne Pelican PLLC, are experienced in the field of opioid litigation, which is occurring throughout the country.

They have sought damages from manufacturers and distributors of opioids but only recently discovered the impact McKinsey's role as "consultant" had on the opioid problem.

Scatton, a native of Bedford County and a graduate of Bedford Area High School, became acquainted with Bedford County officials when they joined another opioid lawsuit, which is still pending.

The Bedford commissioners were willing to go ahead and file the present class action lawsuit on behalf of 67 counties in Pennsylvania and its 2,561 municipalities.

The federal court must still certify the group of counties and municipalities as a "class."

The lawsuit was signed by the chairman of the Bedford Board of Commissioners, Barry J. Dallara.

The lawsuit stated that Purdue hired McKinsey "to devise a sales and marketing strategy to increase opioid sales" despite the agreement Purdue had with the federal government to decrease opioid sales.

"In short, Purdue would pay money to McKinsey in exchange for McKinsey telling the company how to sell as much OxyContin as conceivably possible," the lawsuit stated.

From 2009 through 2014, Purdue relied on McKinsey to oversee its sales and marketing strategy, it is charged. The company was more than a consultant, but instead "insinuated" itself into all aspects of Purdue's business, according to the lawsuit. It estimated that Purdue could generate up to $400 million in additional revenue per year by following the McKinsey strategy.

McKinsey advised Purdue to address the "emotional messages from mothers with teenagers that overdosed on OxyContin." They did this by marketing OxyContin as a drug that can provide "freedom" and "peace of mind," thereby reducing stress and isolation.

McKinsey had the company sales force focus on physicians who tended to prescribe OxyContin "to specifically target prescribers with a marketing blitz to encourage even further prescribing."

The consultant suggested Purdue strengthen its prescription strength per-pill. Purdue implemented McKinsey's suggestion through adoption of a marketing slogan to "Individualize the Dose."

By following McKinsey's advice, OxyContin sales eventually increased from a billion dollars to $3 billion dollars annually, according to the lawsuit.

Damages sought to help communities

Scatton and Browne said their lawsuit did not request a specific amount of damages.

Browne said it was too difficult to estimate damages in view of the toll opioid abuse has taken across the country.

The lawsuit is seeking money to help counties like Bedford provide drug treatment, improve social services, provide treatment facilities and improve law enforcement, Browne said.

Another uncertainty at the moment is where the case will be tried.

Scatton pointed out there are multiple cases presently being filed against McKinsey, and the federal courts normally try to consolidate the cases for trial purposes. Many opioid cases have been consolidated for trial in Cleveland, but he noted that, at the moment, the McKinsey cases are being transferred to San Francisco in the Northern District of California.

Many opioid cases were ready for trial last year but the pandemic "provided a huge punch in the gut" to the opioid litigation, Scatton said.

He clarified, however, he is willing to go anywhere in the country to try the case against McKinsey.

Attempts to obtain comment from Bedford County Commissioner Dallara, or from Pennsylvania's Attorney General were unsuccessful.