The “war on drugs” is nothing new. In the past, however, that war has been fought on the streets against illegal drugs. Now, the state of Ohio is taking that fight to the courtroom — against big pharma. Ohio’s attorney general is suing five drug makers, saying they fueled an opioid crisis in Ohio — a state particularly hard hit by addiction — by misrepresenting the risks associated with the prescription medications. If Ohio wins, what kind of damage can the pharmaceutical industry expect?
Should Big Pharma be Worried?
It’s been all sunshine and rainbows for the pharmaceutical industry since Donald Trump defeated Hillary Clinton in the presidential election last November. Where Secretary Clinton promised to crack down on Big Pharma, Donald Trump proposed a more laissez-faire attitude towards drug makers, promising fewer regulations for the industry. With Clinton out of the way, Big Pharma was expecting a smooth four years. Now, however, Ohio is doing its part to stand up to legal drugs — and the illegal road down which they lead.
So why isn’t Big Pharma worried?
Quite simply, nothing has changed for these companies.
Ohio’s attorney general, Mike DeWine, a Republican, states that the companies targeted general practitioners with no specialty in pain management, and misrepresented the risks and dangers of prescribing opioids to patients. Mr. DeWine claims the drug companies are responsible for these patients then pursuing illegal avenues once they no longer had access to their prescriptions, including heroin. DeWine says drug companies knowingly pushed opioids on these doctors in pursuit of higher sales, and should be held accountable.
The companies are all big names:
Purdue Pharma LP
Endo Health Solution
Of the five, only Allergan PLC is a publicly traded company, and shares of Allergan (AGN) are actually UP on the day. The companies may face big fines, as they’ve paid in the past, with the largest fine being $634 million, paid by an affiliate of Purdue Pharma in 2007 over misleading the public about the dangers of OxyContin. For Big Pharma, that’s a drop in the bucket. As Purdue Pharma produced $31 billion in revenue that same year.
Watch the news clip from RT America regarding the lawsuit of the Cherokee natioagainstts Big Pharma:
The fact is, industry change won’t happen at the state level. And with Trump wanting to deregulate the industry, drug makers are safe from any serious regulations harming their bottom line. Traders have nothing to worry about from Ohio’s lawsuit, or its consequences.
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