J&J found liable in Oklahoma opioid case and ordered to pay $572m


J&J’s lawyers fell short in the 6 weeklong case defending itself against the ‘kingpin’ claims by Oklahoma state. On Monday, last week, Judge Thad Balkman ruled that J&J created a public nuisance and ordered the company to pay $572m as part of an opioid abatement plan.

Previously, Terri White, Oklahoma Department of Mental Health and Substance Abuse Commissioner stated that the state’s opioid crisis would cost more than $17bn to clean-up and prosecutors wanted the judge to order J&J to pay that amount.

A J&J spokesperson has announced that the company plans to appeal the decision, but investors were pleased with the outcome as they saw the potential for a much larger outcome. With analysts reporting before the Monday verdict that they expected a value of more than $2bn and with the resulting news actually causing an increase of 4% in J&J shares. With J&J sales coming in to $81.6bn in 2018, it would take 2 days for J&J to cover the costs and that’s before they have appealed the value to undoubtedly a lower amount.

Depending on how you view the verdict it has definitely caused a stir. However both sides can agree upon the importance of the event as it is the first of its kind that a court has found a pharma company liable for the addiction and opioid epidemic.

However, J&J are still not out of the water as there is a multidistrict litigation occurring in Cleveland, Ohio where J&J and other defendants face thousands of lawsuits there in litigation that could generate a settlement in the tens of billions of dollars.

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