Pharmacies the winners in Del. judge's ruling on State's opioid case

By Gabriel Neves | Feb 28, 2019

WILMINGTON, Del. (Legal Newsline) -- Pharmacies that were sued by the state of Delaware over the opioid epidemic have obtained a positive result in court, as a judge there has granted their motion to dismiss.

Judge Mary Johnston, on the bench of the Delaware Superior Court, issued a 41-page ruling on Feb. 4, on the motions to dismiss the lawsuit filed by Purdue Pharma and Endo Health Solutions (pharmaceutical manufacturers); McKeeson Corporation, Cardinal Health Inc., AmerisourceBergen Corporation, Anda Pharmaceuticals Inc. and H.D. Smith LLC (distributors); and CVS Health Corporation and Walgreens Boots Alliance Inc. (pharmacies).

Judge Johnston allowed the claims against the manufacturers and distributors to move forward, but ended the case against the pharmacies.

"The court finds that the remaining allegations against pharmacies - breaches of duties to prevent diversion - are entirely speculative and conclusory. Additionally, Delaware's comprehensive pharmacy regulatory scheme and enforcement procedures, as well as federal regulations, preempt the claims alleged in the complaint," Johnston said in the ruling.

The State sued the pharmaceutical companies seeking damages and restitution regarding opioid medications, specifically in regards to the accurate disclosure of the risks associated to these medicines, especially the high risk of addition and misuse.

As stated in the ruling, "the state contends that manufacturers misrepresented those risks through multi-million-dollar advertising campaigns, and inaccurately claimed that those who were showing signs of addiction were not actually addicted," as well as Delaware also "argues that these misstatements were targeted for maximum effect and to a specific audience," and it "contends that manufacturers knew or should have known that their statements were false and misleading."

In regards to the distributors of the medication, the state affirmed per the ruling that "distributors have duties to actively prevent opioid diversion," as well as "as evidenced by prior regulatory actions against distributors for failing to prevent diversion, distributors violated their duties."

As to the pharmacies, the state alleges they failed to report suspicious orders made obvious by red flags like unusually large, repetitive or improperly filed orders. 

The state sought damages based on counts of consumer fraud, nuisance, negligence, and unjust enrichment.

A total of five motions to dismiss were filed before the court, with H.D. Smith not filing. The arguments for the motions were heard on Oct. 24, and Nov. 15.

In her ruling, Judge Johnston denied the motion filed by the manufacturers, stating that the state had a prima facie argument, and that "state's allegations of labeling inconsistent with FDA approvals are sufficient to survive dismissal on the grounds of federal preemption."

Regarding the distributor's motion, Johnston denied the motion, stating that "the state has set forth a prima facie case of reasonable foreseeability and proximate cause."

Pharmaceutical company Anda, which is part of Teva, filed a separate motion to dismiss, for which Johnston denied, stating that "the court finds that there is no meaningful or substantive distinction between Anda and other distributors at this stage of the proceedings," with the rulings applying "to Anda in the same manner as to distributors."

Delaware Superior Court Case number N18C-01-223

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