Legal Roundup: Drug Price Fixing Under Scrutiny, Wildfire Victims Reach Settlement, Justice for Pooey Puitton and More

A look at recent court decisions and how their rulings have an impact on risk management and the insurance industry.
By: | May 20, 2019

44 States Suing Drug Makers Over Alleged Price Fixing

The Case: At least 44 states are suing drug makers in U.S. District Court for alleged price fixing.

NPR highlighted Connecticut Attorney General William Tong, who has the skin condition rosacea, which requires a once-per-day dose of an antibiotic called doxycycline.

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“In 2013, the average market price of doxycycline rose from $20 to $1,829 a year later. That’s an increase of over 8,000%,” said NPR.

NPR goes on to report that “in several examples, the suit cites call logs between executives at different companies, showing a flurry of phone calls right before several companies would all raise prices in lockstep.”

Scorecard: It’s too early to tell what will happen in this case, but the amount of states joining shows that authorities are taking the matter of price collusion seriously.

Takeaway: There’s a big appetite to bring drug prices down and stop price gouging.

States Continue Joining Lawsuit Against OxyContin Maker

The case: Six new states have filed lawsuits against Purdue Pharma, makers of OxyContin, claiming the sales and marketing techniques helped the opioid crisis grow. The states’ attorneys general accuse Purdue Pharma of hiding the harmful effects of the drug.

The Philadelphia Business Journal highlighted one of the most recent lawsuits, from Pennsylvania State Attorney General Josh Shapiro.

 

That suit accuses Purdue Pharma of tactics like “deceiving patients and doctors about the dangers of long-term opioid use, conducting deceptive marketing campaigns to mislead doctors and patients into prescribing and taking higher and more potent doses, and encouraging people to stay on opioids for longer and more harmful periods of time despite the known risks.”

Scorecard: That makes a total of 44 states suing the opioid maker. NBC News reports that more than 1,600 lawsuits have been filed against Purdue Pharma in recent years as the opioid crisis has ravaged the United States. Purdue Pharma denies the allegations.

Takeaway: Opioid deaths have killed 218,000 between 1997 and 2017 and states are going after opioid makers.

Nevada, Wildfire Victims Reach Tentative Settlement

The Case: Fire from a prescribed burn lost control and damaged 24 homes and 17 buildings in Nevada in 2016, leading to an $80 million negligence lawsuit.

A 2017 investigation found the fire was caused by setting the burn in a wind-prone area that wasn’t properly staffed, according to The Telegraph.

A Washoe County District Court jury found the state liable in August for the damage.

Scorecard: The state of Nevada reached a tentative agreement with the plaintiffs but the amount is undisclosed.

Takeaway: Fighting wildfires is hard work, especially in densely populated areas. Prescribed burns are a solid tactic but come with serious risks — like unexpected wind that pushes the new fire toward buildings and residences.

Pooey Puitton Case Against Louis Vuitton Dismissed (Yes, You Read That Right)

The Case: A brand called Pooey Puitton sued Louis Vuitton in what appeared to be a preemptive strike.

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Jezebel explains: “In December of last year, a toymaker named MGA Entertainment, which blessed the world with a very cute, slime-filled, and poop-shaped handbag named ‘Poopsie Pooey Puitton Slime Surprise Kit and Carrying Case,’ filed a lawsuit against the real Louis Vuitton, fearing that the French brand was waiting to drop a lawsuit on them over intellectual property rights.”

Meanwhile, Louis Vuitton argued that it never cared to make a fuss and said MGA was manufacturing the controversy. “Turns out, there is no evidence Pooey Puitton is in danger, and MGA Entertainment can keep selling its rainbow toys in peace,” said Jezebel.

Scorecard: A federal court in Los Angeles dismissed the case.

Takeaway: Sometimes imitation is the best form of flattery. But in instances where known brand imitation is happening, review the proper steps to use another company’s likeness. &

Jared Shelly is a journalist based in Philadelphia. He can be reached at [email protected]

Risk Matrix: Presented by Liberty Mutual Insurance

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The R&I Editorial Team can be reached at [email protected]