Insurance Coverage For Opioid Litigation And Investigations

To date, hundreds of lawsuits have been filed, and the solution to the problem includes a variety of liability insurance policies sold to the various entities in the supply chain for legal prescription opioid pain medicine. The issue of opioid insurance coverage has certainly gotten the attention of insurance company lawyers. As is typical in these kinds of situations, the insurance industry is lawyered up to fight against paying opioid claims. Based on our experience representing policyholders in the opioid crisis, many of the arguments raised by insurers are invalid, and many of the claim denials issued by insurers are improper. A synopsis of the opioid crisis in general, and arguments for defeating insurer denials of coverage are addressed below.

1. The Explosion of Investigations and Lawsuits Against Those in The Supply Chain of Legal Prescription Opioid Pain Medicine

   Public concern over the alarming level of opioid abuse and the staggering number of opioid-related overdose deaths has driven increased legal and regulatory action at many levels. Most of the tens of thousands of opioid deaths directly result from illegal street drugs, not prescribed opioid pain relievers. Prescribed medicines — developed to relieve pain and suffering and approved and regulated by the government — according to some, are now being alleged to have contributed to the crisis of addiction and death. And, as with prior public health crises (asbestos, tobacco), where there is suffering and death, plaintiffs' lawyers will follow. See " The Opioid Crisis Has Plaintiff Lawyers Smelling Cash," (Wall Street Journal, January 3, 2018), (subscriptions required); " Lawyers Circle America's Opioid Crisis," (Financial Times, August 3, 2017).

   A cadre of private lawyers is now teaming up with state, county, municipal and tribal governments to investigate and file lawsuits against pharmaceutical manufacturers, wholesale distributors, retail pharmacy chains and others in the supply chain of opioid pain medicine regarding their actions in connection with the marketing, sale and distribution of opioid pain medications. More specifically:

   Pharmaceutical manufacturing companies have been sued in state courts by many state Attorneys General, and in state or federal court by scores of city, county and local government agencies and Native American tribes. These lawsuits typically allege a variety of claims related to marketing and sales practices, including false advertising, unfair competition, public nuisance, consumer fraud, deceptive acts and practices, negligence, false claims and unjust enrichment. The suits generally seek equitable and/or injunctive relief and monetary damages. Wholesale distributors and retail chains have also been sued alleging that they failed to provide effective controls and procedures to guard against the diversion of opioid pain medicine, acted negligently by distributing pain medicine to pharmacies that served individuals who abuse controlled substances, and failed to report suspicious orders of opioid pain medicine in accordance with regulations. Additionally, a coalition of states has issued requests for documents and information regarding the distribution of prescription opioid pain medications. Health insurers have sued manufacturers and others, seeking to recover damages allegedly sustained as a result...