Johnson & Johnson Downplayed Opioid Drugs' Side Effects, New York Unveils Charges

New York Governor Andrew Cuomo on Thursday announced the state has filed civil charges against Johnson & Johnson JNJ, accusing it of insurance fraud in connection with understating the risks posed by opioid drugs to doctors and elderly patients. 

What Happened: The pharmaceutical giant and its three subsidiaries, including Janssen Pharmaceutical Inc, targeted elderly patients for treatment with opioid drugs by misleading them on the potential side effects they may suffer as a consequence, New York State Department of Financial Services, the state’s insurance regulator, said in a statement.

The pharmaceutical multinational allegedly made it appear — through paid advocacy groups, doctors, and professional associations — that opioids were not addictive, the DFS claimed.

“Misrepresentation of opioids to consumers for profit is inexcusable and we will use every tool necessary to help ensure those responsible are held fully accountable," said Cuomo.

The charges are related to Johnson & Johnson's opioid drugs made in the state, including tapentadol drug Nucynta and fentanyl patch Duragesic, according to DFS.

The U.S. Food and Drug Administration issued multiple warnings to the company about misrepresentations in marketing related to Duragesic.

The hearing will begin on Jan. 25 next year, wherein, it will be determined if the drugmaker violated two New York insurance laws, which carry penalties of up to $5000 for each violation. 

Why It Matters: DFS statement claimed Johnson & Johnson had a leading role in originating, supplying, facilitating, and actively creating a dangerous market for opioids for chronic pain treatment.

It is alleged that at one point the company, through its opioid supply chain and its patented “Norman Poppy,” controlled 80% of the worldwide supply of oxycodone raw materials.

Last year, an Oklahoma judge ordered the New York-based drug multinational to pay $572.1 million for fuelling the opioid crisis in the state.

The company’s subsidiary Janssen, named in the DFS statement, earlier this month concluded that its COVID-19 vaccine candidate prevented the disease in Syrian golden hamsters.

Price Action: Johnson & Johnson shares closed nearly 0.8% lower at $147.17 on Thursday.