Cuomo planning lawsuit against drug industry

Sep 11, 2019

Calling it an "industrywide conspiracy," Gov. Andrew Cuomo announced a lawsuit for the overprescription of opioids that he said has defrauded New Yorkers out of billions of dollars.


Cuomo said his Department of Financial Services is gathering evidence for a lawsuit that he said extends beyond the drugmakers to the drug distributors and pharmacies for what the governor said is systemwide "fraud" that went on for decades.

He said it cost New York consumers an estimated $2 billion. He said the costs of the overuse of the opioids was passed on to insurance premium holders in the form of rate increases.

"Which means health insurance companies were paying these prescriptions," Cuomo said. "They were then paying for the refill of the prescription. They were then paying for the emergency room when the person overdosed. They were then paying for the treatment facility when the person went into treatment. All those costs, those health insurance costs, get paid ultimately by who? By you."

The governor said major pharmaceutical companies like Purdue Pharma, which manufactured the popular opioid OxyContin, have gotten away with it for decades. He said it's cost thousands of human lives and billions of dollars.

"It's highly addictive, which they knew," Cuomo said. "And you killed people."

Department of Financial Services Superintendent Linda Lacewell said her office is pursuing fines of up to $5,000 per fraudulent claim from the insurance companies that they regulate.

She said her investigation is also focusing on the pharmacy benefit managers, or PBMs. They are third-party administrators, or the "middlemen," between opioid manufacturers and insurers. The PBMs set the formularies for prescription drug coverage provided by insurance policies. They also negotiate rebates and credits paid by manufacturers and distributors. 

Lacewell said her department has received information that some PBMs may have been paid rebates by opioid drug manufacturers, wholesalers or distributors. In exchange, they pushed the drug to patients by placing it on a list of drugs with lower co-pays. Lacewell said in some cases, that could be a violation of federal and state health insurance regulations.  

"There are many manufacturers and distributors and PBMs that we have already subpoenaed," Lacewell said.  

The Department of Financial Services will also hold statewide hearings. 

Lacewell could not give a date for the filing of the lawsuit, but said they have already collected enough evidence through their investigatory work to pursue court action.  

State Attorney General Tish James is also suing Purdue, as well as Johnson & Johnson and McKesson Corp., saying they created the opioid epidemic that has "ravaged New York, causing widespread addiction, overdose deaths and suffering," something the companies deny.