By Suzanne Barlyn
(Reuters) – New York’s insurance regulator has formally notified a group of opioid manufacturers and distributors that it will launch a civil enforcement action against them for contributing towards a rise in health insurance premiums in the state, said two sources familiar with the matter.
The New York State Department of Financial Services (NYDFS) has sent letters to around 23 opioid manufacturers and distributors, notifying them that the regulator would begin the process to hold a hearing on the issue in an administrative proceeding, the sources said.
New York Governor Andrew Cuomo said in September the state would launch a legal action against drug companies and distributors that sell opioids in order to recoup about $2 billion in insurance rate increases that were passed on to New York consumers because of opioids.
Premiums surged because insurers had to cover prescription costs and opioid-related issues such as emergency room visits and addiction treatments, Cuomo had said.
Opioids were involved in almost 400,000 overdose deaths in the country https://www.cdc.gov/drugoverdose/epidemic/index.html between 1999 and 2017, according to the U.S. Centers for Disease Control and Prevention.
Opioid litigation https://www.reuters.com/article/uk-usa-opioids-litigation-overview-factb/factbox-billion-dollar-lawsuits-accuse-drugmakers-distributors-of-fuelling-u-s-opioid-crisis-idUKKBN1X016I is playing out across the United States, including some 2,600 lawsuits brought by states, towns, cities, counties and tribal governments over the opioid epidemic.
The two sources familiar with the NYDFS action declined to name the companies to which the letters were sent. Cuomo, on Sept. 10, published a list of entities the regulator had subpoenaed https://www.governor.ny.gov/news/governor-cuomo-announces-action-against-opioid-industry-recover-2-billion-overcharges-defrauded, including Purdue Pharma Inc, Johnson & Johnson, Teva Pharmaceuticals USA Inc, McKesson Corp, AmerisourceBergen Drug Corp and Janssen Pharmaceuticals Inc.
“Janssen acted as a responsible manufacturer and seller of its opioid pain medications, which play in an important role in the lives of patients with severe pain,” the company said.
Other companies mentioned above could not immediately be reached for comment.
A letter of intent to bring an enforcement action follows a determination by the regulator that there is sufficient evidence to bring the case, the sources said.
The entities will first have an opportunity to try to convince the regulator not to start the proceeding. The case would be heard by a hearing officer within the agency.
Funds that New York would collect from the suits would be returned to consumers, possibly in the form of rebates of lower insurance premiums, NYDFS Superintendent Linda Lacewell has said.
(Reporting by Suzanne Barlyn; Editing by Bernadette Baum)