Product Liability

The opioid MDL is not a product defect liability case in the traditional sense, in part because opioids continue to be prescribed for clinical use, in some cases featuring the exact same formulations and packaging as the products alleged to have contributed to the current crisis. Likewise, medical societies initially supported the use of opioids, and throughout the crisis maintained the ability to either caution their constituents on opioid utilization or recommend the removal of opioids from the market. Another reason that prescription opioids are not considered defective is because they were explicitly approved by regulators ex ante, in the exact same formulations found in past and current supplies. Instead, the opioid MDL fits into the broader product liability realm of failure to warn, combined with some opportunistic behavior on the part of some parties in efforts to exploit information asymmetries existing in all levels of the supply chain. Opioids flowed through a supply chain and healthcare system featuring a rapidly growing reliance on pharmaceutical-based treatment and influenced by the classic institutional features of any healthcare markets, including information asymmetries, uncertainty, and moral hazard. It is also important that the opioid MDL, at least during the apex of the bellwether cases in recent years, was based on public nuisance theory, which does not require strict liability and implies that liable parties can share responsibility among each other and, in some cases, with plaintiffs. Moreover, the opioid crisis is an unusual product liability application in that it has played out in one of the most heavily regulated industries in the U.S., under the watchful eye of not just one government regulator but three. This is in addition to the six primary members of the opioid supply chain, the supply chain is overseen by three federal regulators (FDA, DEA, and CDC) and another three independent entities (state medical boards, accreditation agencies, and payers/PBMs) employing a variety of mechanisms and controls. In the absence of some form of explicit or implicit consent and cooperation from all 12 of these groups of entities, not a single opioid would be able to reach the U.S. market or stay on the market.