Law and Regulations

Chicago hits pharmaceutical companies with lawsuit

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Chicago filed a lawsuit against five major producers of pharmaceutical products on Tuesday, accusing the group of concealing the risks associated with certain painkillers and seeking to recover nearly $10 million in prescription costs.

Alleging that drugmakers "should never place its desire for profits above the health and well-being of its customers," the city said that the companies knew for years that certain pain-alleviating drugs were addictive and could prove debilitating in the long-term.

The five companies named in the suit include Actavis, Endo Health Solutions, Janssen Pharmaceuticals —a unit of Johnson & Johnson, Purdue Pharma and Cephalon, a division of generic drug giant Teva.

The lengthy suit, filed in a Cook County circuit court, alleges that the cohort of companies misused their dominance to broaden the market for "opium-like painkillers" called opioids. These prescription drugs included top-shelf brand names such as OxyContin and Percocet, as well as a clutch of generics.

The drug makers "spent millions of dollars funding, assisting and encouraging doctors and front groups" to promote the drugs and broaden their reach among users afflicted with chronic pain, Chicago says. The city seeks to recover at least some of the $9.5 million it paid to fill 400,000 prescriptions for these drugs since 2008, as well as compensatory damages, penalties and legal costs.

The effort to flood the market was "wildly successful. The United States is now awash in opioids," the suit said, citing data showing that more than 250 million prescriptions for the narcotic were filled in 2010 and generating more than $8 billion in revenue during that year. According to figures, the U.S. represents 80 percent of the global opioid market and 99 percent of the world's hydrocodone supply, the city contends.

The suit contends that the drugs have ramped up addiction that has become a scourge in Chicago and other major cities.

Robyn Frenze, a spokesperson for Janssen, said in a statement e-mailed to CNBC that the company "is committed to ethical business practices and responsible promotion, prescribing and use of all our medications. We're currently reviewing the complaint."

Representatives for Actavis and Cephalon said the company does not comment on pending litigation. Representatives for Endo and Purdue were not immediately available to respond to requests from CNBC.