Insurance company faces fraud charges over opioid crisis

| Apr 27, 2020 | Fraud

The State of New York filed civil charges against opioid manufacturer Mallinckrodt Plc last Tuesday, April 21. The charges accuse the pharmaceutical giant of purposefully misrepresenting the safety of opioids.

Investigations into the nationwide opioid crisis have revealed widespread cases of fraud on behalf of drug makers. Charges filed by individuals and local governments all over the country claim these companies promote drugs like oxycodone as much safer than reality. This misinformation has led to a massive increase in the amount of unnecessary and dangerous opioid prescriptions over the past two decades.

A legal responsibility

These new charges come on the heels of a $1.6 billion agreement that Mallinckrodt paid to settle thousands of lawsuits from local and state governments. As part of this agreement, Mallinckrodt put one of their generic U.S. drug businesses into Chapter 11 bankruptcy.

These new charges claim the company violated two insurance laws in New York. Brought by New York’s Department of Financial Services (DFS), Governor Andrew Cuomo said these are the first charges the regulatory body has brought against a major opioid manufacturer. DFS claims Mallinckrodt overstated the benefits of long-term opioid treatment. By undermining the risks of addiction and abuse, the company allegedly knew this deceptive marketing would result in unnecessary prescriptions and fraudulent insurance claims, increasing profits at the expense of the American citizen’s health.

Mallinckrodt Plc is the largest manufacturer of generic opioids in the United States. From 2009 to 2019, the giant distributed over 1 billion pills to nearly 5 million New Yorkers. Each violation can carry up to $5,000 in civil penalties. According to the U.S. Centers for Disease Control and Prevention (CDC), opioids have contributed to over 400,000 deaths since 1997.

Consult with an attorney

Governor Cuomo estimates that opioids caused nearly $2 billion in insurance rates hikes for New Yorkers. The state’s DFS notified 23 additional pharmaceutical manufacturers and distributors they might also face civil charges, depending on the findings of their continuing investigation.

New Yorkers with questions about potential class-action suits against an opioid manufacturer can find answers with a local attorney familiar with insurance fraud.

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