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New York City gets tough on major drugmakers amid opioid crisis

by | 24 Jan, 2018

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American authorities are fighting back against a health crisis gripping the nation and investors in health care stocks should be watching

New York City has sued 8 major pharmaceutical companies which manufacture prescription painkillers in a bid to address the major opioid crisis facing both New York and the U.S. as a whole.

Mayor Bill de Blasio said the lawsuit sought $500 million in damages to help fight the opioid problem, which is responsible for more deaths on an annual basis than homicides and car accidents combined in America.

The Mayor said: “Big Pharma helped to fuel this epidemic by deceptively pedalling these dangerous drugs and hooking millions of Americans in exchange for profit,” adding, “It’s time to hold the companies accountable for what they’ve done to our city, and help save more lives.”

Firms targeted by the lawsuit include Allergan, Cardinal Health, Johnson & Johnson, McKesson and Teva Pharmaceutical.

More than 30 states in the U.S. have already become embroiled in legal action against drugmakers since last year, with many experts stating that drug companies deliberately downplay the risks of their products in order to appeal to consumers. Many people in the U.S. end up on harder opioids like heroin after starting on prescription drugs.

Donald Trump has been vocal about the issue throughout his Presidency and signed an Executive Order on March 29 last year establishing the ‘President’s Commission on Combating Drug Addiction and the Opioid Crisis’, declaring the opioid crisis as a public health emergency 7 months later.

For investors in pharmaceutical stocks, the issue is something to keep a close eye on. In March last year, even the mention of a Senate committee probe into the biggest opioid manufacturers sent shares in those companies plunging.

Related: Trump hails “Big win” for Republicans as U.S. shutdown ends – but for how long?

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The benchmark S&P500 healthcare index slides on the same day New York prepares major fines for drug companies

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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