New York City gets tough on major drugmakers amid opioid crisis

by 24 Jan, 2018

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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