What You Don’t Know About the Opioid Epidemic

Case study: Unpacking the history and causes of a deadly scourge

April 06, 2022

| by Stanford GSB Staff

This case study provides an overview of the history and causes of the U.S. opioid epidemic. It is intended for use in classes on business ethics or related topics.

The case begins with a history of pain management, followed by a description of the stages and scale of the epidemic. The case then presents contributing causes of the epidemic: misleading marketing by drug companies, kickback schemes, irresponsible physicians and distributors, lobbying, and societal expectations about eliminating pain.

It raises ethical questions such as: If a drug company can make a lot of money by selling large quantities of opioids (and get away with it), should it do so, knowing that this will contribute to addiction and deaths of patients? And is it acceptable for companies to lobby against regulation of practices that may be harmful to patients?

Podcases: Case Studies, Reimagined

A “podcase” is a teaching tool: an audio version of a traditional case study, designed to provide an alternate learning method for students. It includes audio enhancements, such as sound effects, intended to illuminate the material.

Full Transcript

Donald Trump: This epidemic is a national health emergency. Unlike many of us, we’ve seen and what we’ve seen in our lifetimes, nobody has seen anything like what’s going on now. As Americans, we cannot allow this to continue.

Jenny Luna: In October of 2017, President Trump stood in the White House, flanked by families who had lost loved ones to opioid addiction, and declared that the opioid epidemic in the United States had become a public health emergency. He called it the worst drug crisis in United States history.

Donald Trump: It is time to liberate our communities from this scourge. We can be the generation that ends the opioid epidemic. We can do it. [Applause]

Jenny Luna: Hi, there. I’m Jenny Luna, a multimedia producer at Stanford Graduate School of Business.

Kelsey Doyle: And I’m Kelsey Doyle, also a producer here at the GSB, and you’re listening to “The Opioid Epidemic.” We’ve taken a case by political economy professor Ken Shotts and case writer Sheila Melvin and turned it into a podcase. That’s right, you heard me correctly — a podcase.

Jenny Luna: Yeah, this podcase is designed for use in classes on business ethics or corporations in society to discuss the social responsibility of business. Questions may arise for you, like, if a drug company can make a lot of money by selling large quantities of opioids and get away with it, should it do so, even knowing it will contribute to addiction and deaths of patients? And is it acceptable for companies to lobby against regulation or practices that may be harmful to patients?

Kelsey Doyle: To dig deeper into these questions, Jenny and I will start off with a history of opium and pain management, then discuss the current epidemic stages and the major players in creating the epidemic. We’ll discuss misleading marketing by drug companies, kickback schemes, irresponsible physicians and distributors, lobbying, and societal expectations about eliminating pain — all possible causes of the epidemic.

Jenny Luna: We’re excited to take you through this auditory experience one fact at a time. You can find a link to the written case study on our website,

Kelsey Doyle: According to the CDC, opioid medications are, quote, “generally safe when taken for a short time and as prescribed by a doctor,” but because they produce euphoria in addition to pain relief, can easily be misused. In the 1990s, the prescribed short-term use of opioids became particularly prevalent in the United States. In the early 2000s, Americans were consuming 80% of the world’s opioids, even though the U.S. makes up less than 5% of the world’s population. And in 2015, approximately 92 million adults used a prescription opioid. That’s nearly 40% of the population.

Jenny Luna: And with all that use came addiction and lots of overdoses. Here’s a way to try to understand the scale of the opioid overdose deaths in the past two decades. Think about 100,000 Americans living in the year 1999. If each of their lives is a raindrop, they may sound like this: [sound of rain]. So imagine each year lasts one second and listen to the death toll increase. In each day of 1999, this many people out of that group would die of an opioid overdose [sound of slow, heavy raindrops]. By 2007, this many were dying, more than 6 out of every 100,000 [sound of faster heavy raindrops].

By 2017, the daily death toll had climbed and climbed to 15½ people per 100,000 [sound of very fast heavy raindrops]. Across the entire country in 2017, this was the sound of the people who died every day from an opioid overdose [sound of very, very fast heavy raindrops]. And that number continues to rise.

Kelsey Doyle: Hold on. Before we get too deep into the stats, you might be wondering what exactly is opium.

Jenny Luna: Good point, Kelsey. Want to give us the basics?

Kelsey Doyle: OK, sure. So, opium is sap derived from the opium poppy. And why it’s become so important is that its largest active constituent, about 10% of its raw weight, is morphine. But there are two terms you may have heard and wondered about — opiates and opioids. Here’s the difference. Opiates are drugs derived directly from the opium poppy, while opioids are synthetic drugs that act like opiates. But these days when we use the term opioids, we can mean several things — natural opiates, synthesized drugs that act like opiates, or combinations of the two.

Jenny Luna: All right. I think I got it. I’ll try to keep that straight. Now next question — what makes opioids so addictive?

Kelsey Doyle: Right. That’s a good question. That’s because opioids bind to receptors in the brain and spinal cord, causing them to release endorphins — you know, those feel-good transmitters that muffle pain, enhance pleasure, and create a powerful but temporary sense of well-being. Over time, a person can build up a tolerance and need higher doses for the same effect.

Jenny Luna: There’s some deep, deep history here. Opium has actually been used for thousands of years to treat pain, shortness of breath, coughs, and diarrhea, and was also used for its tranquilizing effect. Opium was cultivated by ancient Sumerians and traded in Egypt and is thought to have made an appearance in Homer’s Odyssey, when Helen cast a drug into the wine to “lull all pain and anger and bring forgetfulness of every sorrow.”

Kelsey Doyle: More recently, opium was widely used in the 19th century in China, India, Persia, Turkey, Europe, and the United States. The importation of opium into China by British traders in violation of Chinese laws is what led to the Opium Wars of the mid-1800s.

Jenny Luna: In the U.S., there was actually another opioid epidemic way back before the current one, in the mid-1800s.

Kelsey Doyle: Really. Was it basically like this one?

Jenny Luna: Well, I guess there are some similarities, but not exactly. For a while, opium sort of became a catchall prescribed drug for pretty much any type of pain or discomfort. It was heavily used by soldiers for pain relief during the Civil War. Plus, a new invention called the hypodermic needle made it easy to inject morphine. Doctors were prescribing lots of opium to women for menstrual cramps and morning sickness, so much so that, by the late 1800s, 60% of opium addicts in the U.S. were middle- or upper-class white women.

Kelsey Doyle: Wow. That is pretty different.

Jenny Luna: Yeah. But because of numerous reasons, by the early 20th century, opium use was on the decline. Doctors had gained a better understanding of how to prevent and treat disease, and education campaigns encouraged doctors not to overprescribe opium. At the same time, Chinese immigration to the U.S. rose, and some of those new arrivals brought the practice of smoking opium with them. But anti-Chinese sentiment led to further stigmatization of opium use. Laws were also passed in the early 1900s making it harder, really almost impossible to prescribe opium and criminalizing non-medical opiates.

Kelsey Doyle: Right. And those laws were passed with the goal of reducing addiction. But they also led to cruel suffering for generations of patients, according to the former editor-in-chief of the New England Journal of Medicine, who wrote:

Male Voice: “Even in hospitals where cancer patients lay dying in agony, opioids were administered reluctantly in small doses and at infrequent intervals. Desperate patients would count the minutes toward the end of the interval, hoping they could flag down a nurse. Many doctors and nurses interpreted the anxiety and clock-watching as a sign of growing addiction, not inadequate pain relief. These patients were labeled ‘drug-seeking’ and often punished for it by being denied the very help they needed.”

Jenny Luna: In the late 20th century, attitudes toward pain management began to transform. This change was spurred by the hospice movement, which gained traction in the United Kingdom in the 1970s and spread from there. In 1986, the World Health Organization published a cancer pain monograph. It addressed the under-treatment of postoperative pain and cancer pain. Then, in 1990, Scientific American published a piece that questioned why opiates were reserved for cancer pain and not also used to treat chronic pain.

Kelsey Doyle: That very same year, the president of the American Pain Society published an editorial criticizing the medical community’s failure to improve pain assessment and treatment. This is where things get interesting. He claimed that therapeutic use of opiate analgesics rarely results in addiction. Now this claim was based on a letter written by one doctor to the editor of the New England Journal of Medicine. The letter, which was a mere five sentences, simply stated that their records found that out of 12,000 patients prescribed opioids, only four developed an addiction. This single letter went on to be cited more than 600 times to support the use of opioids to treat chronic pain and was used to make the claim that less than 1% of opioid patients become addicted.

Many years later, Dr. Mitchell Max, who wrote that infamous letter, told reporters, “I’m essentially mortified that that letter to the editor was used as an excuse to do what those drug companies did.”

Jenny Luna: It’s likely if you visited a doctor due to pain, you’ve been asked, how would you rate your pain on a scale of 1 to 10? Well, that question wasn’t always part of the standard protocol. In 1995, the American Pain Society launched a campaign that sought to have pain treated as the fifth vital sign, meaning that there would be a standardized evaluation and treatment of pain, just as there is for blood pressure. This call was taken up by Congress, which called the aughts the decade of pain control and research.

In 2001, the Joint Commission, a nonprofit that accredits hospitals and healthcare facilities, published strict standards for pain management. The organization emphasized that pain needs to be regularly assessed in all patients, that pain is a subjective measure unlike heart rate or blood pressure, and that physicians must accept and respect patients’ self-reporting of pain.

Kelsey Doyle: Changing attitudes toward pain management and less stringent regulatory pressure led to an increase in opioid prescriptions. The book A Brief History of the Opioid Epidemic and Strategies for Pain Medicine describes what happened next.

Male Voice: “The fear among hospital administration was that if new Joint Commission benchmarks were not met, then they were unlikely to receive federal healthcare funds. Indeed, hospitals that invested more readily in opioid therapy generally received better satisfaction rates among their patient population. Pharmaceutical companies heavily pushed the use of opioids as a humane treatment option, often using paid physician consultants to expound on the safety and benefits of opioids use. Not prescribing opioids for a patient with pain risked being labeled as inhumane, often even to the extent of litigation for the under-treatment of pain.”

Jenny Luna: Doctors who had traditionally prescribed opioids to address acute pain — cancer, for example — began using them to treat chronic pain, like from a work-related injury. This happened even though there was little evidence that opioids were effective for improving chronic pain, while it was well established that they could cause overdoses and other adverse outcomes.

Kelsey Doyle: Right. And this increase in use of prescription opioids coincided with the development of new opioid pain relievers, notably OxyContin, which was approved by the FDA in 1995. OxyContin’s original label stated, “Delayed absorption is believed to reduce the abuse liability of a drug.” This same claim was also used to persuade physicians of its efficacy and allegedly nonaddictive nature for many years in hopes of getting doctors to prescribe OxyContin.

Jenny Luna: That pretty much brings us up to date. Now let’s talk about the current crisis. The CDC divided the U.S. opioid epidemic into three phases, and this makes it easier for us to break it down.

Kelsey Doyle: The first phase was from 1999 to 2010. That’s when an increase in opioid prescriptions led to an uptick in prescription overdoses. A major component of this rise came from people taking oral opioids in unintended ways, like smoking, snorting, and injecting the drug. This made the drugs enter the bloodstream faster and act more quickly, thereby heightening the risk of overdose.

Jenny Luna: The second phase was from 2010 to 2013 and featured an increase in deaths of heroin users. I’ll explain that correlation here. According to one study, 80% of heroin users started off on prescription opioids, leading experts to state that the public health effects of prescription opioids and heroin are intertwined. Heroin use in the United States, according to the CDC, had been increasing in recent years among men and women, most age groups, and across all income levels. Some of the greatest increases occurred in demographic groups with historically low rates of heroin use — women, the privately insured, and people with higher incomes.

The strongest risk factor for heroin use during this time was past misuse of prescription opioids. Even though heroin was illegal, it was often easier to buy and cheaper than illegally obtained prescription drugs.

Kelsey Doyle: Again, imagine a group of 100,000 Americans in 2010 [sound of heavy rain falling], and one second represents one year. Out of that group. 6.8 people would die of opioid overdoses that same year [sound of heavy raindrops]. By 2014, 9 people would die [sound of faster heavy raindrops]. In just four years, that was an increase of almost a third.

Jenny Luna: And 80% of those additional deaths resulted from a reformulation of OxyContin done at the request of the FDA, which ironically was supposed to be a new abuse-deterrent formula that made it much more difficult to misuse by crushing, snorting, or injecting.

Kelsey Doyle: What happened in the third phase, Jenny?

Jenny Luna: So in the third phase of the opioid epidemic from 2013 onward, overdose deaths from synthetic opioids increased. Kelsey, you may have heard of fentanyl in the news.

Kelsey Doyle: Oh, definitely. I know it’s traditionally used to treat patients with advanced cancer and that it’s 50 to 100 times more potent than morphine.

Jenny Luna: Another important detail is that when you compare it to heroin, fentanyl is about one-tenth of the price.

Kelsey Doyle: Oh, wow. No wonder it’s so popular.

Jenny Luna: Fentanyl is sold in powder, liquid, and tablet form and often mixed with heroin or cocaine. In 2017, it was involved in 57% of all drug overdose deaths in New York City. A decade earlier, that number was only 2%. The mainstream media coverage of the deaths of musicians Prince and Tom Petty due to fentanyl brought even more attention to the drug.

Kelsey Doyle: Oh, I remember that.

Female Voice: “Prince’s autopsy report is brief, just a page long. His death is checked off in a box as an accident, the cause listed as fentanyl toxicity that occurred because, as the report notes, Prince self-administered the drug. Fentanyl is a synthetic painkiller opioid…”

Kelsey Doyle: There are a lot of potential explanations for the causes of the crisis. One was misleading marketing, especially by Purdue Pharma, the producer of OxyContin, and their claim that the drug was less prone to abuse.

Male Voice: “Once you’ve found the right doctor and have told him or her about your pain, don’t be afraid to take what they give you.”

Kelsey Doyle: As an article in the New York Times explained:

Male Voice: “Purdue Pharma contended that OxyContin, because of its time-released formulation, posed a lower threat of abuse and addiction to patients than do traditional, shorter-acting painkillers like Percocet or Vicodin.”

Male Voice: “Less than one percent of patients taking opioids actually become addicted. And any drowsiness that might occur when you start to take it…”

Jenny Luna: What’s important here, Kelsey, is that that claim became the linchpin of the most aggressive marketing campaign ever undertaken for a narcotic painkiller by a pharmaceutical company. Just a few years after the drug’s introduction in 1996, annual sales reached $1 billion. Purdue Pharma heavily promoted OxyContin to doctors like general practitioners, who often had little training in the treatment of serious pain or in recognizing signs of drug abuse in patients.

Kelsey Doyle: But studies later revealed that the risk for abuse was actually greater with extended-release formula pills, which contained more active ingredients.

Jenny Luna: And in 2007, Purdue Pharma, which was owned by the Sackler family, pled guilty to misbranding OxyContin and agreed to pay more than $600 million in fines. The company released a statement saying:

Male Voice: “Nearly six years and longer ago, some employees made or told other employees to make certain statements about OxyContin to some healthcare professionals that were inconsistent with FDA-approved prescribing information for OxyContin and the express warnings it contained about risks associated with the medicine. The statements also violated written company policies requiring adherence to the prescribing information. We accept responsibility for those past misstatements and regret that they were made.”

Kelsey Doyle: The consequences of that misleading marketing were seen as so severe that some experts held Purdue Pharma largely responsible for the entire epidemic. As Vanity Fair put it in a June 2019 article:

Male Voice: “Forty-eight states along with more than 500 cities, counties, and tribal governments have sued Purdue, accusing the company of fueling the crisis with a wide range of deceptive practices. A lawsuit filed by Massachusetts, the first to name the Sacklers, paints a picture of an almost impossibly venal family who continued to push sales of longer-lasting, higher-dose prescriptions of OxyContin long after it was clear that both increased the risk for addiction. Since 2008, the Sacklers have made $4 billion from Purdue, most of it in the form of profits from opioids. Eight people in a single family, the Massachusetts suit alleges, made the choices that caused much of the opioid epidemic.”

Jenny Luna: A lawsuit filed by California Attorney General Xavier Becerra went straight to the point, stating, “Purdue’s deliberate and deceptive marketing and sale of these drugs sacrificed the well-being of Californians for billions of dollars in profits.”

Male Voice: “The truth is the start of this crisis can be traced back to Purdue Pharma and the Sackler family and their pursuit of profits.”

Jenny Luna: Although Purdue is the most famous case, several other opioid manufacturers were accused of deceptive marketing as well, including Johnson & Johnson’s pharmaceutical division, Janssen Pharmaceuticals; Endo Pharmaceuticals; and Teva Pharmaceuticals. Cephalon, which produced a fentanyl lollipop for cancer patients, was accused of off-label marketing to physicians for conditions like migraines and back pain.

Kelsey Doyle: The second probable cause of the epidemic was kickback schemes. Here’s another example of how drug companies tried to get doctors’ attention: To increase sales of its fentanyl drug Subsys and expand its off-label use, a company called Insys Therapeutics created a speakers program to encourage doctors to prescribe Subsys to patients who do not have cancer. The Washington Post found that Insys paid more than $2 million in 2016 to headache and back pain specialists alone. And doctors who didn’t prescribe enough were removed from the speakers program. The company reportedly hired sales representatives for their attractiveness rather than their knowledge or experience. And according to an article in the New York Times:

Male Voice: “The speaker events themselves were often a sham, as top prescribers and reps have admitted in court. Frequently, they consisted of a nice dinner with the sales rep and perhaps the doctor’s support staff and friends, but no other licensed prescriber in attendance to learn about the drug. Some prescribers were paid four figures to, quote unquote, speak to an audience of zero.”

Jenny Luna: You’ve probably figured out by now, Kelsey, that the struggle wasn’t just with pharmaceutical companies but also with the way doctors handled patients’ concerns about addiction after finishing their prescription. Travis Rieder, a biomedical ethicist at Johns Hopkins, became addicted to opioids after his foot was crushed in a motorcycle accident. But when he wanted medical assistance kicking that addiction, he couldn’t get any help. Here’s Rieder talking to Terry Gross on Fresh Air:

Travis Rieder: “But we also spent the next couple of weeks after I initially got sick from withdrawal calling every doctor we could imagine. And to think about it, I had surgery at three different hospitals. I had five of those surgeries. I had a dozen or so surgeons, nurse practitioners, PAs writing these prescriptions. I had a pain management team after that big free flap surgery. We called everybody. And a bunch of them wouldn’t even talk to me. And this includes the pain management team. They would not speak with me, and the message they sent through a nurse was, ‘we prescribe opioids, but we don’t help with tapering.’ You know, in this big game of hot potato where the patient is the potato, everybody had a reason to send me to somebody else.”

Kelsey Doyle: And to add just one more piece of the puzzle, let’s talk about distributors, Jenny. Three large companies — Cardinal Health, McKesson, and AmerisourceBergen — distributed 90% of drug and medical supplies in the United States. Investigators accused these companies of contributing to the epidemic by failing to report suspicious orders from pill mills that illegitimately dispensed enormous quantities of opioids. In 2007, McKesson shipped 3 million prescription opioids to a single pharmacy in a West Virginia town, a town with 400 residents.

Jenny Luna: The DEA tracks prescription opioids and in 2016 reporters at the Washington Post sought to obtain that data. The reporters were met with fierce resistance by manufacturers, distributors, pharmacies, the DEA, and the Department of Justice. But in June 2019, a federal appeals court ruled that the data must be released. It showed that 76 billion prescription opioid pills had been distributed between 2006 and 2012 and that the number of pills per person varied dramatically across counties. It found some rural counties had been receiving hundreds of pills per resident.

Kelsey Doyle: The Post reported a 2009 email exchange about an overnight shipment of 1,200 bottles of oxycodone between the vice president of sales at a wholesale drug distributor and an account manager at a pharmaceutical manufacturer.

Jenny Luna: “Keep ’em coming, flying out of there,” said the distributor before joking, “It’s like people are addicted to these things or something. Oh, wait, people are.”

Kelsey Doyle: The manufacturer kept up the humor, responding, “Just like Doritos, keep eating. We’ll make more.”

Jenny Luna: It wasn’t just reporters at the Washington Post investigating this. In 2016, reporters at the Center for Public Integrity and the Associated Press charged that some drugmakers claimed to be combating the epidemic but were simultaneously funding advocacy groups that fought against limits imposed on the drugs.

Kelsey Doyle: Yup — lobbyists, another key player in this tale. A United States Senate report determined that between 2012 and 2017, five opioid manufacturers — Purdue Pharma, Janssen, Mylan, Depomed, and Insys Therapeutics — had given nearly $9 million to 14 opioid policy advocacy groups and professional societies, and physicians affiliated with the advocacy groups that accepted more than $1.6 million in payments.

Jenny Luna: Drugmakers were also funding the Pain Care Forum, which was described by the Center for Public Integrity as “a largely unknown network of opioid-friendly nonprofits.” From 2006 through 2015, the Pain Care Forum contributed more than $24 million to candidates for state-level offices. The largest contributions went to lawmakers who controlled legislative agendas.

Let’s talk about how we got here, Kelsey, from the medical perspective. Think back to the beginning of our podcase. Some in the medical community believed there was just one shift in definition and understanding that led to opioid overprescription. That was around 1995 with the recasting of pain as a sort of fifth vital sign, an attempt to increase the awareness of pain among healthcare professionals. As one doctor wrote in Medical Economics:

Male Voice: “The misguided acceptance of pain as the fifth vital sign has been and still is the single biggest mistake in the history of modern medical pain management.”

Kelsey Doyle: Speaking on NPR¸ Stanford’s medical director of addiction medicine, Dr. Anna Lembke, noted:

Dr. Anna Lembke: “When the patient was discharged, the patient was then asked, ‘Did your doctor do everything in her power to eradicate your pain?’ And if the patient said, ‘No, they didn’t’ on that survey, then it looked really bad for the doctor; it looked bad for the hospital; and it meant that they would get dinged on the Joint Commission survey. So it became a kind of groupthink, where it looked like treating pain aggressively with opioids was something that was based on science, when in fact it was based on big pharma’s influence of these major regulatory bodies.”

Jenny Luna: In 2016, a group called Physicians for Responsible Opioid Prescribing asked the Joint Commission to reexamine its pain management standards, writing, “Pain is a symptom, not a vital sign,” and noting that linking reimbursements to patient satisfaction with pain treatment resulted in opioid overprescribing.

Kelsey Doyle: Others in the medical community argued against the accepted wisdom about the U.S. overdose crisis, which singles out prescribing as the causative vector. An article in the American Journal of Public Health makes the case that:

Male Voice: “Although drug supply is a key factor, we posit that the crisis is fundamentally fueled by economic and social upheaval, its etiology closely linked to the role of opioids as a refuge from physical and psychological trauma, concentrated disadvantage, isolation, and hopelessness. Overreliance on opioid medications is emblematic of a healthcare system that incentivizes quick, simplistic answers to complex physical and mental health needs.”

Jenny Luna: According to the CDC, just under 50,000 opioid overdose deaths were recorded in 2019, of which nearly 73% were caused by synthetic opiates.

Kelsey Doyle: In September of that year, the CDC started a multiyear program to tackle the opioid crisis by partnering with state, county, and city health departments.

Jenny Luna: As for Purdue Pharma, in September of 2021, a federal judge granted the Sackler family and their associates lifetime immunity from opioid-related lawsuits. The company will also pay $4.5 billion to help states, counties, and cities battling with the opioid epidemic as part of its bankruptcy settlement. Some looked at the ruling as closure, while others criticized it as just a slap on the wrist for the wealthy family.

Kelsey Doyle: This podcase was based on the written case titled “The Opioid Epidemic,” written by Ken Shotts, professor of political economy at Stanford Graduate School of Business, and case writer Sheila Melvin. It was produced by me, Kelsey Doyle, and Jenny Luna.

Jenny Luna: Associate producers were Andrew Stelzer, Hoi Shan Cheung, and Pablo Woythaler.

Kelsey Doyle: We hope this information helps you better understand the events that led up to the most recent opioid epidemic. The goal of this podcase is to spark conversations and ideas about business ethics and businesses’ role in society.

Jenny Luna: If you like this, check out other podcasts by Stanford GSB, including Think Fast, Talk Smart, a show for improving communication at work, or Grit and Growth, a show that shares leadership strategies from some of the world’s leading thinkers and practitioners. Thanks for listening.

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