Seventh Circuit Finds Coverage for State’s Suit Seeking Costs of Drug Addiction

States and municipalities around the country have sued pharmaceutical companies for their alleged role in increasing levels of addiction and overuse of pharmaceutical products. These suits have given rise to insurance coverage disputes over whether such claims are covered under the pharmaceutical companies’ policies. The U.S. Court of Appeals for the Seventh Circuit has now weighed in on one such dispute and held that West Virginia’s suit seeking recovery of costs it incurred to provide services to citizens addicted to
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Fourth Circuit Finds “Pill Mill” Action Alleges “Occurrence”

In Liberty Mutual Fire Insurance Co. v. J.M. Smith Corp., 2015 U.S. App. LEXIS 3989 (4th Cir. Mar. 13, 2015), the U.S. Court of Appeals for the Fourth Circuit affirmed that Liberty Mutual was required to defend J.M. Smith Corporation, a wholesale pharmaceutical distributor sued for failing to implement sufficient controls over the distribution of prescription drugs, contributing to a well-publicized prescription drug abuse epidemic in West Virginia caused by excessive prescription drug orders. The Attorney General of West Virginia
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