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US Opioid Lawsuits On Verge Of Settlements With 4 Companies

The yearslong effort by state and local governments in the U.S. to force the pharmaceutical industry to help pay to fix a nationwide opioid addiction and overdose crisis took a major step forward Tuesday when lawyers for local governments announced they were on the verge of a $26 billion settlement with the nation’s three biggest drug distribution companies and the drugmaker Johnson & Johnson.

Under the deal, Johnson & Johnson would not produce any opioids for at least a decade. And AmerisourceBergen, Cardinal Health and McKesson share prescribing information under a new system intended to stop the avalanches of pills that arrived in some regions about a decade ago.

Lawyers for local governments said full details could be shared within days. That would not be the end of the deal though; each state would have 30 days to decide whether to join. And local governments will have five months after that to decide. If governments don’t opt in, the settlement total would go down.

“This is a nationwide crisis and it could have been and should have been addressed perhaps by other branches of government,” Paul Geller, one of the lead lawyers representing local governments across the U.S., said in a conference call with reporters Tuesday. “But this really is an example of the use of litigation for fixing a national problem.”

If approved, the settlement will likely be the biggest of many settlements to opioid litigation. While it means billions for lawyers who worked the cases, it is expected to bring more than $23 billion to abatement and mitigation efforts to help get treatment for people who are addicted along with other programs to address the crisis. The money would come in 18 annual payments, with the biggest amounts in the next several years.

The deal echoes one the companies have been pushing, sometimes in public, for two years.

Johnson & Johnson reiterated in a statement that it’s prepared to contribute up to $5 billion to the national settlement.

“There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need,” the company said. “The settlement is not an admission of liability or wrongdoing, and the Company will continue to defend against any litigation that the final agreement does not resolve.”

But Cardinal Health declined to comment early Tuesday, and the other distribution companies did not respond to requests for comment.

An Associated Press tally finds there have been at least $40 billion in completed or proposed settlements, penalties and fines between governments and the toll of opioids since 2007, not including one between the federal government and OxyContin maker Purdue Pharma in which most of the $8.3 billion would be waived. Purdue is trying to reach a deal through bankruptcy court that could be worth $10 billion over time; a hearing on that plan is scheduled for August.

Other deals are possible. While a growing number of companies in the industry have struck deals, some manufacturers have not — and no pharmacy companies have struck nationwide settlements.

But the total amount in the settlements is far below estimates of the financial costs of the epidemic. The Society of Actuaries found that the cost of the crisis in the U.S. was $630 billion from 2015 through 2018, with most of the costs borne by the private sector. And the White House Council of Economic Advisers, when considering the economic impact of people who fatally overdosed, put the one-year cost at about $500 billion nationally.

Unlike with the tobacco settlements reached in the 1990s, governments have agreed to spend money they bring in from opioid-related settlements to deal with the opioid crisis.

In a joint statement, the attorneys general for Connecticut, Delaware, Florida, Louisiana, Massachusetts, New York, North Carolina, Ohio, Pennsylvania and Tennessee said the settlement talks with the four companies are “potentially nearing their completion,” and that, “we look forward to bringing much-needed dollars home to our states to help people recover from opioid addiction and to fundamentally change the opioid manufacturing and distributing industries so this never happens again.”

But they still have choices ahead on exactly how they do it.

“Is it a nice chunk of change?” asked Ryan Hampton, who is in recovery from an opioid addiction and is a Las Vegas-based advocate for policy to address the overdose crisis. “Sure it is. Will it go to where it needs to go? The jury’s still out on that.”

Even before the settlement plan was unveiled Tuesday, a group of public health advocates and experts began calling for any settlement money to be spent to address the opioid crisis.

“It’s money that can do a lot of good if it’s used well,” said Joshua Sharfstein, a vice dean at the Johns Hopkins Bloomberg School of Public Health, who is spearheading the effort. “It’s really important to use it well to save lives because it’s coming at the peak of the overdose epidemic.”

Private lawyers on the Plaintiffs’ Executive Committee representing local governments in opioid lawsuits across the country announced some details of the settlement Tuesday even before it was completed. The decision to do so was partly because the state of New York reached a settlement Tuesday with the three big distribution companies amid a trial playing out in a state court on Long Island.

New York’s deal, worth more than $1 billion, represents the share of the national deal it will receive from distributors if the national deal is finalized. New York also reached a similar deal last month with Johnson & Johnson worth $230 million.

“Today, we’re holding them accountable delivering more than $1 billion more into New York communities ravaged by opioids for treatment, recovery, and prevention efforts,” New York Attorney General Letitia James said in a statement Tuesday.

The trial is expected to continue, but the settlement leaves only three drug manufacturers as defendants.

Other manufacturers, regional distribution companies and pharmacies will remain in the New York and other cases for now. Closing arguments in a West Virginia trial against the distributors are expected to proceed as scheduled next week. The attorney general there, Patrick Morrisey, said the state would probably not agree to the terms.

“I will keep fighting to protect West Virginia and will not allow larger states to dictate how we hold defendants accountable for their actions,” he said in a statement Tuesday.

The state and local governments say distribution companies did not have proper controls to flag or halt shipments to pharmacies that received outsized shares of powerful and addictive prescription painkillers. The companies have maintained they were filling orders of legal drugs placed by doctors — so they should not shoulder blame for the nation’s addiction and overdose crisis.

An Associated Press analysis of federal distribution data found that enough prescription opioids were shipped in 2012 for every person in the U.S. to have a 20-day supply.

And opioids — including both prescription drugs and illegal ones like heroin and illicitly produced fentanyl — have been linked to more than 500,000 deaths in the U.S. since 2000. The number of cases reached a record high in 2020.

West Virginia Holds Out In Purdue Settlement

A majority of states involved in Purdue Pharma’s bankruptcy case are ready to settle. West Virginia is not.

Attorney General Patrick Morrisey said Tuesday he doesn’t agree with the settlement formula, which would allocate funds largely based on population. He said West Virginia needs a bigger piece of the pie, since it was hit so hard by the opioid epidemic.

“Any such allocation formula fails to recognize the disproportionate harm caused by opioids in our state,” he said. “That is not acceptable. We are going to keep fighting that.”

Morrisey said he will argue this point before a bankruptcy court on Aug. 9 in New York.

The Sackler family, who founded Purdue Pharma, has put up $4.5 billion to resolve thousands of lawsuits alleging the drug company fueled the opioid crisis in communities across the U.S. The money would be dispersed over a decade.

Amid these lawsuits, Purdue Pharma filed for bankruptcy. Those suing the drug manufacturer need to sign off on the company’s bankruptcy plan before the Sacklers can give up ownership of the company.

The settlement plan would shield the Sacklers from further opioid litigation.

Journalist Eric Eyre On Cabell County, Huntington’s Case Against Drug Distributors

Thousands of lawsuits have been filed against big drug companies for their alleged role in the opioid epidemic. These lawsuits almost never make it to court, with both sides opting to settle. But that’s not the case with Cabell County and the City of Huntington. They are half way through an unlikely federal trial against three big drug distributors.

Journalist Eric Eyre has watched this case for two months, covering proceedings for Mountain State Spotlight. He also won the Pulitzer Prize in 2017 for his coverage of the proliferation of pain pills in West Virginia, which is chronicled in his book “Death in Mudlick: A Coal Country Fight Against the Drug Companies That Delivered the Opioid Epidemic.”

June Leffler spoke to Eyre about the trial so far.

This conversation was lightly edited for clarity.

Leffler: Cabell County and the city of Huntington’s case against AmerisourceBergen, McKesson and Cardinal Health is being called a landmark trial. But it seems like distributors and manufacturers are in constant litigation, we’re hearing this in the news all the time. Could you remind listeners why this trial is special?

Eyre: It’s the first federal case of the 3000 lawsuits to go to trial against the distributors, and some are against the manufacturers. So this is the sort of the first day of reckoning for the distributors, and it’s the first chance for a city and a county to hold these distributors accountable for the opioid crisis.

Leffler: Do we know why Cabell County and the city of Huntington did not opt to settle?

Eyre: They felt there wasn’t enough money being offered. And I don’t know the exact amount that was offered by the distributors. There was a national settlement, a $26 billion national settlement that the city of Huntington and Cabell County could have taken part in. That settlement still hasn’t been finalized. But the lead lawyer for the county and the city, Paul Farrell, said their cut of that would not have been enough money.

Leffler: Can you briefly describe what case the city and county are making?

Eyre: They’re making the argument that what started with this flood of prescription drugs served as a gateway to other drugs, heroin in particular. They’re accusing the drug distributors of not necessarily starting the epidemic, but fueling the epidemic. When there were these large numbers of pills being ordered by pharmacies, the distributors looked the other way and kept shipping, to basically make a lot of money. And the plaintiffs felt that they should have flagged these, what they call suspicious shipments of opioids, to pharmacies across the county.

Leffler: And as far as the defense, they say they’re just the middlemen. So who else do they think is at fault?

Eyre: They’re mostly pointing the finger at the doctors. They say every prescription that was written was written by a licensed doctor. There’s a little bit of shifting the blame to the pharmacies, but they’re careful about that, because the pharmacies are their customers. So they don’t want to get in bad graces with pharmacies. They also blame the Drug Enforcement Administration, saying they could have limited the amount of opioids in the country by setting lower quotas, and that the DEA failed to notify them when they had access to the same data that distributors had. Distributors have been reluctant to blame the manufacturers for years because they do business with the manufacturers. But now they’ve really turned their sights on one manufacturer in particular, Purdue Pharma, which is the maker of Oxycontin. The company has declared bankruptcy. So the defense keeps saying these drugs were marketed by Purdue Pharma falsely, Oxycontin was marketed as non-addictive. And Purdue Pharma surely played a huge role in the opioid epidemic. But as some people have told me, if you have a bank robbery you have somebody that goes into the bank and holds a gun or hands the teller a note, but then you also have somebody that drives the getaway car. And just because you drive the getaway car doesn’t mean you’re not responsible for the bank robbery.

Leffler: You’ve become well versed in how these distributors operate. And the scale at which they’ve shipped prescription opioids. I’m wondering after watching this trial for almost two months, what information has been presented that is memorable to you?

Eyre: Well, I think it’s the totality of just the devastation that’s been caused by the opioid crisis, the amount of money needed to abate the issue . On the plus side, I’ve learned that the city of Huntington and Cabell County have done many of the right things to address the crisis. Although, that’s being played up by the defense saying “You guys have done a fantastic job. So you don’t need any money from us.” But the problem is not going to go away next week. Another thing the distributors are saying is that when, not necessarily Cabell and Huntington, but when West Virginia has gotten previous grants from the federal government, we’ve been very slow to spend them. Our Department of Health and Human Resources was ranked last in terms of one particular federal grant that went out to address the opioid crisis. It took them three years just to spend 30% of the money. Now, I would attribute that not necessarily to a lack of need, but probably the problem is more bureaucracy within the DHHR.

Leffler: If the city and the county think that $10 million to $15 million isn’t enough, how much are they hoping to get if they win?

Eyre: Well, their testimony from their witnesses says $2.6 billion. I’ve heard numbers a lot lower than that. But I do know, they’re not going to take the proportion that would have been awarded if they were part of a national settlement. And I think that was going to be maybe $10 million or $11 million. But they run the risk. They could wind up with nothing. They really are an incredible team of high priced lawyers that are representing the distributors. These are some of the largest companies, they’re all in the top 20 of the Fortune 500. They have unlimited resources. And they can’t deal with a $2 billion verdict or award. And if you do that in Cabell County, then there would be the likelihood that would be extrapolated over the entire state of West Virginia and then over the country. And you would literally bankrupt the distributors if you give a county with 90,000 people $2 billion.

Leffler: Is there any potential for this case to settle?

Eyre: Well, I’m the guy who said that it would settle back before it started. I wouldn’t have bet my house on it. But these cases typically always settle. And, frankly, it’s in the best interest of people with opioid use disorder that need help that they do settle, because if the trial goes on, there’s going to be appeals, and then you have the appellate courts, and from there to the Supreme Court, and then you’re looking at another 10 years. It’s already been four years since the suit was filed. And the opioid crisis keeps changing, the drugs are changing, maybe now we should call it more of an addiction crisis. So from my standpoint, reach a fair settlement. Get the money to the people that need it in treatment, and then move on.

And I wanted to say that people always ask me about the judge. And his name is David Faber. He’s a U.S. District Judge. And so far, I think he’s been extremely fair, extremely patient. There’s times when the trial gets very tedious. And he is helping move it along. I have confidence that the judge will make a fair and reasonable decision at the end of the day.

Leffler: You are largely known for reporting on prescription opioid distributors and their dealings in the state. Your outlet, Mountain State Spotlight, has dedicated one to two reporters to sit in court every day of this trial. So that’s a lot of focus and resources put into this one topic. Why have you followed this so relentlessly?

Eyre: As you listen to the testimony, we still have babies being born dependent. We have a foster care system that’s a mess because of the opioid crisis. You have grandparents raising their grandchildren, because in some cases, both parents of a child have died of an opioid overdose. Jail costs and treatment costs are going through the roof. You see these movies that come out, and they have somebody go into withdrawal for like three days and all of a sudden they’re done. They’re no longer addicted. Well, that doesn’t happen. It’s usually a three to five year recovery process, then they have to deal with it for the rest of their lives. If you live here, which a lot of these lawyers on both sides don’t live here, but if you live here, you probably know either a co-worker or a family member or a neighbor that’s had some issue with opioid use disorder, and all the devastation that the crisis has caused in the state.

What More Can Be Done For Huntington's Opioid Crisis?

The City of Huntington and Cabell County are in federal court, taking prescription opioid distributors to task. If the city and county win their lawsuit, that could result in a payout of tens of millions of dollars. And in theory, that money could help fix the problem.

Dr. Lyn O’Connell works with the City of Huntington to tackle the substance use crisis through clinical services, research and program development.

She was also part of a team that produced a “resiliency plan” in 2020 for Huntington. The plan outlines a continuum of care her community could implement to stomp out the opioid crisis.

Health reporter June Leffler asked O’Connell how much a big settlement could loosen the grip opioids have on her community.

This interview was lightly edited for clarity.

Leffler: Do tell me what more we could see in a place like Huntington that already has so many different groups trying to tackle this issue?

O’Connell: I think what many folks imagine is that if an individual wants help, they just pick up the phone, or they just go to the doctor, or they walk in somewhere. It’s really not that easy.

There may be legal issues that need to be handled, there may be child or custodial issues that need to be handled. There may be wait lists that prevent them from doing any of those things. And so what we want to make sure is that we have a system that when someone says “I am ready and willing to enter treatment,” that there are no roadblocks. That transportation is not an issue, insurance is not an issue, that we’re coordinating across all of our systems to ensure that they have easy access. Because we know that when someone is ready and willing, that is the best time to intervene with that individual.

But we also know that it’s not just the individual, it’s the system, the family and the community. It’s a multi-factorial need. Every time that you quote solve one issue, you realize that there’s 10 more sitting behind it.

Leffler: What you think big settlement for the county and the city could accomplish? And what can any amount of money still not get done?

O’Connell: It’s such a challenge, because how do you value a single life lost? How do you place a value on those long-term negative impacts? I, for one, don’t know how to do that. And what can $1 do? Everything and nothing, simultaneously.

We have had grant funding that has allowed us to set up programs like PROACT, that make a concrete difference every day in the lives of people in our community. And things like Project Hope for Women and Children. But to some of the larger sort of systemic and philosophical issues that we’re facing, we will probably always be facing those.

If we take stigma, for example, if we don’t address people’s beliefs that other people aren’t as worth saving, we’re still going to have these fights and these issues, because we’ll have barriers. We’ll have providers who maybe don’t want to work with an individual with a substance use history, or employers that don’t want to hire someone with a substance use history, or judges that may not want to give someone a second chance, whether that’s remaining out of jail or prison or gaining greater custody and access to their children.

We can set up programs and improve access. But we also need to slowly work to educate that no one wakes up one day and hopes to enter a life of substance use disorder. Ideally, multi-millions of dollars being returned to this community could be used to comprehensively address both the concrete issues, but also start to address the philosophical needs as well.

Prescription Opioid Marketer Settles With W.Va. For $10 Million

A consultant to big-name prescription opioid manufacturers will pay out a $10 million settlement to West Virginia, Attorney General Patrick Morrisey announced today.

McKinsey & Company worked for Purdue Pharma and other companies to market and sell prescription painkillers, which states like West Virginia claim increased the opioid crisis at home.

Morrisey filed the lawsuit and a settlement was reached Thursday. This happened on the same day McKinsey settled a multistate lawsuit for nearly $600 million.

West Virginia was not part of the joint lawsuit that resulted in the hefty payout. Instead, Morrisey pursued action on his own.

“I’ve always been a believer that the monies should be based on the severity of the problem that you have in the state, not just population,” Morrisey said regarding the separate case.

“That was our call, so that there could be a separate negotiation, because I believe then, and only then, are you going to have the ability to truly have an amount and an agreement which reflects West Virginia’s unique needs,” he said.

Morrisey says he will push the state legislature to funnel this money to combat the opioid epidemic in West Virginia, most likely through efforts under the Governor’s Council on Substance Abuse Prevention and Treatment.

Investigative Reporter Talks Opioid Lawsuits, Upcoming Book

Community-based efforts can make a real impact in the fight against the opioid epidemic and could benefit from additional funding. One question, though, is whether money from court settlements against drug manufacturers and distributors will trickle down to community efforts.

For some insight, Inside Appalachia guest host Giles Snyder spoke with Eric Eyre, the Charleston Gazette-Mail reporter whose exposure of the opioid epidemic in West Virginia won the Pulitzer Prize for Investigative Reporting.

SNYDER: So what is it, more than 2000 local governments are involved in the national litigation?

EYRE: Yeah, there’s 2000 local governments and tribal governments that are involved. That includes states, cities, counties. The latest we’d heard that there was probably about $50 billion they were talking for a settlement. Obviously that’s up for discussion. There’s another $10 to $12 billion with Purdue Pharma.

SNYDER: So where are we with the national litigation right now?

EYRE: It’s dragged out. We were in the courtroom for one of the cases — the Cabell-Huntington case was argued a week ago. It had been transferred from the Cleveland courtroom where the most of the 2,000 cases are currently housed. And we heard the arguments. I turned to somebody and said, ‘Man, this seems like Groundhog Day’, because I had been hearing this since 2016. I mean, these things have been dragging on and dragging on and dragging on.

Paul Farrell, the plaintiff for the Cabell case, said he was ready to go right then and there, or at least within 30 days. The drug company said they wanted to wait at least 18 months, so the judge said, ‘Well, we’re not going to wait 18 months,’ but they didn’t set an exact trial date. But they’re talking about one in state court in New York that could go off in the next couple months. But the next big one would probably be the Cabell-Huntington opioid case. It was in consolidation in Cleveland, but they were successfully able to transfer it back to Federal court here with Judge Faber in Charleston, which everybody seems to think will make for a much speedier trial.

SNYDER: You mentioned a lot of money at stake there that could benefit local efforts to recover from the crisis. What’s your sense about whether these local efforts will ultimately benefit, or is that still an open question?

EYRE: One thing they’ve worked out is they’ve created this program called the “negotiation class”, and that’s every city/county/town in the United States as part of this negotiation class. They will all band together, and if there was a settlement and 75 percent of all these entities approved it, they would get the money.

But here’s the deal. There’s no stipulation that it would go to recovery. They’re arguing that this is a public nuisance issue. So conceivably, all these cities and towns and counties could take the money and use it for whatever they want. If they needed a new trash truck, if they needed to pave streets, if they needed to hire law enforcement officers, they could use the money any way they want it. So the recovery community’s really upset about that, that you know, the money’s not going to go to fix the problems that were caused.

SNYDER: Going back to the tobacco settlement in the 1990s and checking out how that money was ultimately spent, tell us anything about what could happen here. I guess what I’m asking is, are there any lessons to be learned here?

EYRE: Yeah, well, the tobacco money was significantly more. It was $200 billion. So about four times as much as what they’re talking about here. But the same thing happened there. A lot of that tobacco money, which was supposed to go to be prevention efforts and such, wound up being spent by the cities for other things, which they considered more pressing, that really had nothing to do with the ill health effects of smoking.

SNYDER: You wrote a few months back about one of the more heartbreaking aspects to all this. And that’s the babies who are born dependent on opioids, and how they seem to be left behind in the national litigation. Could you talk a little bit about where that issue is?

EYRE: Yeah, they’re stuck with the cities and counties, and I think that the cities and counties want them stuck there, because, you know, these are obviously the innocent victims of the opioid crisis. Their lawyers are desperately trying to get their cases severed and heard separately from the cities and counties. It just seems like they’re just completely different issues on the one side. There’s a lot of concern there’s going to be developmental delays, that type of thing. It’s going to impact their learning in schools. But so far, the judge in Cleveland has rejected all efforts, and there have been multiple efforts to carve out the baby cases from the other litigation, but so far, he’s rejected all those efforts.

SNYDER: I’m going to switch gears on you now and mention that we ran into each other a year or two ago in Shepherdstown, while you were speaking about your reporting. You were writing a book on the opioid crisis back then. And now I understand, it’s going to be out soon.

EYRE: Yeah, it’s coming out March 31. It’s called “Death in Mud Lick: A Coal Country Fight Against the Drug Companies That Delivered the Opioid Epidemic.” It’s basically about how a tenacious lawyer and an ex con actually who had a drug peddling past and myself, all sort of banded together one community to uncover this massive pill dumping in Appalachia how, how these drug companies, and these drug distributors, flooded Appalachia, and frankly for the rest of the nation, with an excessive number of opioids, which of course sparked the greatest health crisis in American history.

SNYDER: How much more reporting did you have to do for your book?

EYRE: I did a lot of extra reporting on impacts of the lobbying that was going on behind the scenes. When my articles came out, I mean, we mostly focused on Kermit, West Virginia, the town that had nearly nine million opioids in a town of like 300 people. But we found that that wasn’t some just outlier, that there were many communities in Appalachia in West Virginia, and other towns across the country that got a similar deluge of opioids.

Eric Eyre is a reporter with the Charleston Gazette-Mail. Giles Snyder is a newscaster with NPR. Their conversation is part of an episode of Inside Appalachia.