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August 7, 2019

To settle their opioid lawsuits, local governments offer an unprecedented plan

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    Cities and counties are proposing to form a negotiating bloc involving all 33,000 U.S. counties, cities, and towns, including those that have not filed lawsuits, to settle opioid cases brought by local governments, while sources say AmerisourceBergen, Cardinal Health, and McKesson have proposed to pay $10 billion to settle opioid cases brought by state governments, the Wall Street Journal reports. 

    Your top resources for combatting the opioid epidemic in one place

    Cities, counties propose to create negotiating bloc

    A federal judge, who is overseeing the consolidation of 2,000 opioid cases brought by local governments, on Tuesday heard arguments in favor and opposition of a proposal by plaintiffs' lawyers to create a negotiating bloc of 33,000 U.S. counties, cities, and towns, including those that have not filed lawsuits, to settle opioid cases, according to the Journal.

    U.S. District Judge Dan Polster during the hearing in Cleveland, Ohio, appeared to express support for the proposal to involve every U.S. city, county, and town across the nation in settlement discussions. Polster said the unprecedented proposal could allow the companies, which are being sued for allegedly fueling the opioid epidemic, to find "global peace."

    However, most states oppose the proposal, Reuters reports. According to the Journal, some of the opposition stems from the concern that states will be left out of negotiations. Jonathan Blanton, a deputy attorney general in Ohio, argued that the proposal could undermine the rights of states to settle their own cases, the Journal reports. Blanton added that state legislatures and attorneys general are better positioned to "ensure the money goes to where the harm really is."

    Polster said the proposal would not have an effect on state settlements, as companies under the proposal would still have to reach separate settlements with states. Polster noted that the purpose of the proposal is to provide a pathway for local governments to broadly settle their opioid cases. Polster said, "There needs to be some vehicle to provide resolution to these cases."

    Polster said he expects to rule on the proposal quickly, according to Reuters. If Polster approves the proposal, the companies involved in the cases could choose to settle with the cities, counties, and towns, or they could continue to fight against the claims or propose their own settlements, the Journal reports.

    AmerisourceBergen, Cardinal Health, McKesson propose $10B settlement, sources say

    Separately, AmerisourceBergen, Cardinal Health, and McKesson—the nation's three largest opioid distributors--have reportedly proposed to pay $10 billion to settle state opioid cases, sources familiar with the talks told Bloomberg.

    The companies proposed the settlement during negotiations with the National Association of Attorneys General, which is overseeing settlement discussions on behalf of more than 35 states, according to Bloomberg. The proposed settlement is the first in two years of negotiations to include a dollar figure to resolve the opioid cases, Bloomberg reports.

    The National Association of Attorneys General countered the settlement proposal with a request for $45 billion to cover the public health costs related to opioid misuse. Any settlement the states and distributors reach would be paid over decade and would apply only to state opioid cases.

    However, McKesson told Reuters that it "has made no settlement offers," while AmerisourceBergen said it is continuing defend itself in court. According to Reuters, Cardinal declined to comment on the settlement (Randazzo, Wall Street Journal, 8/6; Feeley, Bloomberg, 8/6; Paavola, Becker's Hospital Review, 8/6; Raymond, Reuters, 8/6).

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