Landmark nationwide settlement proposed for opioid lawsuits

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Attorneys for local governments across the US have unveiled a plan that they say would move the nation closer to a settlement of lawsuits stemming from the deadly opioid crisis. NPR reports that final payouts could rival the massive tobacco settlements of the 1990s. Such a deal, if reached, could funnel tens of billions of dollars to communities struggling with the opioid addiction crisis, while restoring stability to one of the country’s biggest industries.

“There has got to be a comprehensive approach to addressing the national epidemic, and this is a step toward that,” said Joe Rice, co-lead counsel for attorneys who filed the motion, representing hundreds of the communities suing Big Pharma. He said in the report that the framework, which attorneys filed in federal court in Ohio and still needs approval by the court, could help more than 24,000 communities across the US fight the opioid crisis. None of the defendant companies, which are facing a tsunami of litigation stemming from the epidemic, have signed off on the framework yet. “The defendants don’t have a sense of how they get closure, how can they put this issue behind them,” Rice said. “So, they have asked us for a roadmap.”

The report says in all, more than 1,800 lawsuits have been filed so far against drugmakers such as Johnson & Johnson, distributors like McKesson and street-corner pharmacies including CVS and Walmart. Plaintiffs claim the companies earned billions in profit by aggressively marketing and selling prescription opioids.

Richard Ausness, a professor at the University of Kentucky who follows opioid litigation, says that unless some kind of structure like this is created, companies could settle for billions of dollars with one group of towns and cities but still face other lawsuits. “Obviously they don’t want too many outliers suing them after they’ve settled with the majority,” Ausness is quoted in the report as saying. “This proposed settlement seems to anticipate that and provide for as much of a global settlement as possible.”

Attorneys for two of the drug companies involved in this lawsuit described the proposal as interesting but preliminary. The attorneys, who asked not to be named because they had not been authorized to speak publicly, said they haven’t had time to work through the details of how it would work.

Overdoses tied to prescription pain pills have killed more than 200,000 Americans, according to the Centres for Disease Control and Prevention, and cost taxpayers billions of dollars.

The report says the wave of civil suits has already forced one drugmaker, Insys Therapeutics, into bankruptcy. Another major firm, Purdue Pharma, has indicated they may follow suit. Judge Dan Polster, who is overseeing a trial of hundreds of consolidated opioid cases, has repeatedly urged communities and companies to reach a deal.

The report says that hasn’t happened yet. But intense negotiations are continuing, and sources are quoted in the report as saying that they expect many of the two dozen drug industry firms involved in the consolidated Ohio case to agree to some kind of substantial pay-out. In the end, there may be multiple settlements, involving separate companies or groups of companies, all contributing to a national fund designed to ease the opioid epidemic. “Tens of billions of dollars would be needed to make a real significant impact on this epidemic,” Rice said in the report.

The report says under this plan, nearly every community in the US – cities, towns, villages and counties – would be swept into a single “negotiating class.” Under that legal designation, local leaders would be able to approve or disapprove any settlements reached with drug companies. The vote would be weighted by population.

If three-quarters of communities sign off on deals that are struck, it would be finalised and money would be paid out, ending the company’s liability. A separate emergency fund, roughly 15% of any settlements would be set aside for towns or cities particularly hard-hit by the opioid crisis. And 10% of all drug industry pay-outs would go to pay the hundreds of private trial attorneys involved in the litigation.

Communities that don’t want to be part of any global settlement can also opt out entirely, but Rice says in the report that this plan was developed in consultation with many of the local officials and legal teams around the US that are suing the drug industry.

Meanwhile, pressure has been growing on drug companies in recent months to reach some kind of accord with communities. In March, Purdue Pharma settled with the state of Oklahoma for roughly $270m. Before its bankruptcy, Insys Therapeutics agreed to pay the federal government more than $225m in penalties tied to opioid marketing. Five of that company’s executives were convicted of federal racketeering charges. Johnson & Johnson is currently on trial in Oklahoma state court.

With the much larger Ohio case set to begin in October, public scrutiny and pressure will only grow, the report says. Judge Polster has refused to dismiss claims against drug firms, and he’s made it clear he feels the drug industry is partly to blame for the opioid epidemic. During a hearing in preliminary January 2018, Polster urged the parties to reach a deal that would “get some amount of money to the government agencies for treatment. Because sadly every day more and more people are being addicted, and they need treatment.”

NPR report

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