35 States Indicate Support for $50 Billion Settlement Offer from Opioid Manufacturers

On February 22, 2020, a vote by the National Association of Attorneys General revealed 35 states and territories are now in favor of a proposed nearly $50 billion settlement offer from opioid manufacturers. With bipartisan support representing nearly 70% of the American population, this vote signaled a step towards finalizing a settlement deal before trial is set to start in March.

This encouraging result came just seven days after 21 states’ Attorneys General signed a letter rejecting a previous $18 billion settlement offer from the drug makers. The letter outlined the states’ objections to the proposed offer to be paid out over 18 years. The Attorneys General expressed their doubts that an $18 billion settlement could achieve a global resolution to the opioid crisis and that they required a faster payout schedule.

In response, defendants Cardinal Health, Amerisource Bergen, and McKesson, have attempted to sweeten the deal with their updated offer of $23 billion cash and $26 billion in medical and rehabilitation treatment delivered over two decades.

The Opioid Epidemic

This step towards settlement is just one in a very long litigation journey surrounding the opioid crisis. For nearly 30 years, the volume of prescribed opioids has steadily increased, along with opioid-related overdoses and deaths. According to the CDC, between 1999 and 2017, almost 218,000 Americans died from prescription opioid-related overdoses.

Among the culpable parties in the epidemic, Big Pharma’s role in producing highly-addictive opioid drugs has been heavily scrutinized. The primary complaint against drug makers is lack of governance surrounding the volume of opioids manufactured and brought to market. This strategy was a profit play, as pharmaceutical companies were paid based on distribution numbers. The resulting outrage from impacted Americans has led to countless lawsuits from the local to the national level.

The Ohio Approach

Ohio has become the epicenter of the opioid epidemic and its related litigation. Individual municipal and county lawsuits in the state have been consolidated into Cleveland’s federal court. This framework—coined as One Ohio— has yielded immense results.

In October 2019, two Ohio counties were awarded a $260 million settlement by four major drug companies. The award came just hours before the trial was set to start. Lawyers called this a “bellwether” case—a model for how other jurisdictions may perform in their legal battles. Walgreens, another defendant named in the suit, was not involved in the settlement. Ohio intends to pursue that case in court later this year.

In Other Opioid News

Ohio isn’t the only state commanding major settlement amounts. In August 2019, an Oklahoma judge ruled Johnson & Johnson would pay $572 million to the state for its role in the epidemic. This was the first instance of a drugmaker being held responsible for their role in producing and distributing opioids.

In January 2020, a pharmaceutical executive was sentenced to 66 months in prison for conspiracy and bribery in drug marketing. Insys Therapeutics founder, John Kapoor, was found guilty of aggressive marketing tactics for opioid painkillers and oral fentanyl sprays. Insys Therapeutics has since filed for bankruptcy.

In an emerging story, drugmaker Mallinckrodt announced a $1.6 billion settlement plan to resolve several opioid-related cases. The deal includes an eight-year plan to pay out the settlement funds, aided by Chapter 11 filings.

The opioid epidemic is an ongoing battle of massive proportion. Prescription drug makers and the hundreds of thousands of Americans impacted by addiction continue to vie for legal resolution. Judging by the flurry of litigation decisions last year, the ultimate outcome for affected parties is far from settled.