Updated: 5:39, Oct. 21, 2019
The three largest U.S. drug distributors and one drugmaker reached a $260 million settlement with Cuyahoga and Summit counties hours before the start of the first trial in the wide-ranging national litigation over the opioid crisis.
Cuyahoga County Executive Armond Budish, Summit County Executive Ilene Shapiro and Cuyahoga County Prosecutor Michael O’Malley said they had reached a settlement in principle with distributors AmerisourceBergen, Cardinal Health and McKesson as well as drug manufacturer Teva.
“We need resources from the parties that caused this problem,” Budish told reporters outside the courthouse in downtown Cleveland. “They need to make it right. And that’s the benchmark that this sets.”
The distributors will pay $215 million to both counties, according to local government officials.
Teva will pay $20 million in cash in the coming months, in $5 million installments through the second quarter of 2021, and make another $25 million in products available.
Local governments have more work to do in this litigation, but this settlement will help to address the opioid crisis in the short term, said Summit County Executive Ilene Shapiro.
“The long-term impact on our children that have been byproducts of this health crisis won’t end just because a settlement has been done,” Shapiro said. “The question is, how much is enough? This is not enough.”
Attorneys for the two counties were set to present their opening arguments Monday in a bellwether trial meant to test claims brought against drug companies by more than 2,300 local governments, Native American tribes and other parties. They accuse drug companies of fueling the opioid crisis through deceptive marketing and by failing to monitor suspicious orders of pills.
Walgreens, also a defendant, was not part of the 11th-hour settlement. Joe Rice, an attorney for the plaintiffs, said he expected claims against the company to be included in a later trial against pharmacies that could start next year.
Local governments will continue working toward a global settlement that could resolve claims from all plaintiffs, including counties, cities and state attorneys general, Rice said.
“We’re going to continue to talk with the industry, we want to continue to work cooperatively with the attorney generals, and if everybody will keep their eye on the ball, I think we can get a national deal done,” he said. “I think these companies realize that they need to be part of the solution.”
Rice said that local governments declined to sign onto a potential global settlement presented by four attorneys general last week.
Attorneys general for Pennsylvania, North Carolina, Tennessee and Texas announced Monday evening they had reached their own settlement in principle worth $48 billion with Johnson & Johnson, Teva, Cardinal Health, McKesson and AmerisourceBergen. The deal includes $22.25 billion in cash and $26 billion in medication over 10 years.
“Our work here is not done — we have to bring other states, counties, and cities on board with this framework,” Pennsylvania Attorney General Josh Shapiro said in a news release.
Ohio Attorney General Dave Yost threw cold water on the proposal.
“This isn’t a framework, it’s a pile of lumber that’s been dropped on the construction site,” Yost said in a Monday afternoon press release. “Ohio will wait and see what the detailed plan looks like. Right now, three of the four attorneys general haven’t even sued the distributors – and they don’t speak for Ohio.”
Other defendant companies have agreed to more than $60 million in settlements with Cuyahoga and Summit counties so far — a combination of cash payments and pharmaceutical products. Cuyahoga and Summit officials released plans for spending the funds on drug treatment and support services earlier this month.
OxyContin manufacturer Purdue Pharma announced an agreement in principle to settle lawsuits against the company nationwide as part of a bankruptcy reorganization.
This developing story will be updated as more information becomes available.
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