Four major drug companies averted an opioid epidemic trial this month with an 11th-hour settlement. But the massive litigation is far from over.
There are still about 2,400 states, cities, counties and Native American tribes suing a couple dozen major opioid makers and distributors. These communities, which will be dealing with the fallout of the opioid abuse epidemic for years to come, are seeking billions more in damages as the drug companies weigh settling against the risks that come with trying to persuade a jury that they’re not culpable.
“It’s a gigantic Gordian knot, involving a tangle of companies and governmental jurisdictions, all represented by combative and rivalrous lawyers,” my Washington Post colleagues Joel Achenbach, Lenny Bernstein, Meryl Kornfield, Scott Higham and Sari Horwitz report in this look at what comes next.
Here are three things to watch as the litigation unfolds:
1. The best-case scenario for states, cities and counties is a sweeping settlement among all the parties.
But achieving this so-called “global agreement” is a fraught endeavor. It would require consent from about 35,000 plaintiffs in the case, along with the more than 300 drug companies, mom-and-pop drugstores and professional medical associations who are being sued.
That’s why such a deal is unlikely in the near term, my colleagues report, after checking in with the attorneys involved in the case and surveying attorneys general in all 50 states and the District.
Attorneys general from North Carolina, Pennsylvania, Tennessee and Texas have announced a provisional framework for a $48 billion global settlement with giant distributors McKesson, AmerisourceBergen and Cardinal Health, as well as with manufacturers Teva Pharmaceutical Industries and Johnson & Johnson. It would funnel $4 billion in cash to communities in the first two to three years, and a billion every year thereafter for 18 years.
But only three other states are supporting it so far. And top lawyers for the cities and counties say the settlement is far too small and the payouts are too slow.
“ 'Global peace,' as the companies call such a deal, could take months, years, or remain a pipe dream — forcing communities across the country to make their own cases against the drug companies and wind up competing with one another in a protracted legal slog,” my colleagues write.
“Even the most optimistic projection of a long-term settlement — legal experts suggest a range from $50 billion to $100 billion, paid out over many years — will be orders of magnitude smaller than the human cost of the epidemic,” they note.
2. Attorneys disagree over the fairest way to share money from the drug companies, whether it comes from settlements or court-ordered damages. States and communities most severely hurt by the opioid epidemic argue they should get a larger share of the funds.
“Earlier this year, attorneys for the local plaintiffs proposed a distribution formula based on three factors: the number of pills distributed, deaths from opioids and the number of people with opioid use disorder,” my colleagues write. “That formula, if approved, would send more money per capita (if not in total dollars) to rural counties in the eastern United States where the opioid epidemic was fueled primarily by pills.”
But state attorneys general have a different idea. They want the proceeds split using four factors: state population, opioid deaths by state, opioid pills distributed by state and levels of opioid addiction by state.
There are also concerns that the money won't go directly to mitigating opioid abuse or helping communities heal from the effects of the epidemic. That's partly what happened in the tobacco settlements in the 1990s. Much of the tobacco money went to repair roads, bridges and potholes, rather than toward smoking cessation campaigns or public health programs, my colleagues write.
“How will money be distributed among states, counties and cities?" David Noll, a Rutgers University Law School professor and expert in legal institutions and procedures, wrote me in an email. "What programs does the settlement create or fund to abate the crisis? Is there oversight for how money is spent? Is there money required to be spent on opioid-related functions?”
3. The defendants also have their own rivalries and differing legal strategies. They include not only manufacturers of opioids but also distributors and pharmacies.
Walgreens held out earlier this month even as the two Ohio counties settled for $260 million with AmerisourceBergen, Cardinal Health, McKesson and Teva Pharmaceuticals. The remaining claims against Walgreens could be combined with other pending lawsuits the counties have brought against pharmacies.
And then there’s Purdue Pharma, the embattled maker of the popular opioid OxyContin. Legal proceedings were upended when it filed for bankruptcy as part of a proposed $12 billion settlement deal with nearly two dozen states and thousands of U.S. cities, counties and territories.
But here’s one thing the companies are unified on: None have admitted guilt in the two-county settlement or in the proposed global settlement the states are pursuing.
“The agreement in principle is intended to provide certainty for involved parties and critical assistance for families and communities in need,” Johnson & Johnson said in a statement. “This agreement in principle is not an admission of liability or wrongdoing.”
AHH, OOF and OUCH
AHH: The White House has updated a government website aimed at helping people find treatment for substance abuse, the latest effort from administration officials to mitigate the ongoing opioid crisis.
The website — FindTreatment.gov — has been “customized to allow its users to find an array of treatment programs, including inpatient and outpatient services, as well as help for people under 18, veterans and members of the LGBTQ community,” our Washington Post colleague Lenny Bernstein reports. “Other options allow users to search for programs that accept different kinds of insurance and offer particular medications, such as buprenorphine or methadone.”
The website lists 13,000 providers that have all been licensed by their states. “We recognize that many Americans have a limited window when they themselves, or someone they care about, is struggling with addiction or opioid use disorder,” White House senior adviser Kellyanne Conway said about the new effort.
OOF: A former Juul executive claims in a lawsuit that the company released 1 million tainted vaping pods into the market, and also alleges he was “inappropriately terminated” after raising concerns about a shipment of refill kits.
Siddharth Breja, who was the vice president of global finance, said he was terminated in March after expressing concerns about a shipment of mint-flavored refill kits, our Post colleague Taylor Telford reports. In an emailed statement to The Post, his attorney Harmeet Dhillon said Breja “became aware of very concerning actions within the company that could be jeopardizing the health of millions of Juul users. He performed his duty to shareholders, the board, and the public by reporting these issues internally, expecting that Juul’s senior management would do the right thing.”
But Juul told The Post that the allegations about tainted pods were “baseless” and that Breja was terminated “because he failed to demonstrate the leadership qualities needed in his role.”
The e-cigarette company is already facing numerous lawsuits and questions over its contribution to a youth vaping crisis. Criticism of Juul and e-cigarette use has deepened as a mysterious spate of vaping-related lung illnesses emerged nationwide, sickening more than 1,600 vaping device users and killing at least 34 people.
OUCH: Former vice president Joe Biden’s presidential campaign criticized Sen. Bernie Sanders after the senator from Vermont dismissed the idea that he should release details about how to fund his Medicare-for-all plan.
“It’s alarming that Senator Sanders, who has been up-front for years that Medicare for All would require middle-class tax hikes, won’t tell voters ‘right now’ how much more they will pay in taxes because of his plan,” Kate Bedingfield, Biden’s deputy campaign manager, said in a statement, CNBC’s John Harwood reports.
Bedingfield added: “When you’re running to take on the most dishonest president in American history, Senator Sanders and others who back Medicare for All have to preserve their credibility.”
In an interview with CNBC this week, Sanders said: “You’re asking me to come up with an exact detailed plan of how every American — how much you’re going to pay more in taxes, how much I’m going to pay. I don’t think I have to do that right now.”
“Sanders was articulating a more politically cautious position than fellow progressive Elizabeth Warren, another Medicare for All advocate who has built momentum in the race all year,” John reports. “Under pressure from rivals for vagueness in a recent debate, Warren now says she is preparing a detailed plan for covering the enormous cost of the proposal.”
HEALTH ON THE HILL
— A new survey finds that when asked about their preferences between two Democratic approaches to health care and a third option that resembles a plan from GOP lawmakers, about 30 percent of the public supports each option.
“That means that most Americans support Democratic approaches to changing the health care system,” the New York Times’s Margot Sanger-Katz reports. “But that group is about evenly split between an expansive set of changes under the Medicare for all proposal favored by Senators Elizabeth Warren and Bernie Sanders, and a less sweeping overhaul that would simply move the country closer to universal coverage, such as those from Joe Biden and Pete Buttigieg.”
The new survey is from the New York Times, along with the Commonwealth Fund and the Harvard T.H. Chan School of Public Health. Survey respondents were asked to pick their favorite of three policies: a Medicare-for-all type proposal, a more incremental approach and a plan like what congressional Republicans have pitched that would give more states more authority to create their own health systems.
One of the notable revelations: Those who said they supported a Medicare-for-all system the most were more comfortable with the government taking responsibility for guaranteeing health care for all Americans. And 79 percent of them said they would personally pay more taxes to make it happen.
— An effort from Senate Democrats fell short yesterday to block a Trump administration rule that allows states to ignore parts of the Affordable Care Act. The Senate voted 52 to 43 to reject a resolution that sought to overturn the administration’s rule that would give states more flexibility in their insurance markets.
The vote was largely symbolic. As The Health 202 wrote this week, while Senate Democrats wanted to force their Republican colleagues to take a public stand on the rules, no states have thus far expressed interest in taking up the waivers — known as 1332 waivers — that would allow states to offer leaner, cheaper plans that could discriminate against patients with preexisting conditions.
“I’ve been listening to my Republican colleagues say for years and years that though they don’t love everything about the Affordable Care Act, they want to protect people with preexisting conditions,” Sen. Chris Murphy (D-Conn.) told reporters before the vote, as Politico’s Adam Cancryn reports. “Well, here’s their chance.”
Sen. Susan Collins (R-Maine), who was the only Republican to vote in favor of the resolution, “backed a similar Democratic resolution in 2018 aimed at blocking the administration’s expansion of short-term health plans. That attempt narrowly failed, ending in a 50-50 tie,” Adam writes.
— And here are a few more good reads:
- The Senate Health, Education, Labor and Pensions Committee holds a business meeting.