Drugmaker’s Opioid Settlement Offer Gains Ground With States

Opioid makers and distributors who proposed paying almost $50 billion to resolve U.S. lawsuits over the highly addictive drugs are drawing more support from states, including California and New York, as pressure mounts for a deal before a trial starts next month, people with knowledge of the talks said.

But nearly two dozen states and most of the cities and counties suing to hold the opioid industry responsible for the havoc wreaked by its products say the terms still aren’t good enough.

A Feb. 22 vote by the members of theNational Association of Attorneys General found that 35 states and U.S. territories — representing about 70% of the U.S. population — back offers byJohnson & Johnson,McKesson Corp. and other opioid companies, people familiar with the results said. The proposal includes more than $23 billion in cash as well as donations of drugs and other services valued at more than $26 billion over nearly two decades.

That’s a pickup of seven states plus one U.S. territory since the offer was unveiled in October, according to the people, who asked not to be identified because they weren’t authorized to speak publicly. The pro-settlement state attorneys general are pushing the deal to resolve more than 2,500 lawsuits seeking to recover billions spent battling the U.S. opioid epidemic.

Another 19 states plus Puerto Rico, along with a majority of the suing cities and counties, say the current offer doesn’t provide enough money fast enough. Although the companies want to strike a deal before next month’s trial in New York, company lawyers have said they won’t move forward with the deal unless a “critical mass” of states, cities and counties support it, the people added. It’s unclear what the lawyers consider a critical mass.

The municipalities say a recent offer by McKesson,Cardinal Health Inc. andAmerisourceBergen Corp. to kick in more than $1 billion to cover some of their legal fees didn’t sweeten the proposal enough to get them on board.

“As it stands with communities, the deal with the additional $1.2 billion over 18 years is not workable,” plaintiffs’ lawyers Joe Rice, Paul Hanly andPaul Farrell said in an emailed statement. They are leading the charge for the cities and counties.

AmerisourceBergen spokeswoman Kate Traynor declined to comment on the vote. McKesson spokesman David Matthews, Cardinal Health spokeswoman Erica Lewis andTeva Pharmaceutical Industries Ltd. spokeswoman Kelly Dougherty didn’t immediately return calls and emails seeking comment. Jake Sargent, a J&J spokesman, couldn’t immediately comment on the vote.

State and local governments are waging a litigation battle to force opioid makers and distributors to pay whatsome analysts say may be $100 billion to compensate them for tax dollars eaten up by the opioid crisis. Those suits have been consolidated before a federal judge in Cleveland.

The companies deny wrongdoing and say they were making and distributing a product that was approved by regulators and plays an important role in pain management, despite the abuses.

To resolve those claims, McKesson and others are offering more than $19 billion in cash and to provide billions in free delivery services. J&J, which at one time produced poppies, the active ingredient of opioids, would pay $4 billion to resolve suits against it. Teva would donate $23 billion of the generic addiction-fighting drug Suboxone and pay $250 million in cash to end the litigation.

Drugmakers are accused of pushing opioid prescriptions on doctors across the U.S. and downplaying the risks of addiction, while distributors and pharmacies are accused of turning a blind eye to suspicious orders and failing to meet government requirements on the painkillers.

More than 400,000 Americans have died of opioid overdoses over two decades as U.S. addiction rates surged, and local communities have sued to recover expenses on drug treatment and police services.

The consolidated case is In Re National Prescription Opioid Litigation, 17-md-2804, U.S. District Court, Northern District of Ohio (Cleveland).

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