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Two counties in Ohio were on the verge of filing a lawsuit against several companies for their involvement in the opioid crisis. However, a last-minute agreement resulted in a $260 million settlement. This development has significant implications for the counties, the companies, and the potential for additional lawsuits in the future.
Which parties were part of the lawsuit?
The lawsuit was initiated by two Ohio counties, Cuyahoga and Summit, targeting a consortium of companies. These included major drug distributors such as McKesson, AmerisourceBergen, and Cardinal Health, along with Teva Pharmaceuticals, a manufacturer of generic drugs. Walgreens was initially included in the lawsuit but is not part of the settlement, as it operates both as a drug distributor and a pharmacy.
More than 2,000 local, tribal, and state governments are preparing to file lawsuits against various companies related to the opioid crisis. To streamline the process, a judicial panel consolidated these cases into a single package overseen by one judge. This Ohio case was set to be the first of its kind. (NPR provides a detailed explainer on how this mega-litigation is structured and its progress so far.)
Shortly before the Ohio lawsuit was scheduled to go to trial, the involved counties and companies reached a settlement agreement. The companies did not formally acknowledge any wrongdoing as part of the deal.
The counties intended to argue that the companies were aware of the significant diversion of opioids to the black market and failed to take adequate measures to prevent it. They claimed this created a 'public nuisance,' putting citizens at risk. The counties sought $8.2 billion in damages, though the final amount would have been determined by the trial's outcome.
How will the settlement funds be allocated?
The three drug distributors will jointly pay $215 million to the two Ohio counties. Teva Pharmaceuticals will contribute $20 million over two years, along with an additional $25 million worth of anti-addiction medications.
County prosecutors have suggested that the settlement funds will be allocated to addiction treatment services and support for first responders. Cleveland.com previously reported that funds from another opioid settlement will be directed toward initiatives such as opioid treatment programs, foster care for children affected by the crisis, and expanding the medical examiner’s office staff.
What happens next?
Some of the remaining lawsuits may follow a similar settlement pattern. Whether this is positive or negative depends on perspective. Teva Pharmaceuticals’ stock rose following the settlement announcement, indicating favorable outcomes for the company.
According to The Wall Street Journal, a coalition of state attorneys general is aiming for future settlements totaling $18 billion. However, some local governments express concerns that the funds may not reach those most in need. They cite the 1990s tobacco litigation, where a $206 billion settlement primarily benefited state budgets rather than addressing public health. Local representatives emphasize that any broader settlement should directly address the opioid addiction crisis, a key aspect of the Ohio agreement.
