CLEVELAND (AP) — The nation's three biggest drug distributors and a major drugmaker reached a $260 million settlement with two Ohio counties over the deadly havoc wreaked by opioids, striking a deal just hours before they were set to face a jury at the start of the first federal trial over the crisis.
The agreement announced Monday calls for the distributors AmerisourceBergen, Cardinal Health and McKesson to pay a combined $215 million, said Hunter Shkolnik, a lawyer for Cuyahoga County.
Israeli-based drugmaker Teva would contribute $20 million in cash and $25 million worth of Suboxone, a drug used to treat opioid addiction.
The deal contains no admission of wrongdoing by the defendants, said Joe Rice, a lead plaintiffs' lawyer.
But it could turn up the pressure on all sides to work out a nationwide settlement, because every partial settlement reached reduces the amount of money the companies have available to pay other plaintiffs.
Opening statements are scheduled for Monday in the first federal trial over the opioid epidemic.
Rome and Floyd County are part of the Multi District Litigation case before U.S. District Judge Dan Polster in Northern Ohio. Their suit for damages against opioid manufacturers and distributors – and lawsuits filed by about 2,000 other local governments – will be bound by Polster’s rulings in the test cases.
Polster has been simultaneously pursuing two paths, litigation and settlement. He certified in September a negotiation class that would be part of a potential settlement and gave cities and counties through Nov. 22 to opt out.
Rome Mayor Bill Collins said Sunday the City Commission has met with Andy Davis and other attorneys handling the local class-action suit, but no decision has been made.
“It’s an ongoing process,” Collins said. “Until we can get some concrete answers as to where we fit in, we’re just holding our position.”
Floyd County Commissioners are also committed.
“We have no intentions of pulling out at this time,” Commission Chair Scotty Hancock said.
Davis has said he’s keeping daily tabs on the situation he describes as “extremely fluid.”
While settlement negotiations may continue, they reached an impasse Friday. At issue are key differences between state attorneys general and lawyers representing local governments.
One of the negotiators, North Carolina Attorney General Josh Stein, said that the deal local governments did not accept was worth $48 billion in cash, treatment drugs and services.
“We’re disappointed that the cities and counties refused to go along with that deal,” he said during a news conference in Cleveland after talks under Polster’s watch had ended for the day. “This would have helped the entire nation, not just a few counties, not just a few cities.”
Paul Farrell, a lead lawyer for the local governments, told The Associated Press that one hang-up was the states’ desire to be in charge of dividing the money.
State and local governments have been at odds for during the litigation. Ohio’s attorney general even tried to get the federal trial put on hold, arguing the state’s claims in state court should go first.
Earlier in the day, another of the lead lawyers, Paul Hanly, told The Washington Post that the drugmakers Teva and Johnson & Johnson as well as the distributors AmerisourceBergen, Cardinal Health and McKesson were not willing to increase their offer.
In a statement, the lead lawyers for the local governments said their goal with a settlement would be one that would ensure “these resources will be directed exclusively toward efforts to abate the opioid epidemic.”
When the trial starts Monday, “we look forward to sharing the facts — and the facts will show that opioid makers and distributors conspired to create and benefit from the worst public health crisis in decades,” the lawyers said.
That trial involves claims by two Ohio counties, but it’s considered a test case for similar lawsuits from governments across the country. The defendants in the case are Teva, the three major distributors, the smaller distributor Henry Schein, and Walgreens.
Johnson & Johnson previously settled with the two counties. Three other manufacturers also settled with the counties and another, OxyContin maker Purdue, is attempting to reach a deal to end all its lawsuits through bankruptcy court; on that, about half the states and many local governments oppose accepting the offer as it stands.
Polster has said he wants the parties to strike a settlement in such a way that it would make a real difference in resolving the crisis. He invited state attorneys general to participate in the negotiations even though their lawsuits against the industry were filed in state courts.