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Over 20 State Attorneys General Reject $18 Billion Opioid Settlement Proposal

Feb 14, 2020
Originally published on February 14, 2020 4:29 pm
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MARY LOUISE KELLY, HOST:

Efforts to reach a big national opioid settlement have hit another snag. More than 20 state attorneys general have signed a letter rejecting an $18 billion deal proposed by three of the country's biggest opioid wholesalers. This was first reported today by The Wall Street Journal. Brian Mann with North Country Public Radio follows opioid litigation for NPR. He joins me now via Skype. Hey there.

BRIAN MANN, BYLINE: Hi.

KELLY: That is a lot of money on the table that could help ease the opioid epidemic. Why are so many states saying no thanks?

MANN: Yeah, it does sound like a lot of money, and this settlement would involve just three firms - AmerisourceBergen, McKesson and Cardinal Health. These aren't drugmakers; these are the companies that distributed opioids to pharmacies. But when you compare that $18 billion figure against the scale of this epidemic, with hundreds of thousands of people dead from overdoses and a lot more people sick or damaged, critics say it's just a drop in the bucket.

And there is one more thing, Mary Louise, that's angering state officials. In a conference call with investors last month, the CEO of AmerisourceBergen, Steve Collis, seemed to downplay the economic pain his company would feel from this settlement. Collis described the payout as a relatively minor cost of doing business.

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STEVEN COLLIS: We don't feel the need to war chest at all because it is a lot of cash in absolute terms; in relative terms, it's relative to a couple of hundred million dollars a day in sales. It's not that much.

MANN: And to put that in context, AmerisourceBergen had revenues in just the first quarter of this year of roughly $48 billion. So a lot of these state attorneys general want the companies to pay a lot more, and they want the payouts to come a lot faster.

KELLY: So where does that leave things? Is the settlement deal completely dead?

MANN: No. Talks are still underway, and people in state attorneys general offices around the country have been telling me today they think a settlement is still possible. They describe this letter as another step in negotiations; company executives also saying they still want a deal. The alternative, remember, could be years and years of litigation, and that happens with the next big opioid trial opening here in New York just next month.

KELLY: Right. And we're talking here about one deal involving these three big opioid distributors. What about the wider settlement talks, talks involving Johnson & Johnson and pharmacies, like CVS?

MANN: Yeah, they're pretty stuck, too. More than a dozen drug companies and pharmacy chains are still in settlement talks with states and with local governments that have filed thousands of lawsuits. But getting everyone on board with some kind of global resolution has been tough. So many different people say they were harmed by the industry's marketing and sales of these addictive opioid medications; they're all demanding compensation. Legal experts keep telling NPR this is the most complicated civil litigation they've ever seen, more complex even than tobacco or asbestos.

KELLY: That's saying something. What about Purdue Pharma, Brian, the makers of OxyContin? They declared bankruptcy last year. What's happening with that case?

MANN: Yeah, this is on its own track now. A federal bankruptcy judge in New York recently opened Purdue's bankruptcy process to federal - excuse me - to individual patients and their families. They can now come forward and ask for compensation. The deadline for people to file claims against Purdue is the end of June.

But a lot of big questions still here about how much money will eventually be divided up and who will be first in line to get that cash. Some states are still suing to try to recoup profits from opioid sales that made members of the Sackler family incredibly rich. They're the owners of the company. And we don't know yet how much of their personal wealth will eventually be affected by this bankruptcy case, which is back in court next week.

KELLY: Thank you, Brian.

MANN: Thank you.

KELLY: NPR's Brian Mann.

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