Big Pharma's Year of Reckoning (update)
Verdicts and settlements concerning the nation's opioid epidemic continue to stack up against big pharmaceutical companies as they face off against cities, counties and states in courthouses across the country. A new agreement reached at the brink of a trial in Cleveland is the latest.
The bellwether federal opioid abuse trial set to begin October 21st, in Cleveland, Ohio, ended before it began when Summit and Cuyahoga counties agreed to a settlement just hours before the gavel dropped in open court.
The agreement isn't global, though, meaning opioid manufacturers and distributors still face thousands of additional lawsuits scheduled in courts across the nation at both federal and state levels.
The cases brought before U.S. District Judge Dan Polster were designed to see how the plaintiffs' claims and the companies' defenses would fare in front of a jury. However, since being assigned these cases, U.S. Judge Polster expressed hope that a large scale agreement could be reached to resolve most of the more than 2,700 cases filed against "Big Pharma." All are lawsuits where plaintiffs allege that defendants contributed to the foreseeable addiction of millions of Americans to prescription opioids and the result that many of those addicted would turn to street drugs.
One large scale agreement is not what happened, at least not yet.
"No, this is not a global settlement, but we still want a global settlement," Joe Rice, a lawyer for Summit County and a leader of a team of plaintiffs' attorneys, said Monday outside the Carl B. Stokes U.S. Courthouse.
In principle, states agree with the framework of a global settlement in the works, but cities and counties involved are not yet entirely on board, according to a committee that represents thousands of municipal governments. In a statement, committee lawyers wrote they need more information. They want to know how the money will be distributed, whether it will be directed to relief measures or end up in general funds for state legislatures, and a timeframe of when the financial support would begin.
AmerisourceBergen, Cardinal Health and McKesson are the three biggest pharmaceutical distributors involved in the settlement. They agreed to pay a combined $215 million to the counties. Teva Pharmaceuticals is based in Israel and will pay $20 million, plus donate $25 million of a drug designed to help wean people off opioids. A small New York-based distribution company named Henry Schein also reached an agreement worth $1.25 million.
All sides had gathered in Cleveland for the highly anticipated trial expected to last about eight weeks. Preparations for opening arguments continued into the early morning hours on Monday until word finally came about the deal.
Walgreens was also set to defend itself at this trial. Since it did not reach a settlement agreement along with the other defendants, there is a chance the pharmaceutical chain could still end up in court.
The fate of other mass retailers and pharmacies like Walmart, CVS, Rite Aid and Discount Drug Mart remain unknown as well. They were removed from this case to help the trial move quickly, but without a global agreement, they could still end up in court.
Even without a massive public trial in Cleveland, the settlement still laid the foundation for cases yet to come by showing how companies reacted as the jury empaneled.
"If they blink before trial, the logical inference is they're going to blink before trial next time," Case Western Reserve University Law Professor Andrew Pollis told cleveland.com.
The fact that other companies facing similar cases around the country have already settled is another indicator. Purdue Pharma ( discussed at length in the Gist Say'n that examined how 2019 looked to be the year of reckoning for Big Pharma), has also settled. The maker of OxyContin, which is now navigating bankruptcy, agreed to a resolution of all its lawsuits that could cost the company $12 billion.
As reported by The New York Times, under the tentative settlement negotiated by Purdue Pharma earlier this fall, members of the Sackler family will pay between $3 billion and $4.5 billion over seven years. The company will restructure into a public corporation, with profits from drug sales going toward the plaintiffs. And similar to Teva Pharmaceuticals, Purdue agreed to donate addiction-treatment medication.
Drug Companies like Purdue Pharma heavily marketed prescription opioids for decades, providing relief for those with acute pain and making billions. But now that America is in the midst of a full-blown opioid epidemic, state and local governments are lined up to carve pieces off Big Pharma's profits to help stem the tide of addiction and offset the cost of dealing with the crisis.
Despite the most recent settlement, the defendants deny wrongdoing. All maintain that the drugs underwent intense Food and Drug Administration scrutiny and carry warning labels explaining the risk of addiction.
Companies like Walgreens argue these factors should help insulate them. Also, Walgreens claims it carefully controlled how the drugs were dispensed. "We never sold opioid medications to pain clinics, Internet pharmacies or the 'pill mills' that fueled the national opioid crisis," the company said in a statement.
With each new settlement reached, though, the likelihood of future jury trials diminishes. Odds are it's "let's make a deal" time with settlement talks continuing.