Updated at 11:50 a.m. ET
Three of the biggest U.S. drug distributors and a drug manufacturer have reached a last-minute deal with two Ohio counties to avoid what would have been the first trial in a landmark federal case on the opioid crisis.
Summit and Cuyahoga counties announced Monday morning that the tentative deal amounts to roughly $260 million.
Distributors AmerisourceBergen, Cardinal Health and McKesson pledged to pay $215 million, while manufacturer Teva Pharmaceuticals will pay $20 million in cash and an additional $25 million in addiction and overdose treatment drugs, according to Paul Farrell Jr., a co-lead attorney for the two counties. Under the deal, there is no admission of wrongdoing on the companies' part.
Government officials describe the agreement as a lifesaving deal that will funnel cash to social service programs and first responders on the front lines of the opioid crisis.
"If this was a war, today was supposed to be D-Day, where we engage the enemy and storm the beach," Farrell told NPR on Monday. "So, last night at 11:50 p.m., the defendants retired from the field and decided to settle this particular skirmish rather than fight."
However, the agreement unveiled Monday does not end the broader legal "war" between local governments and the companies they have sued in federal court — it pertains only to Summit and Cuyahoga counties. As the first to go to trial, their lawsuits had been expected to serve as a bellwether for the nearly 3,000 lawsuits that have been folded into one massive federal case known as the National Prescription Opiate Litigation.
Those thousands of lawsuits — filed by city, county and tribal representatives against companies in virtually every link of opioid drug production — remain on track for eventual trials if they do not reach settlements of their own.
"While this morning's trial will not begin as scheduled, the federal opioid MDL continues to move forward, as thousands of American communities still have claims against opioid industry defendants," the Plaintiffs' Executive Committee, the group of attorneys overseeing the consolidated federal case, said in a statement released Monday.
The plaintiffs claim that by aggressively marketing and selling highly addictive medications while downplaying the risk, these drug companies helped fuel an addiction crisis that has led to nearly a quarter-million prescription opioid overdose deaths in the past two decades. Some 130 people in the U.S. are still dying every day because of opioids, according to the Centers for Disease Control and Prevention.
By last weekend, most of the defendants scheduled to go to trial in the bellwether trial in the Northern District of Ohio — including opioid manufacturers Johnson & Johnson and Mallinckrodt, among others — had already reached settlements with the two counties.
Monday's settlement announcement means that only Walgreens remains on the list of original defendants for the Ohio trial. But since Walgreens has been sued for its role as both a distributor and a pharmacy, Farrell expects the company to be bumped to another trial date that includes only the two Ohio counties' lawsuits against pharmacies.
And Farrell expects to proceed with a similarly aggressive stance in the run-up to that trial date and any others that arise from the consolidated federal case.
"We were not going to accept an amount of money that didn't make a difference," he said. "And so we stuck to our guns and demanded that if there was going to be a settlement with Cuyahoga and Summit, it was going to be substantial enough to make a meaningful difference."
RACHEL MARTIN, HOST:
There has been a major development in a case to determine who bears the responsibility for America's opioid crisis. This morning, four drug companies reached a tentative deal in a landmark case in Ohio, where the crisis has claimed thousands of lives. The development came less than two hours before the trial was set to begin. Here with the latest is North Country Public Radio's Brian Mann. He covers opioid litigation for NPR, and he joins us from Cleveland. So, Brian, you and I were talking about this case. And the suit was moving forward. There was going to be a trial. It was going to start today. Now there's a tentative deal? What can you tell us?
BRIAN MANN, BYLINE: Yeah. Well, first of all, they were very sneaky, and they did these talks through the weekend and through this morning behind closed doors. So this was a surprise to everybody. But yes, there is a tentative deal now. And it's with four companies involved, three of the major drug distributors in the country, including McKesson and Cardinal Health - also the drug maker Teva. And what they've agreed to do is pay out about $300 million in total. That's cash but also some medical supplies that they're going to donate. What's interesting here is that this only involves two Ohio counties, right? This is not a global national deal. This is only for Summit and Cuyahoga County - counties. And so this leaves some big questions about what this will mean for the rest of the country.
MARTIN: Right. So - and I want to ask about that in a minute. But first, if four companies are part of this settlement, does that mean the remaining two are still going to trial?
MANN: What's going to happen now - so Walgreens and one other firm essentially severed from this deal and also severed from this trial. So this trial is not now going to go forward. What will happen is that they will be bundled together with all of the thousands of other lawsuits that are still unresolved that will go forward. And, essentially, there will still need to be some future test case to determine their liability and also the larger liability for the entire pharmaceutical industry.
MARTIN: I mean, all - it's my understanding that all of the companies have been pushing for some kind of settlement because, presumably, going to trial just makes them look worse in some way.
MANN: Yeah. So it's terrible PR. What's come out through this litigation over the last year has been devastating for the pharmaceutical industry - internal documents, emails that have shown a lot of alleged wrongdoing. So that's bad. The other thing that's happening here, Rachel, is that these companies are scrambling to find a global solution, right? We're talking hundreds of millions of dollars here for just two relatively small Ohio counties. You multiply that by all the counties in the country hit by this opioid epidemic, and it's sort of death by a thousand cuts.
So by settling this now, what these companies do is buy themselves some time to go back to the bargaining table with state attorneys general and others and try to hash out something on the scale of the tobacco deal of the 1990s that really puts this all behind the industry. They didn't get that done here. It's still just a local deal. But it does buy them more time to go back to the bargaining table.
MARTIN: Wow. At this point, Brian, do you have any sense of where all of that money that is - that's been agreed to in these settlements - where it's going to go? I mean, you mentioned it's just these two counties.
MANN: Yeah. So Summit and Cuyahoga counties have begun talking about how they're going to spend this money and - you know, rehab clinics and law enforcement and foster care programs - all the different social service programs that have been hit hard by the opioid epidemic. And what's also going to be happening now is thousands of other communities around the U.S. are going to be sort of reading the tea leaves. If these two counties were able to get this much relief by suing, should we sue, too? Should we sign on to these big, consolidated federal cases that are moving forward? So really, in terms of the policymaking, how the opioid epidemic is going to be treated, this is just another sort of data point that everybody now is going to be kind of figuring out.
MANN: All right. Brian Mann with North Country Public Radio. He covers opioid litigation. Brian, thanks. We appreciate it.
MARTIN: Thank you, Rachel. Transcript provided by NPR, Copyright NPR.