$50 billion settlement on opioids being hammered out as trial looms

CLEVELAND — As a critical trial deadline bears down, lawyers for states and the three largest drug distributors in the country, along with two manufacturers, have agreed on a framework for a deal to resolve thousands of opioid cases with a settlement worth nearly $50 billion in cash and addiction treatments.

Three people familiar with the negotiations said cities and counties across the country are tentatively supporting the broad parameters of the deal but are negotiating over its total value.

They warned details could change and the deal could fall apart before Monday, when opening statements are to begin in the first federal trial to determine responsibility for the opioid epidemic.

The agreement would release AmerisourceBergen, Cardinal Health and McKesson, which together distribute about 90 percent of the country’s medicines, along with Johnson & Johnson and Teva, the Israeli-based manufacturer of generic medicines, from a rapidly growing list of more than 2,300 lawsuits they face in federal and state courts.

All of the companies either did not return requests for comment or declined to do so.

Texas, Pennsylvania, North Carolina and Tennessee are leading the talks for the states, along with lawyers for thousands of cities and counties whose cases are in federal court.

Since the late 1990s, more than 400,000 people in the United States have died from overdoses of prescription painkillers and illegal opioids, including heroin and fentanyl. The epidemic is considered one of the greatest public health crises in the country’s history.

The three drug distributors and Teva are defendants in the first trial, brought by two Ohio counties. With thousands of somewhat similar governmental lawsuits on the national runway, the Ohio suit is considered an important showcase that will test the strength of both sides’ witnesses and legal arguments before 12 jurors.

Even as discussions continue, so does the selection of a jury, in anticipation of the start of the trial should talks collapse.

Johnson & Johnson recently settled with the two Ohio counties for about $20.4 million, but the company is named in many of other suits, as well.

Many drug manufacturers and pharmacy chains also have been named as defendants in federal and state opioids cases, but they apparently aren’t involved in these negotiations.

The maker of OxyContin, Purdue Pharma — which currently is in bankruptcy court — has a tentative and much-disputed agreement with lawyers for thousands of municipal suits in federal court and nearly two dozen states that, if finalized, would remove the company from most opioids cases as well.

According to people familiar with the talks, the combined value of the current deal breaks down as follows: $20 billion to $25 billion in cash to be divided among the states and localities to help pay for health care, law enforcement and other costs associated with the epidemic; and another $25 billion to $30 billion in addiction-treatment drugs, supplies and delivery services.

People familiar with the negotiations said many details still are being debated, including the timetable for when the money would be paid.

Whether the amount will be considered sufficient by all the plaintiffs remains to be seen.

A new report by the Society of Actuaries projects the costs related to the opioid epidemic at $188 billion in 2019 alone, including health care, child and family assistance programs, criminal justice activities and lost wages.

People familiar with the talks said a sticking point in negotiation is how much money will go toward attorneys’ fees for the private lawyers who represent governments in the overwhelming majority of cases and work on contingency.

Those lawyers filed the first opioid lawsuits in 2014 and since have conducted hundreds of depositions and compiled many millions of documents.