Judge calls for settlement conference in opioid case

CLEVELAND — The fiveyear legal battle over responsibility for the U.S. opioid epidemic is at a crucial juncture as drug company chief executives, state attorneys general and lawyers for 2,600 cities and counties meet today to discuss a potential resolution of the landmark litigation, people familiar with the matter said.

With a federal jury already sworn in and opening arguments in the high-stakes trial scheduled for Monday, U.S. District Judge Dan Aaron Polster summoned all sides to his courtroom. His involvement could signal that negotiations are progressing to a potential settlement that could avert a two-month trial. That proceeding seeks billions of dollars from six drug companies to pay for the fallout from the drug crisis.

CEOs of the major companies are expected to be present — an unusual circumstance for a settlement conference. Attorneys general of North Carolina, Pennsylvania, Texas and Tennessee also will participate, along with the lead lawyers for the counties, cities, American Indian tribes and other groups that have filed suit against the drug companies.

They will discuss a settlement currently valued at about $50 billion in cash and drug treatment medications, according to those close to the negotiations who spoke on the condition of anonymity because the talks are at a critical stage.

Both sides have much to gain from a negotiated settlement, which Polster has encouraged for nearly two years. For states, cities and counties, a deal would speed badly needed cash and medication to communities that have been paying for drug treatment, emergency services and law enforcement related to the crisis. An agreement would avoid years of delay connected to multiple trials and subsequent appeals.

The companies would end thousands of lawsuits that are costing them millions of dollars in legal fees and continuous negative publicity. Trials in open court also could bring out additional damaging information about how they handled narcotics.

But the deal has yet to win approval of the lawyers in charge of the city and county lawsuits. “We await the fine print of the settlement framework so that we can work alongside the 2,600 communities we represent to determine the best path forward,” they said in a statement released Wednesday night. “Our priority when assessing settlement proposals is to ensure they will provide urgently-needed relief in the near term and that these resources will be directed exclusively toward efforts to abate the opioid epidemic.”

Complicating the negotiations is public feuding over control of the litigation between the states and municipalities. Ohio Attorney General Dave Yost, supported by several other states, unsuccessfully argued in appellate court to stop the federal litigation and give control of the issues to state attorneys general.

On Thursday, Polster swore in a jury of six men and six women after a selection process that took little more than a day.

The companies involved in the settlement talks include drug distributors McKesson Corp., Cardinal Health and Amerisource Bergen, Israel-based drug manufacturer Teva Pharmaceuticals and Walgreens. All five are defendants in the upcoming trial, in which two Ohio counties are seeking more than $8 billion to cover their costs.

It was not clear Thursday whether the sixth defendant, Henry Schein Medical, which distributed a small number of opioids to one Ohio County, is participating in the talks.

Meanwhile, a new report estimates the epidemic has cost the U.S. economy at least $631 billion — and that more than two-thirds of that toll fell on individuals and the private sector.

A study released this week by the Society of Actuaries identified which parts of the economy have suffered the most from one of this century’s worst public health crises. The actuaries found that the epidemic’s biggest costs stemmed from the unrealized earnings of those killed by the highly addictive painkillers and health care expenditures during the four-year study period ending in 2018. They also projected that the 2019 price tag would range from $172 billion to as much as $214 billion.

According to the actuaries’ analysis, nearly one-third — $205 billion — of the estimated economic burden was pinned to excess health care spending for people with opioid-related disorders. Premature mortality costs accounted for 40% — $253 billion — of estimated losses, mainly due to lost lifetime earnings for people who died from overdoses.