Updated: August 2022
IN RE: NATIONAL PRESCRIPTION OPIATE LITIGATION
Case Overview
Entities in every link in the chain of opioid drug production have been accused of fueling the nation’s opioid crisis for monetary benefit. Plaintiffs seek compensation for the large amount of money they have spent coping with healthcare and crime issues dating back to the 1990s. In perhaps the most complex civil litigation to ever exist in the US, recently over 2,000 pending lawsuits from across the country have been consolidated under one single federal judge, Judge Dan Polster, into a multi-district litigation (MDL). The purpose of this MDL is to guide pretrial motions and keep the multitude of proceedings on the same trajectory. There are also many cases, including those brought by the States’ Attorneys General that are outside the MDL.
Most Recent Progress
Judge Polster has plotted several bellwether trials across the US, which will test the ability of different sets of plaintiffs to sue different sets of defendants. The bellwether case that was expected to go to trial in October of 2019 settled with the defendants and is awaiting final approval from the court.
The Judge has selected five additional bellwether trials that will be held throughout the country, testing local governments’ allegations against pharmacy defendants. The first of these trials began in October 2021 in Ohio. Pharmacy defendants are the main group of defendants that have yet to settle with the cities and counties.
On July 21, 2021, the top three drug distributors-AmerisourceBergen, McKesson, and Cardinal Health-along with drug-maker Johnson and Johnson, announced a $26 billion “global settlement” that would resolve most of the suits brought against them from the government. This settlement affects the local governments (cities and counties) within the MDL, as well as the individual States.
In February 2022, the “global settlement” was finalized. Though, there are numerous cities, counties, and states that have stated they do not agree to the settlement amount and allocation of funds, and will be pursuing their own litigation against the defendants separately.
The “global settlement” will not affect the trials or proposed settlements of other plaintiff groups, including Native American Tribes, third-party payors and hospitals. It is expected that the funds from this settlement will go directly to the government for abatement purposes.
Judge Polster has already agreed that a set of union benefit plans, in addition to a hospital out of Florida, can go forward with their suits, selecting these cases as bellwethers for third-party payor and hospital claims, respectively.
Lawsuits and Settlements Outside of the MDL
Outside of the MDL, we are taking note of settlement agreements at the local level, state level, and sometimes a hybrid that encompasses both. There are numerous settlements that have arisen from the State Attorneys’ General actions, specifically for states hit the hardest from the opioid epidemic-Kentucky, West Virginia, Oklahoma, New York, and Tennessee have all reached settlements with several defendants. Most of these proposals will allocate money directly to the government, with little going back to businesses.
To add to the complexity of these cases, there are many disputes regarding the correct amount to assign to the costs incurred due to the opioid epidemic as well as the appropriate allocation of funds received from settlements. Different sets of plaintiffs, including the States, are all clamoring to stake their claim, each arguing they have judicial power to create new laws to solve societal problems.
The first opioid trial took place in Oklahoma in 2019 where the Court sided with Plaintiffs and awarded Oklahoma a $465 million verdict against Johnson & Johnson (“J&J”). In November 2021, just days after a judge overseeing a separate opioid trial found drugmakers not liable for creating an opioid crisis in California, the Oklahoma Supreme Court overturned the J&J verdict, stating the landmark award was based on an inappropriate interpretation regarding the theory of “public nuisance” laws. These decisions are critical because “public nuisance” laws are the main crux that underlies most cases accusing the drug companies of fueling the opioid epidemic, and the ramifications that these decisions have on additional trials and settlement negotiations remain unforeseen.
What Does This Mean?
It is expected that after the “global settlement” is finalized for states and communities, and the pharmacy bellwether cases move forward for the local governments, the Judge will allow the hospital and third-party payor tracks to proceed within the MDL. The progression of the consolidated litigation put pressure on some of the defendants into creating the “global settlement” and the bellwether trials on the docket have already put stress on defendants and their resources, signaling defendants may easily negotiate settlements with hospitals and third-party payors.
Note about Purdue Bankruptcy Settlement
You may have received a notification about the Purdue Bankruptcy Settlement. Please note that this is not a class action settlement, rather it is a notification regarding claims with respect to bankruptcy proceedings. The filing deadline to submit a claim has now passed, and claimants and creditors are currently voting on whether to approve the proposed bankruptcy plan of reorganization.
Next Steps for MCAG Clients
We are monitoring the opioid litigation closely. If any class action settlements become available as a result of the opioid cases, then we will alert all eligible clients and pursue their settlement claims accordingly.
There are many yet unanswered questions regarding the National Prescription Opiate Litigation. It has been difficult to establish the correct numbers when assessing the total costs incurred by each set of plaintiffs, which has made it even more difficult to predict the value of potential settlements.
MCAG is actively monitoring and researching all proposed and approved settlements that arise within the MDL and outside of the MDL. Our focus is examining which settlements would benefit hospitals as well as a proposed third-party payor class, which includes employers who cover medical expenses in their employee benefit pharmaceutical plans.
In the meantime, MCAG continues to monitor and research the consolidated National Prescription Opiate Litigation as well as separate State and hybrid State-Local government cases and settlements. As more government entities settle and more bellwether trials approach, it is hopeful that settlements will be reached quickly, benefiting all types of entities.