21 states rejected an $18 billion offer to settle opioid epidemic lawsuits, arguing it’s not enough

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Attorneys General in 21 states, Puerto Rico, and the District of Columbia, have all signed a letter rejecting an offer from major drug companies that would have had the companies pay some $18 billion over an 18 year period. The offer would have settled ongoing lawsuits states have filed against the companies over their involvement in the opioid epidemic. 

“Each of you has expressed that your clients seek a settlement that is global,” the letter read, according to The Wall Street Journal. “It is our collective view that the most recently communicated offer is unlikely to achieve that goal. We invite you to discuss our specific issues more fully so that a global settlement may be reached.”

As the WSJ reported Friday, the rejection marks another setback in the ongoing litigation against these major pharmaceutical companies. Cardinal Health, Amerisource Bergen, and McKesson — all parties in the rejected settlement — are the biggest drug distributors in the US and have faced criticism for not monitoring the number of prescription opioids they’ve sent out into the market, according to a previous report from Business Insider. The distributors make a profit based on how many drugs they distribute, the report said. 

Sources said states that refused to agree to the settlement have demanded between $22 and $32 billion from the drug companies, versus the $18 billion the companies offered, according to the WSJ report. 

Per the report, most of the lawsuits surrounding the opioid crisis have been consolidated in a federal court in Cleveland, Ohio, but many states have continued to pursue litigation with their own state courts. The Columbus Dispatch reported Tuesday that Ohio was close to reaching its own settlement with the pharmaceutical industry. State leaders, like Ohio Attorney General Dave Yost, have urged Ohio’s cities and counties to come together to leverage a settlement against companies that could total as much as $1 billion.

Attorneys General in states like North Carolina, Texas, Pennsylvania, and Tennessee did not sign the letter as they had a role in crafting the deal the other states have now rejected, the WSJ reported. 

Amerisource Bergen said it was “disappointed to hear that some states do not currently understand the merits of the global settlement framework that the distributors have been discussing with the attorneys’ general over the past many months,” according to the WSJ. 

McKesson told the WSJ it was working toward “finalizing a global settlement structure that would serve as the best path forward to provide billions of dollars in immediate funding and relief to states and local communities.”

A spokesperson for Cardinal Health told Business Insider “we continue to work toward a nationwide settlement that would bring substantial and immediate relief to communities impacted by the opioid epidemic.”

In addition to McKesson Corp., Amerisource Bergen Corp., and Cardinal Health, Johnson & Johnson had been in talks to pay more money not included in the proposed $18 billion settlement

A spokesperson for Johnson & Johnson pointed Busines Insider to an October 2019 statement that read its agreement to provide $4 billion is “in principle is intended to provide certainty for involved parties and critical assistance for families and communities in need. This agreement in principle is not an admission of liability or wrong-doing and would resolve opioid lawsuits filed and future claims by states, cities, and counties. The Company cannot predict if or when the agreement will be finalized.”

The letter was signed primarily by Democratic Attorneys General, though several Republicans, like Ohio’s Dave Yost, West Virginia’s Patrick Morrisey, and Florida’s Ashley Moody also added their signatures to the letter. 

Yost told The Wall Street Journal that the companies should pay more than $18 million or they should pay it more quickly than their offered 18-year time frame. 

The states hardest hit by deaths from opioid overdoses include West Virginia, Ohio, Pennsylvania, DC, and Kentucky, according to 2017 data from the Centers for Disease Control. The CDC says some 67,367 died from overdose deaths in 2018, which was down from the 70,237 who died from them the year prior. Between 1999 and 2017, more than 218,000 people died from overdoses associated with prescription opioids, according to the CDC.

While not all overdose deaths involve opioids, they are currently the driver of most fatal overdoses, the CDC said.

As Business Insider previously reported, four healthcare firms in October 2019 agreed to a $260 million settlement to stop a key case before it headed to trial last year.