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 The proposal would bring an end to all opioid litigation against
AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp,
drugmaker Teva Pharmaceutical Industries Inc, and Johnson & Johnson.
The companies have proposed paying $22.25 billion cash mostly over
18 years, while services and drugs to treat addiction valued at $26
billion by the companies would be provided over the coming decade,
mostly by Teva.
Officials in states such as Ohio, New Hampshire and West Virginia --
all hard hit by the deadly drug addition crisis -- voiced concerns
about the proposal.
James Boffetti, the associate attorney general for New Hampshire,
said in an interview he was troubled that payments were stretched
over many years.
"The concern is, I think, the states need money now to create the
infrastructure for treatment," he said.
Small states fear the money will be divvied up by population rather
than need.
"Any global opioid settlement that doesn't reflect the unique and
unprecedented damage imposed on West Virginia through the opioid
epidemic should be DOA," West Virginia Attorney General Patrick
Morrisey said on Twitter on Tuesday.
Some 400,000 U.S. overdose deaths between 1997 and 2017 were linked
to opioids, according to government data. Roughly 2,600 lawsuits
have been brought nationwide by states, local and tribal
governments.
The three distributors in a joint statement said they were committed
to finalizing a global settlement and would continue working with
the other parties on the details of the framework. Teva declined to
comment.
J&J said in a securities filing on Wednesday the deal would lower
third quarter profit by $3 billion.
The proposal, announced on Monday, was hammered out by the companies
and attorneys general in North Carolina, Pennsylvania, Tennessee and
Texas.
It will need broad support among state attorneys general and will
have to overcome opposition from the lawyers representing local
governments that sued. Those lawyers declined to sign on when
presented the proposal last week.
Under the settlement framework, money for each state would be
divvied up, with 15% going to the state treasury, 15% for local
governments that filed lawsuits and 70% going to a proposed state
fund aimed at addressing the crisis.
Boffetti predicted it would takes weeks for states to determine
whether they back the settlement framework.
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North Carolina's attorney general, Josh Stein, acknowledged that a
detailed term sheet needs to be developed.
"There are a lot of details and mechanics that need to be added to
it," Stein told Reuters in an interview. "That will happen in the
coming weeks."
The proposal did win a major supporter on Tuesday. Tom Miller of
Iowa, the longest-serving attorney general, publicly backed the
proposal, calling the framework "an important step in addressing the
crisis."
Colorado's attorney general, Phil Weiser, called it a "very
promising development."
The lawsuits accuse distributors of failing to flag and halt a
rising tide of suspicious orders and drugmakers of overstating the
benefits of opioids while downplaying the risks.
The companies have denied any wrongdoing. Drugmakers say their
products carried government-approved labels that warned of the
addictive risks of opioids, while distributors argue their role was
to make sure medicines prescribed by licensed doctors were available
for patients.
The proposed deal has widened a fault line between attorneys general
and local governments.
Cities and counties generally hired private attorneys to bring their
cases, and attorneys general want to limit the amount of the
settlement that goes to pay private lawyers. The attorneys for local
governments also generally opposed Teva contributing opioid
treatment drugs to the settlement, instead of cash, in part because
of concerns that the framework placed an inflated value on those
drugs.
Last week's talks failed to reach a global deal, and on Monday, the
three wholesale distributors and Teva struck a last-minute $260
million settlement with two Ohio counties, averting the first
federal trial over opioids.
North Carolina's Stein said he looked forward to resolving concerns
about the proposal and warned that settling lawsuits individually
was unsustainable.
"If we proceed on the current path and each county and city brings
their case and extracts whatever amount they may be able to get from
these companies, the companies will end up bankrupt," he said. "The
opioid crisis is a national problem that demands a national
solution."
(Reporting by Tom Hals in Wilmington, Delaware and Nate Raymond in
Boston, Massachusetts; Editing by Noeleen Walder and Sandra Maler)
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