PHILADELPHIA – A proposed $26 billion settlement with opioid distributors and manufacturers which would benefit a group of states including Pennsylvania, has come under fire from Philadelphia District Attorney Larry Krasner – who feels the City’s compensation would be undervalued in the agreement, wants to continue litigating and has filed his own lawsuit seeking to preserve that right.
The settlement, negotiated by attorneys general from Pennsylvania, North Carolina, New York, Delaware, Louisiana, Tennessee and Connecticut, would see pharmaceutical distributors Cardinal, McKesson and AmerisourceBergen pay up to $21 billion over an 18-year period, and manufacturer Johnson & Johnson pay up to $5 billion over a nine-year period.
Pennsylvania Attorney General Josh Shapiro stated that the settlement would see the state receive a total of $1 billion over 18 years.
The settlement would resolve the claims of both states and local governments nationwide, including almost 4,000 which filed lawsuits in federal and state courts.
States now have 30 days to agree to the deal, and local governments in those states will have up to 150 days to sign on. Those states and local governments will receive maximum compensation if they band together in support of the agreement.
The majority of the settlement money is to be spent on opioid addiction treatment and prevention, and accompanying injunctive relief will see corporate safeguards put in place to more stringently regulate opioid production and distribution from the defendants, and ensure the circumstances which led to the opioid crisis are not repeated.
“No amount of money, no number of sanctions, will be able to right these wrongs. But this settlement puts in place controls that will go a long way to make sure that this never happens again, and the money that will come to Pennsylvania will help offer and expand life-saving treatment options across our Commonwealth,” said Shapiro.
“We expect broad support for this agreement from attorneys general of both parties. As a group, we know two things to be true: the cost of this epidemic is immense – far more than this deal, and this agreement is the best way to deliver the most help to communities in need, right now. This action sends a message to drug distributors and pharmaceutical companies that we won’t accept this behavior, and that we’re here to always fight for the people we serve.”
But in Philadelphia, Krasner is not satisfied with the proposed arrangement and neither is Mayor Jim Kenney.
Both officials have publicly criticized the opioid settlement reached by the state attorneys general, and Krasner filed suit against Shapiro’s office on Thursday in the Commonwealth Court of Pennsylvania – seeking that court to provide declaratory and injunctive relief to preserve the City of Philadelphia’s lawsuit against opioid distributors and manufacturers.
That underlying litigation from the City, brought under the state’s Unfair Trade Practices and Consumer Protection Law, has been ongoing since 2018. It numbers among dozens of others filed locally against opioid drug companies, which are all being overseen by the Delaware County Court of Common Pleas in Media.
The District Attorney’s Office calculated that under the settlement, Philadelphia would likely receive only $5 million to $8 million per year over the aforementioned 18-year period, with no guarantee that the City would receive these payments over the long term, if at all.
In a statement, Krasner labeled the settlement’s terms as “unacceptable.”
“It’s deeply troubling that the AG’s Office seeks to end our lawsuit when it never even filed one against Cardinal Health, AmerisourceBergen, McKesson, as well as the drug manufacturer Johnson & Johnson. It’s also troubling that the AG’s Office seeks to allow these opioid defendants to escape real accountability,” Krasner said.
“The proposed settlement announced yesterday is unacceptable: Any money Philadelphia receives from it will be too low in amount, too slow in payment, or a no-show – it may not even arrive in Philly. We were forced to file suit against the AG’s Office to make clear that Philadelphia’s people, its rights, its elections and the decisions made by the officials Philadelphia elects matter.”
Krasner added that cities and municipalities in other states are taking opioid distributors and manufacturers companies to court, while winning verdict awards that “must be paid quickly and are guaranteed.”
Oklahoma won a $572 million award against opioid companies in 2019 (ultimately reduced to $465 million) and a $325 million settlement was agreed upon in an Ohio court the day prior to trial, that same year.
Krasner’s suit alleges that Shapiro’s office has overstepped its authority in attempting to end Philadelphia’s litigation against opioid defendants.
Kenney concurred with Krasner, feeling that there was no guarantee the settlement funds would reach Philadelphia, a city deeply impacted by the opioid crisis.
Last year alone, more than 1,200 overdose deaths occurred in the City of Brotherly Love. It stands as the second-most number of annual overdose deaths on record.
“There can be no dispute that Philadelphia has been hit particularly hard by the opioid epidemic, with overdoses involving opioids a leading cause of death in our city. Resources to address this public health crisis are immensely important. However, at first look, the money provided for in the settlement is too little and will be paid over too long a period of time. We do not even know how – or if – Pennsylvania’s money would be distributed to Philadelphia,” Kenney said.
“We are extremely disappointed that the attorneys general have negotiated a proposed settlement without providing Philadelphia and other communities that have been most directly impacted by the crisis a meaningful voice and opportunity to participate. Local governments like Philadelphia have been on the frontlines of this pandemic, and we demand meaningful engagement and a significant allocation of any settlement. We have been fighting to hold opioid manufacturers and distributors accountable for several years and we will continue to do this important work.”
Meanwhile, Shapiro’s office expressed confusion with Krasner’s lawsuit and Philadelphia’s intention to roll the dice at a future trial, with no guaranteed measure of success.
“We’re puzzled that the Philadelphia District Attorney would take less than 24 hours to analyze a complex nationwide framework before suing our office and misrepresenting the facts to Pennsylvanians,” Attorney General’s Office spokesperson Molly Stieber said.
“The proposed settlement has not even been agreed to – that will take 150 days – but it is the only way to jumpstart a billion dollars’ worth of treatment for communities in need any time soon. The alternative is to make families wait years for an uncertain outcome that could leave them with nothing. These other lawsuits have no trial date, nor a guarantee that any success in those cases would expand treatment – unlike this proposed settlement.”
The Attorney General’s Office added the proposed settlement does not prevent any municipality or city from continuing litigation, if they choose not to enter it.
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com