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June 17, 2019

Long-Awaited Plan for Potential National Opioid Settlement Revealed

In response to the devastating national opioid crisis, attorneys for local governments filed a possible plan that could lead pharmaceutical companies and U.S. communities to a global settlement of opioid lawsuits. The plan, filed in the Ohio federal court June 14, still needs to be approved by the court, but it could aid tens of thousands of communities in recovering from the opioid addiction crisis.

Thousands of communities across the United States have filed lawsuits against pharmaceutical companies for aggressively marketing and selling prescription opioids without revealing the addictive nature of the drugs. According to the Centers for Disease Control and Prevention, over 200,000 Americans have been killed due to opioid overdoses, and opioid addiction treatment requires substantial time and funding to adequately address.

The final payouts of the proposed plan could direct billions of dollars to communities struggling with the opioid crisis, potentially rivaling the tobacco settlements of the 1990s. The co-lead counsel for attorneys filing this framework say this plan is a step towards addressing the national epidemic, and it may allow for defendant companies to reach some sort of closure to the massive numbers of lawsuits they face. While the proposal is preliminary, it could result in defendant companies reaching multiple settlements, where all the separate companies or groups of companies contribute to a national fund created to help the opioid epidemic.

The constant battle between local governments and defendant pharmaceutical companies in opioid-related lawsuits has resulted in massive company settlements. In March 2019, Purdue Pharma reached a $270 million settlement with the state of Oklahoma for its hand in the opioid crisis. But other companies, like Insys Therapeutics, have been driven to or are considering bankruptcy to handle the overwhelming wave of lawsuits. None of the defendant companies have approved the newly proposed settlement plan yet, but plan approval could restore stability to one of the nation’s largest industries.

The pressure to reach an agreement between local communities and pharmaceutical companies involved in the opioid debacle increases as more lawsuits flood into the spotlight. Companies currently being sued include Johnson & Johnson, Purdue Pharma, CVS, and Walmart, with nearly 2,000 lawsuits filed nationwide.

Under the proposed plan, almost every community in America would be consolidated into a single “negotiating class”. NPR reports that the negotiating class distinction would mean local leaders would get the right “to approve or disapprove any settlements reached with drug companies. The vote would be weighted by population.” If 75% of involved communities agree on proposed deals, they would be finalized, paid out, and the company’s liability would end. Additionally, a separate emergency fund would be created for communities seriously suffering from the opioid crisis. Co-counsel states that upwards of billions of dollars would be needed to significantly help ease the opioid epidemic, but that all hinges on defendant companies’ approvals of the plan.

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