With a federal jury already sworn in and opened arguments in the high-stakes trial on Monday, U.S. District Judge Dan Aaron Polster summoned all sides to his courtroom. His commitment may signal that the negotiations are moving on to a potential settlement that could avert a two-month trial. The procedure seeks billions of dollars from six drug companies to pay for the fallout of the worst drug crisis in US history.
It is expected that the CEOs of the large companies ̵
1; an unusual circumstance for a settlement conference. Attorneys general in North Carolina, Pennsylvania, Texas and Tennessee will also participate, along with chief attorneys for the counties, cities, Native American tribes and other groups that have filed lawsuits against the drug companies.
They will discuss a settlement currently valued at around $ 50 billion in cash and drug treatment medication, according to those close to the talks that talked about the condition of anonymity because the talks are at a critical stage.
Both sides have much to gain from a negotiated settlement, which Polster has encouraged for nearly two years. For states, cities and counties, a deal would urgently need cash and medicines for communities that have paid for medical care, emergency services and law enforcement related to the crisis. An agreement would avoid years of delay related to multiple lawsuits and subsequent appeals.
The companies would end thousands of lawsuits that cost them millions of dollars in attorney fees and continuous negative publicity. Open court litigation can also provide additional damaging information about how they handled narcotics.
But the agreement has not yet obtained the approval of the attorneys responsible for the cases in the city and county. "We are awaiting a little pressure on the settlement framework, so we can work with the 2,600 communities we represent to determine the best path forward," they said in a statement released Wednesday night. "Our priority when considering settlement proposals is to ensure that they will provide emergency relief with short-term relief, and that these resources should be directed solely to attempts to reduce the opioid epidemic."
Another disadvantage may be the fees for the private attorneys. which would require a significant portion of any settlement after years of work with the lawsuits.
On Thursday, Polster swore in a jury of six men and six women following a selection process that took little more than a day. Opening arguments are scheduled for Monday.
The companies involved in the settlement talks include mammoth drug distributors McKesson Corp., Cardinal Health and Amerisource Bergen, Israel-based drug manufacturer Teva Pharmaceuticals and Walgreen. All five are indicted in the upcoming lawsuit, with two Ohio counties seeking more than $ 8 billion to cover their costs.
It was not clear Thursday whether the sixth defendant, Henry Schein Medical, who distributed a small number of opioids to one Ohio county, is taking part in the talks.
According to the current settlement proposal, distributors would pay $ 18 billion over 18 years to be shared between states, counties, cities and other groups, according to people familiar with the discussions. . They seem to have enough resources to cover such a deal. Documents submitted to the Securities and Exchange Commission show that McKesson has approximately $ 1.95 billion in cash and cash equivalents available. Cardinal has $ 2.5 billion and AmerisourceBergen has $ 3 billion.
Federal law and regulations make wholesale distributors – intermediaries between manufacturers and dispensers – the gatekeepers for narcotic power in the United States. They are responsible for identifying suspicious orders from painkillers, stopping shipments and notifying authorities.
Teva would contribute almost all of its settlement in the form of free drug addiction and other drugs, as well as a small sum, considerably less than $ 1 billion, according to a person with knowledge of the discussions.
A critical element is the participation of Johnson & Johnson, which will pay around $ 4 billion to resolve the remaining lawsuits against it, according to two sources familiar with the negotiations. The discussions centered on the fact that the company paid most – and perhaps all – of that money over the course of two years. The health care giant settled earlier this month with the counties in Ohio for $ 20.4 million.
Representing the states Friday will be two Republican and two Democratic attorneys, people say. Republicans are Herbert Slatery of Tennessee and Ken Paxton of Texas; Democrats are Josh Stein of North Carolina and Josh Shapiro of Pennsylvania. Proponents of Shapiro, Stein and Paxton declined to comment. Slatery did not immediately respond to a request for comment.
Lawyers for the local plaintiffs include Joseph F. Rice, Paul T. Farrell Jr., Paul J. Hanly Jr. and Troy Rafferty.
The drug industry has faced numerous lawsuits from governments and other groups claiming that the companies are responsible for the worst drug crisis in US history. During the opioid epidemic, about 200,000 people have died from prescription drug overdoses, and another 200,000 have succumbed to illegal street drug overdoses, mainly heroin and fentanyl, over the past two decades.
Lawsuits brought by cities, counties, Native American tribes and other nationwide groups have been consolidated in a mammoth trial for several districts in the upholstery courtroom. The Cuyahoga and Summit cases are part of the trial designed to determine how both sides can handle the lawsuit.
Individually, the defendant has sued a wide variety of drug companies in state courts. The drug companies that deal with a mass settlement have generally insisted that it covers both state and federal litigation.