Ohio Balks at Endo, Allergan Opioid Deals as Trial Approaches
Ohio Balks at Endo, Allergan Opioid Deals as Trial Approaches
(Bloomberg) -- Ohio’s top law-enforcement official warned Endo International Plc and Allergan Plc he hasn’t agreed to back their proposals for settlements totaling about $16 million to avoid trials in the first federal cases to be heard by juries over the public-health crisis caused by opioid painkillers.
Ohio Attorney General Dave Yost said in separate letters to the drug companies that their tentative deals with two counties in the state won’t resolve the state’s allegations that Endo and Allergan wrongfully marketed their opioid-based pain medicines.
“No settlement with any political subdivision relieves Endo of any liability to the state for any claim that Ohio has brought,’’ Yost said in the Aug. 20 letter. He added that the “nuisance value settlement’’ only addresses “municipal costs paid directly by the political subdivisions.”
Yost and fellow state attorneys general are at odds with lawyers for cities and counties who’ve sued to recover tax dollars spent on the fallout from the epidemic. Opioids were involved in 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention.
The attorneys general contend they should have control of any settlements generated by opioid litigation since they represent entire states. The cities and counties want to ensure they get recoveries as reimbursement and not have it diverted to state uses.
Heather Zoumas Lubeski, an Endo spokeswoman, didn’t immediately respond to a phone message seeking comment on Yost’s letter. Fran DeSena, an Allergan spokeswoman, also didn’t respond to phone and email messages.
Allergan announced Aug. 20 it agreed to pay $10 million and donate $1 million of diabetes and allergy drugs to resolve claims by two Ohio municipalities that the company helped fuel the U.S. opioid epidemic by illegally marketing its Opana painkiller.
The day before, the Wall Street Journal reported that Irvine, California-based Allergan was in talks to settle the two Cleveland cases for about $5 million. Allergan officials declined to comment on the newspaper’s report.
Frank Gallucci III, a Cleveland-based lawyer representing one of the counties whose cases are coming to trial in October, confirmed in an interview this week that there’s a tentative settlement agreement with Allergan. He declined to provide any details.
The battle over the opioid litigation harks back to a nationwide 1998 settlement with tobacco makers, which generated a total of $246 billion. City and county officials complained the states grabbed most of that money and didn’t give them a fair share. That’s why about 2,000 local governments filed separate suits in the opioid litigation.
Those suits have been consolidated before U.S. District Judge Dan Polster in Cleveland for pre-trial information exchanges and test trials. He’s scheduled suits by Cuyahoga and Summit counties as the first to go to trial, in October.
Polster also is weighing a proposal to set up a class covering more than 33,000 local governments so they can join together to help negotiate a global resolution to opioid claims. Yost and other attorneys general have objected, saying it usurps their powers to represent their states.
The consolidated case is In Re: National Prescription Opiate Litigation, 17-md-2804, U.S. District Court, Northern District of Ohio (Cleveland).
To contact the reporters on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net;Katherine Doherty in New York at kdoherty23@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Blumberg, Peter Jeffrey
©2019 Bloomberg L.P.