HUNTINGTON — A $260 million court settlement reached by two Ohio counties with four drug distributors and one drugmaker in the hours before a trial was to begin Monday now places Cabell County and the city of Huntington in the spotlight among a group of 2,600 other similar cases.
The two-county settlement came just three days after negotiations for a universal settlement broke down among several parties Friday. In that case, the “Big Three” drug distributors had offered $18 billion to be paid over 18 years to settle every lawsuit, but was divided based on population, which attorneys say caused it to fall apart.
The Huntington and Cabell County lawsuits specifically argue that a combination of intense marketing, national pharmacies failing to report suspicious activity and middlemen controlling pricing between drug companies and pharmacies contributed to the drug epidemic in the area.
Cabell County and Huntington, who were two of the first among local and state governments to file lawsuits against drug companies, had been in line to go to trial second to the two Ohio counties, and could now be the first, although settlement talks are expected to continue. Preliminary discovery exchange was expected to be underway Monday.
The lawsuits argue that manufacturers, distributors, pharmacies and pharmacy benefit managers breached their duty to monitor, detect, investigate, refuse and report suspicious orders of prescription opiates coming into the states over the past several years — a duty the lawsuits claim companies have under the Controlled Substances Act of 1970.
It seeks costs to help get people into recovery, as well as regaining money spent by the governments in response to the opioid epidemic. The plaintiffs also are seeking money for future recovery.
U.S. Drug Enforcement Administration data showed that, from 2006 to the end of 2016, West Virginia received 853.5 million prescription pain pills. Of those, 65 million — or about 96 per person per year — were distributed in Cabell County, with millions more going to surrounding counties.
Although now in decline, West Virginia suffered 1,017 overdose deaths in 2017, compared to 890 in 2016, 735 in 2015 and 629 in 2014. Cabell County led the state, with 157 in 2017, 92 in 2016, and 82 in 2015.
A 2017 report by the White House Council of Economic Advisers states that the opioid epidemic has cost the country more than $500 billion and killed more than 400,000 people.
Landmark opioid trial delayed after $320M in settlements made
Ohio’s Cuyahoga and Summit counties, which were to be the first to go to trial Monday, reached a $260 million dollar settlement with the Big Three distributors — AmerisourceBergen, Cardinal Health and McKesson — to pay $215 million, while drug maker Teva would contribute $20 million in cash and $20 million worth of suboxone, a drug used to treat opioid addiction.
Small distributor Henry Schein also announced Monday that it will settle with Summit County, for $1.25 million. It was not named in Cuyahoga’s lawsuit.
In the months leading up to Monday’s trial opening, the counties had settled for about $66 million, to be paid in a combination of cash and drugs. Endo International will pay $10 million, with an additional $1 million in free adrenalin and Vasostrict. Allegra will pay $5 million, Mallinckrodt $24 million in cash and $6 million in products, and Johnson & Johnson will pay $20.4 million, with $5 million going toward legal costs and $5.4 going toward nonprofit addiction programs.
The new settlements, combined with settlements with five other drug makers made previously, meant only one defendant remained scheduled to go to trial Monday, the pharmacy chain Walgreens. U.S. District Judge Dan Polster said the new plan is for Walgreens and other pharmacies to go to trial within six months, if settlements cannot be reached.
Plaintiffs’ Executive Committee co-leads Paul J. Hanly Jr., of Simmons Hanly Conroy; Paul T. Farrell Jr., of Greene Ketchum, Farrell, Bailey & Tweel LLP in Huntington; and Joe Rice, of Motley Rice LLC, said the counties had tirelessly investigated, litigated, and prepared for trial.
“In doing so, the communities revealed facts about the roles of the opioid industry that created and fueled the opioid epidemic,” they said. “Additionally, through the discovery process, we learned that this country’s pharmacy system has played a greater role in the opioid epidemic than previously realized.”
They plan to move forward with a trial against the pharmacy litigants while also working toward a global settlement for all cases.
Universal opioids settlement falls apart at last minute
The proposed universal settlement, which broke down Friday, would have been divided by population — not how hard an area had been affected by the opioid epidemic — and offered $8.9 million a year — 30 percent of which would be split between a fund set up for the attorney general and counties and 70 percent of which would go toward a recovery fund.
However, in that proposal, the Big Three argued that past settlements by the Attorney General’s Office meant West Virginia forfeited its right to the attorney general and recovery funds, leaving just 15 percent, or $1.3 million to be divided among all 55 West Virginia counties by their population.
Cabell County, for example, would receive just $135,000 per year, with Kanawha County receiving about $200,000.
West Virginia Attorney General Patrick Morrisey, plaintiff attorneys Paul Farrell and Rusty Webb, as well as Huntington Mayor Steve Williams, were in agreement that the settlement was not one the West Virginia governments wanted.
Others said the settlement fell apart because of attorney fees, which Farrell called a fabrication.
With the first trial cases being settled, for the most part, global settlement talks are expected to resume quickly.
Huntington parties react to settlement talks
Williams attended Friday’s settlement hearings and was able to speak to the court about how the opioid epidemic has affected the Huntington area.
“I said that I wanted our day in court,” he said. “The citizens of our city and people in West Virginia are saying, ‘How did this happen to us. How could this happen to us.’ I want the facts to come out. I really want us to be able to look those CEOs right in the eye.”
Webb, who represents the city of Huntington, said he appreciates the mayor’s spirit in wanting to go to trial.
“A few people were allowed to speak to the entire panel Friday,” he said. “Williams did an excellent job. He has become the symbol for the small-city fight in this country.”
Williams said he is against settling but that he would accept one that helps make sure the city is able to deal with the fallout of the opioid epidemic over the next 40 years.
“If there was a settlement that said there was not another opioid tablet that would ever be sold and a miracle that not another gram of heroin was distributed, we would still be dealing with the fallout of this mess for the next four decades,” he said. “We need to be compensated looking forward at what has to be done to dig ourselves out of this.”
Webb said the proposed settlement was disproportionate to where the opioid epidemic was felt and left the small states out of luck. He said Farrell, who represents several West Virginia counties and is co-lead attorney of the more than 2,600 cases, should be commended for not stepping down at the hearing.
“He let a group of about six or seven of us into the meeting with the attorneys general and sat down a looked them in the eye and said this does not give West Virginia the money they need,” he said. ”That was a proud moment for me.”
Webb said he believes that, with the new updates in the litigation, three tracks will now form — the Huntington-Cabell County litigation track; a global settlement track and a Huntington-Cabell County settlement track. While their eye is on a trial, settlement talks are ongoing, with Monday’s settlement now at the center.
“What the plaintiffs are doing right now are extracting how did the defendants get to this number and how would this apply to the rest of the county,” he said.