Across the US, hundreds of attorneys representing cities, counties, states and small towns, have filed lawsuits against opioid makers (such as Perdue Pharma) and distributors (including such everyday names as Walgreens. All of these lawsuits point blame at the various players for helping escalate the opioid addiction epidemic and seek monetary compensation.
Now, attorneys have decided that they want to piggyback on the lawsuits in the state of Ohio, to consolidate their complaints and gain access to settlements quickly.
What Will a Blanket Opioid Settlement Do?
It’s not clear what the specifics of the settlement will do for plaintiffs. The plan proposed last week doesn’t list a specific a dollar amount for the blanket settlement, but most likely the lawsuits will cost into the billions. Insys Therapeutics, an opioid manufacturer, recently settled federal criminal and civil fraud charges to the tune of 225 million dollars after being accused of bribing doctors to prescribe the powerful opioid fentanyl to pain patients.
If there is a blanket settlement, nearly 24,000 local governments would be able to receive desperately-needed cash infusions to help cope with the aftermath of the pharmaceutical industry’s manipulative behavior. Critics of the pharmaceutical companies say they inflated the benefits of drugs like fentanyl and Oxycontin, minimizing the danger of addiction and suggesting that doctors prescribe them for off-label purposes.
The jurisdictions involved would have to rely on the courts to decide how much money each complainant will receive from a consolidated settlement.
Can Pharma Companies Afford to Settle?
There is worry that a blanket settlement would end up unpaid by the companies involved in lawsuits. Three days after Insys settled, they filed for Chapter 11 bankruptcy, stating that they will need to sell all of their assets to pay about $250 million in debts. If the bankruptcy is approved, the government likely won’t get the full payout due to other debt obligations.
It’s also unknown which pharmaceutical players would be added to the lawsuits and how much money they will be capable of paying out as settlements. It’s likely that additional distributors and manufacturers will end up in bankruptcy court as well, which will limit the payouts available to states, cities, and counties. A judge will decide the next steps towards consolidating the suits in Ohio, where the litigation is currently taking place.