States are pushing drug distributors
It’s unclear if the three largest U.S. drug distributors are considering the request for a bigger payout, which would compensate governments for the billions of dollars they spent battling the public health crisis caused by the U.S. opioid epidemic. The companies declined to comment on the states’ latest request.
There’s also a complication -- not all the states are in agreement. About 18 are seeking an even bigger increase than $2.3 billion. And in a separate group of lawsuits against the distributors, many
Almost every state and several U.S. territories, along with thousands of local governments, are
“Every single state is being hit hard by Covid,” said Elizabeth Burch, a mass tort lawyer and a professor at the University of Georgia law school. “Nobody knows how long its going to last or the long-term ramifications. Anything that beefs up your budget today is going to be more attractive than it was last year, especially since they’ve added another couple of billion to the offer.”
Some leaders of the negotiating group for attorneys general --
Last year, the three big distributors and J&J made proposals to
But the majority of state attorneys general are seeking a $1.5 billion boost to the funds set aside for treatment and another $800 million increase in the legal fund, the people said.
Even before the distributors were being pushed to sweeten the pot, some analysts predicted governments would accept the lower offer.
“As states are facing increased fiscal pressure, we think they might be more willing to accept a lower lump sum, in exchange for an accelerated payment schedule,” Morgan Stanley analyst
Under the new proposal sought by the majority of states, J&J and the distributors would pay the money out over a 15-year period, accelerating the 18-year payout of the earlier bid, the people said.
Governments want at least some of the proposed settlement pot to be paid immediately, but discussions about how much would be provided upfront have yet to be resolved, the people said.
While states are asking McKesson, Cardinal Health and AmerisourceBergen for more money, the majority aren’t seeking an increase from J&J, the people said.
“J&J is smartly riding the coattails of the distributors in this deal,” said Burch, the Georgia law professor. “It’s a brilliant strategy for getting out at the lowest cost possible.”
Some plaintiffs’ lawyers who represent governments are telling their clients this may be the best deal they can get from J&J and the distributors without suffering through several years of more litigation, the people said.
But the prospect of more trials in the coming year is increasing pressure on opioid companies, Citibank analyst
So far, only Oklahoma has tried a case, persuading a judge to award the state
Another trial is set for Aug. 17 in Bristol, Tennessee, against opioid makers
The consolidated case is In Re National Prescription Opioid Litigation, 17-md-2804,
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