Pennsylvania among 7 states to reach $450 million settlement with opioid manufacturer Endo
PHILADELPHIA (CBS/AP) - Seven states, including Pennsylvania, have reached a $450 million settlement with an opioid manufacturer. Endo makes Percocet and other opioids.
The states alleged Endo deceptively marketed the drugs and downplayed the risk of addiction.
As part of the settlement, it is required to pay $450 million over 10 years as part of a bankruptcy deal, and make millions of documents available online.
Based in Ireland, Endo's U.S. headquarters are in Malvern, Pennsylvania. The company did not respond Wednesday to telephone and email requests for comment.
The agreement calls for the $450 million to be divided between participating states and communities. It also calls for Endo to put opioid-related documents online for public viewing and pay $2.75 million in expenses to publicly archive those documents.
Endo can never again market opioids, according to the agreement.
The company filed for Chapter 11 bankruptcy protection Tuesday night.
Endo produces generic opioids and name brands such as Percocet and Endocet. The company's Opana ER opioid was withdrawn from the market in 2017. The attorneys general say Endo "falsely promoted the benefits" of Opana ER's "so-called abuse deterrent formulation." The attorneys general said the formulation did not deter abuse of the drug and led to deadly outbreaks of hepatitis and HIV resulting from people injecting the drug.
Also on Wednesday, a federal judge in Cleveland awarded $650 million in damages Wednesday to two Ohio counties that won a landmark lawsuit against national pharmacy chains CVS, Walgreens and Walmart, claiming the way they distributed opioids to customers caused severe harm to communities and created a public nuisance.
U.S. District Judge Dan Polster said in the ruling that the money will be used to abate a continuing opioid crisis in Lake and Trumbull counties, outside Cleveland. Attorneys for the counties put the total price tag at $3.3 billion for the damage done to the counties.
Lake County is to receive $306 million over 15 years. Trumbull County is to receive $344 million over the same period. Polster ordered the companies to immediately pay nearly $87 million to cover the first two years of the abatement plan.
In his ruling, Polster admonished the three companies, saying they "squandered the opportunity to present a meaningful plan to abate the nuisance" after a trial that considered what damages they might owe.
CVS, Walmart and Walgreens said they will appeal the ruling. It is unclear whether the companies will have to immediately pay the nearly $87 million during their appeals.
Trumbull County Commissioner Frank Fuda praised the award in a statement, saying "the harms caused by this devastating epidemic" can now be addressed.
Lake County Commissioner John Hamercheck said in a statement "Today marks the start of a new day in our fight to end the opioid epidemic."
A jury returned a verdict in November in favor of the counties after a six-week trial. It was then left to Polster to decide how much the counties should receive from the three pharmacy companies. He heard testimony in May to determine damages.
The counties convinced the jury that the pharmacies played an outsized role in creating a public nuisance in the way they dispensed pain medication into their communities.
It was the first time pharmacy companies completed a trial to defend themselves in a drug crisis that has killed a half-million Americans since 1999.
Attorneys for the pharmacy chains maintained they had policies to stem the flow of pills when their pharmacists had concerns and would notify authorities about suspicious orders from doctors. They also said it was doctors who controlled how many pills were prescribed for legitimate medical needs not their pharmacies.
Walmart issued a statement Wednesday saying the counties' attorneys "sued Walmart in search of deep pockets, and this judgment follows a trial that was engineered to favor the plaintiffs' attorneys and was riddled with remarkable legal and factual mistakes."
Walgreens spokesperson Fraser Engerman said "The facts and the law did not support the jury verdict last fall, and they do not support the court's decision now.
"The court committed significant legal errors in allowing the case to go before a jury on a flawed legal theory that is inconsistent with Ohio law and compounded those errors in reaching its ruling regarding damages."
CVS spokesperson Michael DeAngelis said "We strongly disagree with the Court's decision regarding the counties' abatement plan, as well as last fall's underlying verdict."
CVS is based in Rhode Island, Walgreens in Illinois and Walmart in Arkansas.
Two chains - Rite Aid and Giant Eagle - settled lawsuits with the counties before trial. The amounts they paid have not been disclosed publicly.
Mark Lanier, an attorney for the counties, said during trial that the pharmacies were attempting to blame everyone but themselves.
The opioid crisis has overwhelmed courts, social services agencies and law enforcement in Ohio's blue-collar corner east of Cleveland, leaving behind heartbroken families and babies born to addicted mothers, Lanier told jurors.
Roughly 80 million prescription painkillers were dispensed in Trumbull County alone between 2012 and 2016 - equivalent to 400 for every resident. In Lake County, some 61 million pills were distributed during that period.
The rise in physicians prescribing pain medications such as oxycodone and hydrocodone came as medical groups began recognizing that patients have the right to be treated for pain, Kaspar Stoffelmayr, an attorney for Walgreens, said at the opening of the trial.
The problem, he said, was "pharmaceutical manufacturers tricked doctors into writing way too many pills."
The counties said pharmacies should be the last line of defense to prevent the pills from getting into the wrong hands.
The trial before Polster was part of a broader constellation of about 3,000 federal opioid lawsuits consolidated under the his supervision. Other cases are moving ahead in state courts.
Kevin Roy, chief public policy officer at Shatterproof, an organization that advocates for solutions to addiction, said in November the verdict could lead pharmacies to follow the path of major distribution companies and some drugmakers that have reached nationwide settlements of opioid cases worth billions. So far, no pharmacy has reached a nationwide settlement.