Paul Hanly, a lead lawyer for the municipal governments, said late Friday afternoon that, “We have had a long day of discussions with the attorneys generals and the distributors and with the judge who is, as usual, extremely helpful.”
But, he said, “There is no settlement,” adding that a trial set to begin Monday was still on course.
Chief executives for the three major drug distributors were summoned to the Federal Reserve courthouse here in Cleveland today by Judge Dan A. Polster, who was attempting to wrest a last-minute, comprehensive settlement to resolve thousands of cases filed by local governments as well as those filed by state attorneys general in state court.
Under discussion was a deal worth nearly $50 billion in cash and addiction treatment medicine and services. It would require the three distributors to pay $18 billion over 18 years.
It was unclear at day’s end how far apart the sides were, and informal discussions might continue over the weekend. People familiar with the talks said that the state attorneys general viewed the offer more favorably than did the plaintiffs. The states’ lawyers would not comment.
Hanly characterized the offer as too little and over too long a period of time. But he was one of the few engaged directly in the negotiations who would speak publicly.
Adding to the pressure-cooker atmosphere was the specter of 12 jurors, whom Polster had sworn in Thursday, in anticipation that opening statements would begin as scheduled Monday. Inexorable moves such as these can often prod the sides to the desired result: settlement.
Friday’s extraordinary sessions included not only top executives from the drug distributors, which are Fortune Top 20 companies, but state attorneys general from Texas, Pennsylvania, North Carolina and Tennessee; lawyers for more than 2,300 opioid lawsuits filed by cities, counties and tribes nationwide; and delegates from cities large and small that have been devastated by the two-decade long epidemic. More than 400,000 people have died in that time.
Also in court were executives representing Walgreens, the pharmacy chain; Teva, the Israeli-based manufacturer of generic drugs; and Henry Schein Medical, a small drug distributor.
Companies reached for comment either declined to do so or did not respond to messages.
Other people familiar with the negotiations said that discussions with Teva had so far yielded a “small cash contribution” of several hundred million dollars.
Paul Farrell, another lawyer on the plaintiffs’ team, said that discussions with Walgreens, which is being sued in the forthcoming trial for its role as a distributor of opioids to its own pharmacies, “were not fruitful.”
The case at the center of Monday’s trial was brought by two Ohio counties, Cuyahoga and Summit, although the negotiations contemplated a settlement that would resolve thousands of other cases around the country. The Ohio trial is considered a powerful litmus test for all the parties.
The defendant distributors — AmerisourceBergen, Cardinal Health and McKesson — along with other companies had been mulling a megadeal that earlier this week was estimated at nearly $50 billion.
There are many more drug industry defendants, including the pharmacy chains Walmart, Rite Aid and CVS, in the far-flung web of litigation. But now that Purdue Pharma’s tentative deal is caught up in a lengthy bankruptcy court review, a global settlement would be the first in the national opioid litigation.
Plaintiffs’ lawyers say a wide-ranging settlement could have a domino effect on the remaining defendants, encouraging them to reach a comprehensive deal too.
But people familiar with the state of play Friday in Cleveland suggested that the existing obstacles could lead to a much narrower outcome, with only the Ohio cases settling, rather than a global resolution.
A major sticking point, said some members of the local governments’ legal team, was that the distributors would not estimate the losses suffered by West Virginia communities, saying that the state itself had already settled with the three distributors for about $73 million.
A signature tension in the talks to date is how to allocate any money from the settlement, with local governments wary of ceding that power to the states.
Farrell said that, “the attorneys general are deciding among themselves how to allocate the money.” He and Hanly turned aside the question of whether their own fees were a stumbling block, a conflict raised in private by other parties.
“That hasn’t even come up yet,” Hanly said.
But another person familiar with the talks disputed that account, saying that states and counties were intent on working toward getting money to distressed communities.
Another issue in the talks is public transparency: If the companies reach a settlement, plaintiffs’ lawyers want to ensure that records of what transpired during the years of one of the country’s greatest public health crises are unsealed.
Throughout the day, parties caucused in separate rooms on two floors, as negotiators, including Polster shuttled among them.
Clusters of lawyers and public relations managers paced back and forth, muttering in hallways, cellphones glued to their ears. They would have jaunty expressions, radiating confidence, but then a phone would ring and faces would abruptly turn dour. Then another phone would ring.
Steve Williams, the mayor of Huntington, West Virginia, a small city staggered by opioids, seemed frustrated.
“We put drug dealers in the alleys in jail, and there are these drug dealers sitting here in board rooms and now we’re just talking about money? We’re angry in Huntington,” Williams said. “If there was not a single tablet distributed again and not another gram of heroin, we would still be dealing with the aftereffects for four decades.”
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