Four major pharmaceutical companies have agreed a multimillion-dollar payout over the US opioid epidemic, hours before a federal trial in Ohio in which they were to be accused of a conspiracy to profit off of addiction and death.
Teva Pharmaceuticals, the largest manufacturer of generic drugs in the world, and three drug distributors, among the biggest corporations in America, have agreed to pay a total of $260m to settle lawsuits by two Ohio counties.
The trial was intended as the first of a series designed to establish whether opioid makers, drug distributors and pharmacy chains are liable to pay out billions to thousands of counties, cities and Native American tribes blighted by an epidemic that has claimed more than 400,000 lives over the past two decades.
Lawyers involved with the negotiations say Monday’s last-minute agreement may lead to a more comprehensive settlement covering lawsuits by more than 2,600 communities after talks over a $50bn deal collapsed on Friday.
But the Ohio trial was expected to proceed because the agreement did not cover a fifth company, the Walgreens pharmacy chain.
The plaintiffs are using anti-racketeering laws, originally written to go after organised crime, and allegations of creating a public nuisance to claim that manufacturers of narcotic painkillers aggressively drove up sales with knowingly false claims that they were less addictive and more effective than they were, leading to a huge surge in prescribing.
They also allege that distributors and pharmacies ignored legal obligations to restrict delivery and dispensing of the drugs even as the death toll escalated, because they were making so much money.
“The facts will show that opioid makers and distributors conspired to create and benefit from the worst public health crisis in decades,” the lead lawyers for the plaintiffs said in a statement.
The other companies that settled included the drug distributors McKesson and AmerisourceBergen, both among the top 10 revenue-generating companies in the US.
Activists are pressing for a much larger comprehensive settlement than the proposed $50bn. A new study has found that the epidemic has cost the US more than $800bn in the last four years alone. The Society of Actuaries said the costs ranged from increased health and social care spending to loss of earnings by people who have died and pressure on the criminal justice system.
Activists also want to see the drug industry exposed at trial. Pharmaceutical companies are pressing for internal documents revealing their decisions and actions to remain secret as part of any settlement.
“We need hundreds of billions of dollars to deal with this crisis,” said Emily Walden, chair of the Fed Up coalition of families hit by the epidemic and doctors who have spoken out against the wide prescribing of opioids. “The settlement talks are not holding these companies accountable for what they’ve done. $50bn is pocket change to them.”
Several major opioid manufacturers settled the Ohio case in recent weeks, including Johnson & Johnson which lost a major trial in an Oklahoma state court in August when a judge found the company’s drive to sell opioids with false claims caused addiction and death.
Opioid makers and distributors have already paid out hundreds of millions of dollars to settle federal cases accusing them of failing to obey laws about cutting off deliveries to pharmacies dispensing suspiciously large amounts of prescription painkillers. But the companies made no admission of liability in paying the settlements.
Walden said she wants to see the trial lead to the prosecution of executives responsible for marketing and other strategies that boosted opioid sales.
“It’s pretty clear what happened and what they’ve done,” she said. “We need some accountability and it needs to lead to criminal charges. They’re getting away with murder. They’re buying their way out. They think that’s the way of doing business.”
There have been some criminal prosecutions.
In July, federal prosecutors charged three top executives of the drug distributor Miami-Luken with illegally flooding parts of Appalachia with millions of opioid pills. In May, John Kapoor, the 75-year-old billionaire founder of Insys Therapeutics, was convicted for bribing doctors to prescribe a powerful opioid, Subsys, to patients who did not need it.
Separately, Purdue Pharma, maker of the powerful opioid OxyContin, which played a leading part in firing up the epidemic, is negotiating to end hundreds of lawsuits.
The company has filed for bankruptcy as part of a proposed agreement that would see it put into a trust and future profits go toward alleviating the epidemic. Members of the Sackler family who own the company would also pay from the personal fortunes they have built from the sale of OxyContin.
But the deal is opposed by several state attorneys general who want to see the company put out of business and the Sacklers, who are estimated to have made more than $12bn from opioids, pay more money.