4.10 SR 12-20-2021 - Laserfiche WebLink

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M E M O R A N D U M T O: E LK R IVER C ITY C OUNCIL F ROM: J ARED S HEPHERD, L ITIGATION COUNSEL D ATE: D ECEMBER 13, 2021 R E: PRESCRIPTION OPIOID LITIGATION S ETTLEMENT For several years, state and local governments have been in civil litigation with manufacturers and distributors of prescription opioids related to the opioid crisis (“Prescription Opioid Litigation”). The lawsuits largely allege facts that the pharmaceutical industry has promoted opioid use to treat chronic pains at unprecedented rates, while ignoring or downplaying the addictive properties of opioids and ignoring evidence of over-prescription and misuse. The lawsuits allege that this activity resulted in mass addiction in opioid use and other illegal drugs, crime, rising health care and insurance premiums, and other costs borne by public entities, including cities. While jurisdictions impacts are unique, counties have largely experienced severe impacts on social services (such as child protection) and public health programming and cities have experienced impacts in public safety. The State of Minnesota and 26 Minnesota counties and 7 other cities filed suit against a variety of opioid manufacturers and distributors. The political subdivisions filed their lawsuits in Federal District Court, which the federal court system consolidated in a Multi-District Litigation action in Ohio. Several of the companies have filed for bankruptcy since the onset of litigation (e.g., Purdue Pharma). There are two proposed nationwide settlements (“Opioid Litigation Settlements) intended to resolve all litigation brought by state and local governments four entities: McKesson, Cardinal Health and Amerisource Bergen (Settling “Distributors”), and Janssen Pharmaceutical/Johnson & Johnson (“Settling Manufacturer”). The total settlement amount for both settlements is $26 billion. Importantly, in addition to monetary payments to abate the opioid epidemic, the settlements contains injunctive relief provisions designed to target opioid marketing and sale and distribution practices. The negotiating parties structured the monetary component to incentivize states to promote local government participation (for both litigating and non-litigating cities). The projected settlement amount for Minnesota is $250 million+. The more political subdivisions participate, however, the greater the amount of funds that flow to Minnesota and participating subdivisions. The process requires all entities participating in the settlement to sign on by January 2, 2022. If the City participates in the Opioid Litigation Settlements, it will be releasing all potential claims against the Settling Distributors and Settling Manufacturer. Over the last month or so, State and political subdivisions have worked through the allocation that will occur when settlement money flows to the state. The Attorney General’s office has consulted with various stakeholders, including litigating entities, public health officials, the League of Minnesota Cities, the Coalition of Greater Minnesota Cities, and the Association of 1