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By Sara Randazzo
CLEVELAND -- Plaintiffs lawyers for cities and counties are demanding more money from major drug distributors, holding up a wide-ranging settlement of opioid litigation after hours of negotiations failed to result in a deal.
Top health-care executives and legions of lawyers descended on the federal courthouse here Friday for settlement talks under the guidance of U.S. District Judge Dan Polster, who called all sides to his courtroom in a last-chance attempt to strike a settlement ahead of a Monday trial.
Three drug distributors, AmerisourceBergen Corp., Cardinal Health Inc. and McKesson Corp., have offered to pay $18 billion over 18 years to resolve lawsuits filed by state and local governments seeking to blame them for helping fuel the opioid crisis, The Wall Street Journal has reported, citing people familiar with the discussions.
That amount isn't enough for cities and counties that have cases in front of Judge Polster, Paul Hanly, a lead lawyer for the municipalities, said outside of the judge's courtroom Friday. Mr. Hanly said his group is pushing for more money to be paid out over a shorter time frame, but state attorneys general are generally in agreement about the deal.
Mr. Hanly said they are prepared to go to trial Monday. "We expect the jury and the world to see the extent of wrongdoing by these defendants," he said. "And we will try the case for as long as is necessary."
Paul Farrell, a West Virginia attorney who is also leading the local government cases, said he was concerned that distributors have proposed West Virginia communities be cut out of the deal, because the state's attorney general has collectively reached $73 million in settlements with the companies.
The governments allege drugmakers aggressively marketed -- and played down the addictive risks of -- their prescription painkillers, and that drug distributors didn't do enough to stop suspicious orders that flooded into communities. The companies have denied the allegations.
The settlement talks are an attempt to resolve over 2,000 lawsuits against the companies.
The chief executives of AmerisourceBergen, Cardinal and McKesson came to Cleveland on Friday for the talks, as well as corporate representatives from drugmaker Teva Pharmaceutical Industries Ltd., Walgreens Boots Alliance Inc. and a smaller distributor, Henry Schein Inc.
Those six companies are set to be defendants in a landmark trial starting Monday in front of Judge Polster. They'll face off against two Ohio counties whose cases have been selected to serve as a bellwether that will help guide how to resolve the rest of the litigation.
Teva, a generic drugmaker based in Israel, has proposed donating billions of dollars of drugs and a few hundred million in cash, according to a person involved in the negotiations. Mr. Hanly said that talks with Teva continue, and that they didn't have any discussions Friday with Walgreens.
Representatives for Teva, Walgreens and Cardinal declined to comment Friday evening. McKesson and AmerisourceBergen didn't respond to requests for comment.
After gathering everyone into his courtroom Friday morning, Judge Polster separated the parties into their own rooms and shuttled between them for at least seven hours. Lawyers slipped in and out, retrieving coffee and diet soda and checking in with other camps.
In one corner were Mr. Hanly and other private plaintiffs' lawyers representing cities and counties, who are driving the case going to trial Monday.
In another camp were the attorneys general from North Carolina, Tennessee, Texas and Pennsylvania, a bipartisan group leading talks on behalf of the states.
Attorneys are discussing the creation of a three-tiered system to guide how any settlement money is spent, according to a person involved in the negotiations. The largest tier would go toward programs aimed at abating the opioid crisis, with a smaller amount going directly to states and a third bloc of money to cities and counties.
Some attorneys remained in the courthouse into the evening hours.
Pharmaceutical and consumer-products company Johnson & Johnson is also engaged in talks to broadly settle the opioid litigation but wasn't present in Cleveland on Friday. The company already reached a $20.4 million settlement with the two Ohio counties to avoid the trial.
Write to Sara Randazzo at email@example.com
(END) Dow Jones Newswires
October 18, 2019 19:42 ET (23:42 GMT)
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