Washington Attorney General Bob Ferguson on Tuesday announced a $518 million resolution in principle with three of the state's largest drug distributors to address and remedy fallout from the opioid epidemic.
Ferguson filed a civil lawsuit in 2019 in King County Superior Court against three drug-distribution companies: McKesson Corp., Cardinal Health Inc. and AmerisourceBergen Drug Corp.
Opening statements were held in November before Judge Michael Scott, and testimony in the case wrapped up in late March. Closing arguments, initially scheduled over three days in April, were continued until at least July 16 at the joint request of the parties, presumably to give them time to negotiate a settlement agreement.
The court record in the case is voluminous, and the complex litigation involved dozens of attorneys, both locally and from around the country.
In a joint statement Tuesday, representatives from the three drug distributors said they "strongly dispute" the allegations made by Ferguson's office and during the civil trial. But they believe resolving all of the cases filed by various Washington jurisdictions will further their goal of "achieving broad resolution of governmental opioid claims while delivering meaningful relief to communities" affected by the opioid epidemic.
Four months before the trial began, Ferguson rejected a national settlement offer from the three companies that attorneys general in 48 other states approved, he said during a Tuesday news conference. The net result of the proposed settlement means Washington communities will receive $46 million more for abatement efforts than the state would have otherwise received, he said.
The agreement is contingent on all of the 37 Washington cities and counties that filed individual lawsuits against the three drug distributors signing off on the deal, along with 90% of jurisdictions that didn't file suit and have populations over 10,000 people. There are approximately 85 such jurisdictions.
The state must submit the proposed resolution to Scott, the trial judge, by Sept. 23. Should Scott approve the settlement agreement, the state will ask that its lawsuit be dismissed.
McKesson will be responsible for paying 38% of the $518 million agreement, with Cardinal and AmerisourceBergen each paying 31%, Ferguson said. Payments will be split up over 17 years.
Ferguson said $476 million will go to proven strategies to aid people with substance abuse disorders as a result of opioid addiction, as well as wraparound services for things like housing, transportation, child care and education. The balance of about $42 million will go to paying direct trial expenses, legal costs of the 37 local governments that filed their own lawsuits, and legal fees for outside counsel hired by the Attorney General's Office.
"Our state has been one of the most aggressive in the country in taking the fight to these powerful corporate interests in order to secure the most possible resources" to combat the opioid crisis, Ferguson said.
The state argued during trial that the drug distributors are responsible for sending copious amounts of pain pills into Washington, violating state and federal law and creating the conditions that have led to the public nuisance of illicit drug use.
Ferguson said Tuesday that in 2015, for instance, there were eight Washington counties — Clallam, Grays Harbor, Columbia, Garfield, Asotin, Pend Oreille, Lewis and Benton — that had more opioid painkiller prescriptions than people.
The state also accused McKesson, Cardinal Health and AmerisourceBergen of shipping vast amounts of oxycodone, fentanyl and other painkillers across Washington and failing to comply with requirements that they identify and report suspicious orders.
But the distribution companies said they were not to blame because they, like the hospitals and pharmacies they serve, are licensed by the federal Drug Enforcement Administration and the state, and they comply with regulations that restrict access to controlled substances.
Attorneys for the drug distributors also argued the overprescribing of opioids has led to prescription drugs being sent into the illegal market, accounting for up to 70% of nonmedical uses of the drugs, and placed blame on criminal organizations that import fentanyl from outside the U.S.
Ferguson on Tuesday called the proposed settlement "an extremely important victory" but said the state's fight to secure resources to address the opioid epidemic is far from over.
The state has also filed a lawsuit against Johnson & Johnson. That trial is scheduled to begin in September.
