Opioid Litigation Nationwide May Leave States with New Funding to Combat the Epidemic

Nina Terebessy | April 4, 2018
Image by frankieleonCC BY-NC-ND 2.0.

As the country continues its efforts to combat the opioid epidemic, states are poised to receive new sources of funding from lawsuit settlements with drug distributors. Following the success of a claim in 2007 against Purdue Pharma, hundreds of plaintiffs—ranging from small towns and counties to larger cities and states—are joining the wave of litigation. To speed up the process, many of these cases have been consolidated; one federal judge in the Northern District of Ohio is currently presiding over more than 400 suits, in what some believe could be the largest multidistrict litigation in history. Many of the lawyers representing plaintiffs in the MDL met this month at a conference in San Francisco to share litigation strategies and discuss the possibility of a nationwide settlement.

The prospect of such a large payout leaves states and municipalities with a new dilemma: how best to spend the funds. Some have noted the similarities to a settlement reached two decades ago with the tobacco industry, involving an agreement to pay $206 billion to states over a span of 25 years. While there was a clear assumption that states would use the funds for anti-smoking campaigns and other public health initiatives, many states spent only a small fraction of the money on tobacco prevention. One senior attorney for the National Health Law Program voiced concerns that payments from opioid settlements will be diverted in a similar fashion. However, early signs suggest that there is a concerted effort among states to ensure that the money is being used to directly address the opioid crisis. For example, West Virginia, which had the highest rate of opioid-related deaths in the nation in 2016, has already set aside over $20 million from lawsuit settlements with drug distributors to fund the expansion of nine substance abuse treatment programs scattered throughout the state. Lawmakers and pubic officials in other states, including Illinois, Michigan, and Kentucky, have signaled similar commitments.

Although most of the opioid lawsuits are still working their way through the courts, it is possible that these spending decisions will be made in the coming months. Judge Polster, who is overseeing the MDL proceedings in the Northern District of Ohio, indicated during a hearing in January that he was interested in reaching a wide-sweeping settlement as quickly as possible: “[m]y objective is to do something meaningful to abate this crisis and to do it in 2018.” While this potential funding is certainly not the only solution to the epidemic, it is an opportunity for states and local governments to offset the estimated hundreds of billions of dollars spent each year addressing the crisis.