- Elizabeth Larson
- Posted On
Proposed nationwide opioid settlement would resolve suits brought by Clearlake and Lakeport
LAKE COUNTY, Calif. — Lawsuits brought by thousands of state and local governments against the opioid industry could soon be settled, but Lake County officials don’t yet know how the outcome will impact the effort to address the crisis at the local level.
California Attorney General Rob Bonta on Wednesday announced the historic $26 billion settlement that officials said will help bring desperately needed relief to people in California and across the country who are struggling with opioid addiction.
“Nothing can undo the devastating loss of life caused by the opioid epidemic, or stop the grief it has caused for its victims and their families, but this proposed settlement represents one step in the process of healing our communities,” said Attorney General Bonta. “Along with our coalition partners, our office has worked to hold accountable bad actors who fueled this public health crisis — including those who produced, distributed and marketed these dangerous drugs.”
The settlement includes Cardinal, McKesson and AmerisourceBergen — the nation’s three major pharmaceutical distributors — and Johnson & Johnson, a company that manufactured and marketed opioids.
A previous version of this deal in principle was announced in 2019 and included the opioid manufacturer Teva. Negotiations with Teva are ongoing and are no longer part of this agreement.
The participating attorneys general investigated whether the three distributors fulfilled their legal duty to refuse to ship opioids to pharmacies that submitted suspicious drug orders and whether Johnson & Johnson misled patients and doctors about the addictive nature of opioid drugs.
Officials said the settlement would resolve the suits filed by nearly 4,000 state and local governments in response to the opioid crisis.
Among those government entities are the cities of Clearlake and Lakeport.
The Board of Supervisors voted in June 2018 to join the opioid lawsuit, while the Lakeport City Council voted to join the suit in June 2020 and the city of Clearlake filed suit in September 2020.
Last week, the Clearlake City Council held a closed session to discuss the litigation against AmerisourceBergen Drug Corp.
What it means for Lake County and the two cities isn’t yet clear.
Clearlake City Manager Alan Flora said that, presumably, the litigation settlement will have “some future impact on the city, but it is too early to know if this will end up being finalized.”
He added, “There are thresholds built into the settlement before final approval can be reached. It remains to be seen if those high thresholds will be met.”
Lakeport City Manager Kevin Ingram said once the settlement is reached, “that should start a timeline for action by other litigating parties including Lakeport and Clearlake in the near future. We should be getting more information on the process in the coming days.”
The county of Lake did not respond to a request for comment by time of publication late Wednesday.
On Thursday, County Counsel Anita Grant said that, ultimately, the county did not join the litigation as the board had voted to do in 2018.
“However, the settlement under discussion now will not be limited to just the entities who initiated legal action,” Grant said.
With settlement discussions ongoing, Grant said she could not offer additional information.
"California strongly supports continued investment in combating the devastation that our communities have suffered because of the opioid epidemic,” said Gov. Gavin Newsom. “The opioid epidemic continues to pose a serious threat to the health of Californians.”
Newsom said California experienced nearly 12,000 opioid-related emergency department visits and more than 3,000 deaths in 2019.
“We eagerly anticipate the finalizing of the proposed opioid settlement and partnering with local governments across California to leverage the funding that will help expand opioid prevention and treatment resources,” Newsom said.
If approved, the Attorney General’s Office said the settlement would resolve investigations and litigation over the companies’ roles in creating and fueling the opioid epidemic.
The proposed settlement also requires significant industry changes that will help prevent this type of crisis from ever happening again, Bonta reported.
State negotiations were led by the attorneys general of North Carolina and Tennessee, along with the attorneys general of California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, New York, Ohio, Pennsylvania and Texas.
This latest deal follows a previously announced $573 million opioid settlement with McKinsey & Company, which will bring more than $59 million to California for opioid abatement.
Bonta’s office said the participating states have 30 days to sign onto the deal and local governments in the participating states will have up to 150 days to join.
Settlement approval is contingent on a critical mass of states and local governments participating, the Attorney General’s Office said.
The terms call for the total funding distributed to be determined by the overall degree of participation by both litigating and non-litigating state and local governments.
The settlement amounts by state will be based on a formula that looks at impact, including number of overdose deaths, the number of residents with substance use disorder, the number of opioids prescribed and the state’s population.
As part of the proposed settlement, California stands to receive a maximum of nearly $2.34 billion if all California local governments sign on.
National, state and local impacts
Despite the increased focus on opioids, officials said that in 2020, opioid overdose deaths rose nationwide to a record 93,000, a nearly 30% increase over the prior year.
The Overdose Detection Mapping Application Program reports that national suspected overdoses in 2020 rose 18% in March, 29% in April and 42% in May compared to the same months in 2019.
In 2019, the California Department of Public Health reported 3,244 deaths related to an opioid overdose.
The opioid epidemic has had a serious impact on Lake County, which already struggles with poor health rankings nationwide.
The online Opioid Misuse Tool, created in partnership with the US Department of Agriculture and the NORC at the University of Chicago, shows that from 2010 to 2014, Lake County had an opioid overdose mortality rate of 34 per 100,000, which ranked it second statewide for opioid deaths behind Plumas County.
That rate dropped slightly to 31.6 for the time period of 2015 to 19, but at that time Lake County had the highest opioid overdose mortality rate statewide, based on the Opioid Misuse Tool.
The California Opioid Overdose Surveillance Dashboard, an ongoing collaboration between the California Department of Public Health, Office of Statewide Health Planning and Development, Department of Justice and the California Health Care Foundation, looks at opioid deaths by county and community.
It showed that Lake County had 23 opioid overdose deaths, for a death rate of 32.5 per 100,000, for 2019, the last year for which all data has been posted.
In 2019, Lake County had 56,927 opioid prescriptions, 17 hospitalizations and 32 emergency room visits related to opioid overdoses, the dashboard showed.
Settlement terms
Bonta’s office provided the following details for the settlement and its terms:
— The three opioid distributors will collectively pay up to $21 billion over 18 years;
— Johnson & Johnson will pay up to $5 billion over nine years with up to $3.7 billion to be paid during the first three years;
— The total funding distributed will be determined by the overall degree of participation by both litigating and non-litigating state and local governments;
— The substantial majority of the money is to be spent on opioid treatment and prevention; and
— Each state’s share of the funding has been determined by agreement among the states using a formula that considers the impact of the opioid crisis on the state — the number of overdose deaths, the number of residents with substance use disorder, and the number of opioids prescribed — and the population of the state.
The settlement also includes injunctive relief terms to help prevent this type of crisis from reoccurring.
It will result in court orders requiring Cardinal, McKesson, and AmerisourceBergen, for a period of 10 years, to:
— Establish a centralized independent clearinghouse to provide all three distributors and state regulators with aggregated data and analytics about where drugs are going and how often, eliminating blind spots in the current systems used by distributors;
— Use data-driven systems to detect suspicious opioid orders from customer pharmacies;
— Terminate customer pharmacies’ ability to receive shipments, and report those companies to state regulators when they show certain signs of drug diversion;
— Report and prohibit shipping of suspicious opioid orders;
— Prohibit sales staff from influencing decisions related to identifying suspicious opioid orders; and
— Require senior corporate officials to engage in regular oversight of anti-diversion efforts.
The settlement includes court orders requiring Johnson & Johnson to:
— Stop selling opioids for 10 years;
— Not fund or provide grants to third parties for promoting opioids;
— Not lobby on activities related to opioids; and
— Share clinical trial data under the Yale University Open Data Access Project.
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