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Washington attorney general announces $476M settlement with opioid distributors

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Attorney General Bob Ferguson announces an agreement with three major opioid distributors to settle a lawsuit that had gone to trial, but had not yet concluded. Under the agreement, the state and local governments will share a $476 million settlement to address the ongoing public health fallout from the opioid crisis.

Three large opioid distributors will pay the state of Washington as part of an agreement to end litigation that began more than three years ago.

The settlement announced Tuesday comes almost a year after state Attorney General Bob Ferguson, a Democrat, rejected a proposed multi-state settlement with the companies that would have paid the state an estimated $430 million over nearly two decades.

Ferguson, at a news conference in Seattle, defended his decision to forgo the national settlement and take the case to trial.

“We forced these companies to stand trial for their conduct,” Ferguson said. “And as a result, Washingtonians will receive $46 million in resources we would not have received had we accepted the national settlement before going to trial.”

In addition, Ferguson said, the companies will pay another $41 million to cover legal costs for the state and local governments which were also plaintiffs in the litigation. Of that, Ferguson said $20 million will go to pay Motley Rice, a South Carolina law firm the attorney general contracted with to assist with the litigation.

Ferguson said the decision to settle the case before a verdict in the trial was based on a risk calculation.

“Because the one thing I could not have happen is we lose or we get a positive judgment from the judge, but it’s less than the national deal,” Ferguson said.

In 2019, Ferguson sued McKesson, Cardinal Health and Amerisource Bergen — all three Fortune 15 companies — accusing them of flooding Washington with prescription opioids such as oxycodone, fentanyl and hydrocodone.

The Attorney General’s office alleged the companies fueled the opioid epidemic in Washington by shipping more than 250,000 “suspicious" orders of prescription painkillers into the state between 2006 and 2014.

“They had a legal obligation to stop the shipments and report them; they did not,” Ferguson said at the news conference.

Under the agreement, which must still be approved by a judge, Ferguson said the companies will not admit to violations of the state’s Consumer Protection Act or other laws.

As with the multi-state settlement that Ferguson rejected, the $476 million in payments will be spread out over most of the next two decades. The funds will be divided between the state of Washington and cities and counties, which must also still approve the terms of the settlement.

The agreement requires that state and local governments spend the $476 million on approved efforts to mitigate the opioid crisis, including expanded access to drug treatment and prevention efforts.

Among those in attendance at Ferguson’s news conference was Lisa Janicki, a Skagit County commissioner who son died in 2017 after a years-long struggle with opioid addiction.

“This happened to my 30-year-old Patrick. It shouldn’t happen to anybody else,” Janicki said. “I really believe that with this systematic and combined effort to move forward … we can really keep any other family from having to stand up here and tell their story of their own child’s death.”

Washington’s Department of Health estimates that on average two people die each day from an opioid-related overdose in the state.

In a joint statement, the three distributor companies denied wrongdoing and downplayed the amount of the new settlement as “consistent with Washington’s allocation under the previously announced comprehensive agreement.”

“While the companies strongly dispute the allegations made in the plaintiffs’ complaints and during trial, they believe that resolving all of the litigation filed by the State of Washington and its political subdivisions will further the companies’ goal of achieving broad resolution of governmental opioid claims while delivering meaningful relief to communities across the United States that have been impacted by the opioid epidemic,” the statement said.

Ferguson said his lawsuit against the distributors is part of a larger effort to hold the opioid industry accountable for the ongoing epidemic. His office notes that between 1997 and 2011, opioid prescriptions and sales in Washington rose more than 500 percent. In 2015, eight Washington counties had more opioid prescriptions than people.

Over the past year, Ferguson has developed a pattern of rejecting initial settlement offers.

In March, he announced the state of Washington would receive an additional $113 million from Purdue Pharma, maker of Oxycontin, after he and other state attorneys general formally objected to the company’s bankruptcy plan.

Last July, at the same time he rejected the multi-state opioid distributor settlement, Ferguson also rejected a national settlement with Johnson & Johnson in another opioid-related lawsuit. Under that agreement, the company would have paid Washington $110 million over nine years. The case is now scheduled to go to trial in September.

According to Ferguson’s office, the state’s opioid recoveries to date total $714.5 million.