Oxycontin maker Purdue Pharma is proposing a global settlement in an attempt to end state investigations and lawsuits over the U.S. opioid epidemic, according to people familiar with the talks.
Purdue's lawyers raised the prospect with several southern-state attorneys general who haven't sued the company, as they try to gauge interest for a more wide-ranging deal, said four people who asked not to be identified because the talks aren't public.
Opioid makers are accused of creating a public-health crisis through their marketing of the painkillers. More than a dozen states and about 100 counties and cities already sued Purdue, other opioid makers and drug distributors, in a strategy echoing the litigation that led to the 1998 $246 billion settlement with Big Tobacco.
"This sounds like the opening bid in settlement talks,'' said Anthony Sabino, who teaches law at St. John's University in New York. "It also sounds like they are trying to convince some of these state AG's that they don't need to bring their own suits.''
A group of 41 attorneys general are also investigating how companies like Purdue and other opioid makers marketed and sold prescription opioids. It's not clear whether Purdue's lawyers are authorized to speak for other drugmakers facing opioid suits, but the people familiar with the talks say Purdue's attorneys are looking for a global accord to include all U.S. states' claims against all manufacturers.
Robert Josephson, Purdue spokesman, declined to comment on the settlement discussions. The company said earlier that the U.S. Food and Drug Administration approved Oxycontin for use as a painkiller, and approved the safety warnings. Cases focusing on opioids are targeting a government-regulated product, the company said. That means judges must defer to the FDA's finding that the painkillers are safe and effective, and that Purdue properly disclosed addiction risks on its warning label, according to the company's filing.
Stamford, Connecticut-based Purdue hired Sheila Birnbaum, a veteran mass-tort defense lawyer, to help guide their legal strategy and put together a settlement game plan, two of the people said. She's a partner with New York's Quinn Emanuel Urquhart & Sullivan.
Nicknamed the "Queen of Torts,'' the 76-year-old Birnbaum helped negotiate big-dollar settlements in the past, including lawsuits against Pfizer Inc. over its hormone-replacement drugs and the $765 million NFL concussion settlement. She also oversaw a $2.8 billion fund set up to compensate first responders and residents following the 2001 World Trade Center attacks.
"She's been the go-to person over the years to come up with sweeping resolutions for mass-tort cases,'' Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia, said of Birnbaum.
Birnbaum didn't immediately respond to a request for comment.
Any settlement would likely include cash, along with changes to the company's manufacturing and marketing practices, the people said. It would resolve only the state claims, they added.
What may make an early settlement offer attractive to states is early access to money to deal with the social costs of the opioid epidemic, Sabino said.
"The idea is the states wouldn't have to go through years of discovery and trials to wind up where they could be right now – at the settlement table,'' the professor said.
Governments could use their share of billions in settlement funds to recoup the costs of ramping up policing and drug-treatment programs over recent years.
Swain Wood, a lawyer for the North Carolina Attorney General Josh Stein, told a group of county officials at a Nov. 15 seminar in Raleigh that his office was negotiating with opioid makers, according to a person who attended the meeting.
Wood said his office was on a "dual-track,'' engaging in settlement talks while continuing to investigate opioid makers' activities in North Carolina, according to the person. He said the settlement proposal offered to North Carolina would only resolve the state's claims, but could offer an opt-in right for counties, the person said.
Laura Brewer, a spokeswoman for the North Carolina Attorney General's Office, didn't immediately return a call for comment on Wood's presentation.
More than 60,000 people died from drug overdoses in 2016, and there was a fivefold increase in overdose deaths involving synthetic opioids – from 3,105 in 2013 to about 20,000 in 2016, according to the Centers for Disease Control.
A study in the October 2016 issue of Medical Care Journal put the economic cost of opioid overdose, abuse and dependence at $78.5 billion. Health care accounts for about a third of that cost, while lost productivity in nonfatal cases add another $20 billion, according to the journal published by Wolters Kluwer.
While opioid makers are floating settlement proposals, they are also calling on the federal courts to consolidate all opioid claims before a single judge. A hearing on the multi-district litigation request is set for Nov. 30 in St. Louis.
The companies and some plaintiffs' lawyers are asking that opioid suits filed by states, counties and cities be combined for information exchanges and test trials. The consolidation is intended to save money by streamlining document exchanges and avoiding duplication.
Drugmakers have suggested collecting the cases in federal court in Manhattan while plaintiffs recommended that they be sent everywhere from New Hampshire to opioid-ravaged southern West Virginia, according to court filings.