Baltimore’s gamble to independently sue companies that manufactured and distributed opioids that led to the opioid epidemic paid off Monday with a large settlement with Allergan Finance that could be a harbinger for additional big payouts from larger companies.
Allergan settled its case with the city for $45 million, due to be paid in the next 30 days. The amount is far more than the $7 million over seven years the city would have gotten if it sued collectively with other states and cities.
There are still several companies that are in litigation with the city, including CVS and Purdue Pharma.
Considering that Allergan only accounted for 0.5% of the opioids in Baltimore’s pharmacies, the remaining companies could settle for much larger amounts bringing a windfall of funds to the city to pay for services related to opioid addiction, according to Carl Tobias, a law professor at the University of Virginia.
“Their exposure is likely to be larger, just given the size of the entities and what the percentage might be,” Tobias said. “Those entities will have to seriously think about whether they do want to let it go to trial, or whether they can settle for something that they think is reasonable.”
The remaining defendants in the case were responsible for about 80% of the opioids that were delivered to drug stores in the city, according to Baltimore city officials.
Companies often settle out of court to avoid liability.
“The payouts potentially could be substantially larger,” he said. The bar to prove civil cases is lower than criminal cases, often leading to companies avoiding trials.
Tobias said the city is likely making the case that defendants were continuing their practices despite seeing warning signs of abuse.
“For example, in West Virginia, the counties that sued in federal court showed that there was so much more of opioids shipped to these particular counties that the company should have noticed,” Tobias said. “There would have been enough opioids for millions of people, and only thousands of people lived in the county.”
The trial in Baltimore’s lawsuit against Johnson & Johnson, McKesson, Cardinal Health, AmerisourceBergen, Walgreens, CVS, Teva and former Insys CEO John Kapoor is set for Sept. 16.
The city plans to create a council that will decide the best way to allocate the funds it received from the lawsuits, Mayor Brandon Scott said in a statement.
About $10 million is already earmarked to go to the Peer Navigator Program and Charm City Care Connection, which offer harm reduction kits, counseling, support groups and wound care.
