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November 04, 2022

$10 billion opioid settlement from CVS and Walgreen's could mean drug treatment money for Pennsylvania

The proposed deal would pay states over the next 15 years, but the pharmacy giants say it is not an indication of wrongdoing

CVS and Walgreens appear poised to settle thousands of lawsuits over their roles in the ongoing opioid crisis, and Pennsylvania may claim part of the proposed $10 billion.

The pharmacies announced Wednesday that they were prepared to pay roughly $5 billion each to settle numerous lawsuits from state, local and tribal governments.

CVS pledged $4.9 billion to state and municipal governments over the next decade, as well as $130 million to tribes, while Walgreens promised to pay $4.79 billion over 15 years to states, with an additional $154.5 million to tribes. Both companies said the proposed payments were not an admission of wrongdoing.

The deal won't be final, however, until a majority of those government plaintiffs agree to the terms, and Pennsylvania is one of them.

Josh Shapiro's office would not say whether the attorney general for Pennsylvania had accepted the settlement, but indicated negotiations were still underway.

"While the work is very much ongoing, a coalition of states, in cooperation with lawyers representing the subdivisions, is making progress in our negotiations with Walgreens and CVS, and we're hopeful we will be able to reach a final agreement," Shapiro said in an emailed statement to PhillyVoice. "As soon as possible, we want to deliver meaningful resources to help people suffering from opioid addiction."

Shapiro's office has called the opioid and heroin crisis the "number one public health and public safety challenge facing Pennsylvania." According to the state's opioid data dashboard, 5,224 people died from drug overdoses last year, and another 5,162 died the year before that. The dashboard recorded 46,577 emergency room visits for opioid overdoses between Jan. 1, 2018, and Oct. 7, 2022, and 76,975 doses of the overdose-reversing medication Naloxone were administered by EMS during the same time period. 

Philadelphia, alone, reported more than 1,200 annual deaths from drug overdose in its 2021 OD Stat report.

For law experts, the potential CVS and Walgreens settlement is the latest indication that the tide is turning against opioid manufacturers, distributors and retailers in a what has been an extremely lengthy, messy legal battle. "Years of litigation seem to be finally productive," Robert Field, a law professor at Drexel University and author of two books on health care regulation, said on Thursday.

The many different governments and defendants involved have made the legal case against opioids difficult to streamline, Field said.

"My perspective is to compare this to the tobacco litigation of the late '90s and this is obviously much more disjointed," he said. "The tobacco litigation was much more direct. It was the states as the jurisdictions and it was the tobacco manufacturers as the defendants. So this has been a lot more complicated, and I think harder to resolve. It's much more piecemeal."

Pennsylvania has signed off on a few of these multi-state settlements in the past. In July 2021, the state played a "lead role" in negotiating a $26 billion settlement with Johnson & Johnson, Cardinal, Amerisource Bergen and McKesson. The deal will distribute the funds among the states, over the next 18 years, according to population and the toll of the crisis. 

Philadelphia officials, including Mayor Jim Kenney and District Attorney Larry Krasner, were initially critical of the settlement, refusing to drop their own separate lawsuits in order to pursue a greater sum, distributed in quicker fashion. But the mayor eventually withdrew his lawsuit to sign onto the deal, securing $186 million for the city over 18 years. Krasner is still pursuing his litigation against Johnson & Johnson and the three drug distributors. 

Pennsylvania also was one of 15 states to sign onto a $4.5 billion settlement with Purdue Pharma, the maker of OxyContin.

As the state plaintiffs weigh CVS and Walgreens' offer, Field sees some bumps in the road ahead.

"I think the next step is going to depend on some clinical decisions, CDC guidelines, FDA guidelines for use of approved opioids," he said. "This has put a burden on the medical profession, which has had to go back and forth between wanting to thoroughly treat pain to wanting to avoid addiction. And I think we're going to continue to see a tweaking of that."

Still, Field is pleased to see "money pouring in for treatment" — he just hopes local governments will learn from recent history and actually put those sums towards their intended purpose.

"I hope it gets used appropriately," he said, noting that many states involved in tobacco lawsuits did not use the settlement money on promised smoking cessation projects. "You see cases where states wanted to use it just to cut taxes." 

Shapiro has pledged to put money into treatment and recovery programs, though his current bid for the governor's mansion could leave someone else in charge of the funds. If elected on Nov. 8, Shapiro would leave the attorney general's office in just two months.

"My office is determined to hold every company that fueled the opioid epidemic responsible for their reckless actions," Shapiro said in his emailed statement. "They need to step up and help us combat this crisis — that means providing significant resources to communities hit the hardest, to ensure Pennsylvanians get the treatment and recovery resources they need. 

"It also means changing their business practices to make sure this never happens again."

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