UPDATE 4-Opioid settlement talks falter, landmark trial expected Monday -attorney

CLEVELAND (Reuters) – A landmark trial stemming from the U.S. opioid epidemic is expected to begin on Monday after last-ditch talks to strike a multibillion-dollar settlement faltered on Friday, according to an attorney for local governments.

A view of the statue standing in front of the U.S. District Courthouse in Cleveland, Ohio, U.S., October 18, 2019. REUTERS/Aaron Josefczyk

The thousands of towns and counties that sued drugmakers and distributors are “not on the same page” as state attorneys general who also sued the companies, said the attorney, Paul Hanly.

“Our clients aren’t there yet,” said Hanly, who represents the local governments that brought the bulk of the lawsuits from around the country that have been consolidated in the Cleveland federal court where talks were held on Friday.

U.S. District Court Judge Dan Polster summoned executives from the companies that distribute the bulk of U.S. drugs – AmerisourceBergen Corp (ABC.N), Cardinal Health Inc (CAH.N) and McKesson Corp MCK.N. – as well as Israel-based drugmaker Teva Pharmaceutical Industries (TEVA.TA) for Friday’s talks.

Hanly said the four state attorneys general leading the talks generally supported a proposed $18 billion settlement with the three distributors.

Also attending were executives from smaller distributor Henry Schein Inc (HSIC.O) and Walgreen Boots Alliance Inc (WBA.O), a pharmacy chain.

Together, the companies will be defending themselves at Monday’s trial over allegations they fueled an opioid addiction crisis that caused roughly 400,000 U.S. deaths from 1999 to 2017, according government statistics.

Hanly said discussions would continue, although he did not expect face-to-face talks to go through the weekend. Corporate executives and their attorneys and some of the attorneys for governments were still behind closed doors, where they had been negotiating all day.

Another attorney for local governments, Paul Farrell, said the attorneys general are attempting to decide among themselves how to allocate the settlement money with little input from the local governments.

While the cases pit governments against large companies that profited from the use of opioids, there is also tension between cities, towns and counties and their state governments over the right to bring the cases and control the settlement proceeds.

Farrell said there was also an effort underway to reach a narrow settlement with just the two Ohio counties of Cuyahoga and Summit that are the plaintiffs in Monday’s trial.

If there is no settlement, Monday’s so-called bellwether or test trial would proceed as scheduled. A bellwether trial gives the parties a chance to assess a jury’s reaction to the allegations, which could then shape a settlement of all the litigation.

Other defendants in lawsuits overseen by Polster include Johnson & Johnson JNN.N, Mallinckrodt Plc (MNK.N), Endo International Plc (ENDP.O), Walmart Inc (WMT.N) and Allergan Plc (AGN.N), among others.

OxyContin maker Purdue Pharma, viewed as one of the main culprits in fueling the opioid crisis, is also no longer part of the Ohio trial after declaring bankruptcy.

Writing by Tom Hals in Wilmington, Delaware; Editing by Giles Elgood and Bill Berkrot


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