August 6, 2019 / 7:08 PM / 17 days ago

UPDATE 1-U.S. judge expresses support for novel opioid settlement talks framework

(Adds details on hearing, settlement talks, share prices, PIX available)

By Nate Raymond

Aug 6 (Reuters) - A federal judge on Tuesday expressed support for a novel plan by lawyers representing cities and counties suing drug companies over the U.S. opioid epidemic that would bring every community nationally into their settlement talks despite objections from most states.

U.S. District Judge Dan Polster during a hearing in Cleveland, Ohio said that while the idea was unprecedented, it could allow companies accused of fueling the epidemic in nearly 2,000 lawsuits before him an ability to obtain “global peace.”

“There has to be some vehicle to resolve these lawsuits,” said Polster, who added he planned to rule quickly.

The proposal calls for creating a class of up to 3,000 counties and 30,000 cities, towns and villages that could vote on whether to accept any settlement the plaintiffs reach with defendants in the opioid litigation.

Attorneys general from 37 states and the District of Columbia pursuing related cases and probes have objected, saying the plan would likely face future court challenges that could derail all settlement efforts.

Paul Singer, a lawyer with the Texas Office of the Attorney General, said the plan also interfered with the states’ ability to decide how money is spent within their borders by setting a formula for allocating settlement funds among local governments.

Polster said he believed the allocation system a strength of the proposal as it “gets the money to where the harm is” to help address the opioid epidemic’s effects in communities nationally.

Opioids were involved in 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention.

Thousands of lawsuits by states and local governments have accused drugmakers like OxyContin maker Purdue Pharma of downplaying the risks of opioids in their marketing, and accuse drug distributors of failing to halt suspicious opioid orders.

Most of the localities’ lawsuits are before Polster, who has pushed for a settlement before an October trial. Plaintiffs have claimed it could cost about $480 billion to address the epidemic.

State attorneys general are pursuing their own cases in state courts as well investigations and settlement talks, which Singer called “active.”

Bloomberg News, citing people familiar with the matter, on Tuesday reported drug distributors McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp had proposed paying $10 billion to resolve the states’ claims.

The states have proposed the distributors pay $45 billion, a person familiar with the matter told Reuters. Those companies oppose the plan Polster is considering.

McKesson said it “has made no settlement offers.” AmerisourceBergen said it is vigorously defending itself, while Cardinal declined to comment. Shares of all three were down about 6% on an up day for the broader market. (Reporting by Nate Raymond in Boston Editing by Bill Berkrot)

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