Published in Health Care

Michigan among states discussing settlement with OxyContin producer

BY Sunday, October 27, 2019 02:00pm

If Michigan collects a share of what could become a multi-billion-dollar legal settlement with Purdue Pharma LP, Peter Jacobson believes the money needs to pay for prevention, treatment, and compensating people who became addicted to opioids.

A professor of health law and policy at the University of Michigan, Jacobson says “it’s very difficult to monetize the harm” caused by the opioid crisis and the “lies (pharmaceutical companies) told about the addictiveness” of opioids.

Jacobson, who serves as director of the U-M Center for Law, Ethics and Health, hopes Michigan’s share of any settlement with Purdue Pharma “gets to the right places.”

“It affects a lot of people and families in a lot of different ways, and I don’t think we would ever get much agreement on what the right amount is,” he said. “People’s lives have been devastated. You can never have enough money, but at least some (settlement funds) can compensate for the aggressive and fraudulent marketing and the harms that have been created.

“Let’s assume that the amount of money is acceptable, if not fully able to compensate for all of the harms. Then the question is: How do we assure the money gets spent in the right way? What is the best use of that funding?”

While a response to the nationwide opioid crisis may “be well underway, the epidemic is not over,” and “some investments in prevention would be wise,” said Jacobson, who also advocates for investing in treatment and rehab.

Michigan is one of 28 states now negotiating with OxyContin producer Purdue Pharma, which filed for a structured bankruptcy in September after reaching a tentative agreement to settle numerous state and local lawsuits.

Attorney General Dana Nessel last month confirmed that Michigan joined with states that were part of discussions with Purdue Pharma over a final settlement, which would need the federal court’s approval. Other states suing Purdue Pharma opted not to join the settlement talks and continue to pursue their own cases. 

Michigan also is part of a committee working out the details of the settlement.

“I believe Michigan residents are best served by an infusion of funds into our state as quickly as possible so we can begin providing relief to our hardest hit communities and to provide assistance to those who are suffering from addiction. This epidemic is a public health crisis,” Nessel said in a statement at the time. “Michigan cannot wait any longer to ensure that those pharmaceutical companies who created it begin paying to redress the harm they’ve caused.”

Michigan also is reportedly in talks with other drug makers that contributed to the nation’s opioid crisis.

The Attorney General’s office this month selected three law firms for a litigation team to provide expertise on opioids. The firms approved by the state Administrative Board include Dallas, Texas-based Baron & Budd P.C.; Pensacola, Fla.-based Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor P.A.; and Farmington Hills-based The Sam Bernstein Law Firm PLLC.

The legal team “creates an incredibly deep bench to help make sure Michigan has the expertise available, under one contract, to handle the wide-ranging issues that are present in this historic litigation,” according to an Oct. 17 statement from the Attorney General’s office.

“We are eager to get to work with these national experts to pursue litigation to protect Michigan residents from chemical and pharmaceutical manufacturers and distributors that have poisoned our people and our property,” Nessel said. “These firms bring extraordinary skills, experience and resources to the table and will help guide us on some of the most important work we can do for our state.”

For states involved in the case, potentially billions of dollars in settlement funds are at stake. 

How Michigan may ultimately spend its share of the money from a Purdue Pharma settlement remains a major question for consideration.

“That’s something we’re still working through,” said Dan Olsen, a spokesperson for the attorney general’s office.

Jacobson at U-M hopes the state does not repeat what it did two decades ago with the landmark $206 billion, 25-year settlement with the tobacco industry. Since 1999, annual payments to the state from the tobacco settlement ranged from $108 million in the first year to a high of $386 million in 2013, according to a database maintained by the Kaiser Family Foundation. The state received $300 million in 2018.

The national tobacco settlement left states to decide how to allocate the proceeds. In Michigan, lawmakers at the time decided to put the money toward merit scholarships that no longer exist, economic development, and prescription drugs for the elderly.

The state Legislature in 2005 then decided to sell bonds against tobacco settlement proceeds to create the state’s 21st Century Jobs Fund, which has since ended. Proceeds in the past also have gone toward stabilizing the state budget.

“Michigan spent zero dollars on tobacco control,” Jacobson said. “There were several problems with the tobacco national settlement agreement that are worth thinking about in terms of how the opioids settlement should be approached.”

Jacobson hopes the state can learn from the challenges with the tobacco settlement and “avoid that in this litigation.”

“That’s why the questions are: What’s the right way to spend the money? Should the states and localities have discretion on how to allocate the funding? And secondly: What’s the enforcement mechanism to ensure the money gets spent for opioid-related purposes?” Jacobson said. 

Most recently, Michigan was set to receive about $2.6 million as part of a $700 million settlement involving 32 other states with Reckitt Benckiser Group, which produces a drug to treat substance abuse.

The settlement, which still needs the court’s approval, was over a civil fraud lawsuit originally filed in West Virginia that claimed Reckitt Benckiser Group improperly marketed and promoted the drug Suboxone, which is used to treat opioid dependence. Under the settlement, $400 million will go to the federal Medicaid program.

Such settlements can go beyond monetary claims, Jacobson said. He cites as an example the tobacco settlement that included a ban on advertising tobacco in the U.S.

“You can drive a lot of non-monetary strategies in prevention programs and restrictions that are mutually agreeable to the parties,” he said. “The dollar amount in no way precludes other restrictions or changes you may include. ”

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