Nevada To Pursue Separate Opioid Litigation Against Major Drug Companies; New Statewide Distribution Plan Adopted

Las Vegas NV

25 August, 2021

7:59 PM

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By Sean Golonka, The Nevada Independent August 24, 2021 Nevada will not sign on to a proposed $26 billion multistate settlement with the nation's three largest drug distribution companies and drugmaker Johnson & Johnson — businesses accused of fueling the nation's opioid epidemic that has killed thousands of Nevadans — in hopes of getting a better deal. Attorney General Aaron Ford told The Nevada Independent on Monday that the state would have received roughly $240 million from the settlements — an amount he called "woefully insufficient" — and that the state will instead pursue separate negotiations with the companies "to ensure that the people in this state are adequately recompensed for the damages that opioids have caused in our communities." Ford would not identify how much the state is seeking through those separate negotiations but took issue with the allocation model used in the settlements. "It's something that we believe we have to stand firm on because those who've been involved in the opioid scenario here have done damage in our state, and we think they need to pay," Ford said.As litigation continues, the opioid epidemic continues to affect communities across Nevada. During a 24-hour period on Aug. 12, the Las Vegas Metropolitan Police Department reported five suspected fentanyl-related overdose deaths had occurred in Clark County. And the Southern Nevada Health District reportedthat from January to May, there were 92 fentanyl-related overdose deaths among Clark County residents, a 39 percent increase over the same period in 2020. The state previously secured a higher share of funds through individual litigation in a lawsuit against consulting firm McKinsey & Company, which provided services for opioid manufacturers. In March, the state agreed to a $45 million settlement agreement with the company, after Ford said that a multistate settlement would have yielded $7 million for Nevada. Pursuing separate litigation does not guarantee Nevada more money. Rather, the state's decision to not sign the settlement agreement gives Nevada the chance to litigate for a larger share of funds. The decision also means a potential payday could be months or years away, while other states could receive funds through the proposed settlements more quickly. "We're willing to go fight for Nevadans, if that means going all the way to trial and not attempting any settlement at all, and that is something that I think all defendants in our litigation know," Ford said. On Monday, Reuters reported that five other states have decided they will not join the settlements, while another (New Hampshire) decided it would not join the settlement with Johnson & Johnson but would join the settlement with the three drug distributors (McKesson, Cardinal Health and AmerisourceBergen). The decision comes alongside news that 29 local governments across Nevada have signed an agreementwith the state that will determine how opioid litigation proceeds will be distributed in the coming years. The agreement is effective on Aug. 9. Mark Krueger, chief deputy attorney general for the state's Bureau of Consumer Protection, told The Nevada Independent on Monday that the agreement helps unify communities across the state. "Every single county and every single litigating city in this state, who has active litigation against any opioids defendant, has gotten together through this agreement to say, 'we know how we're going to allocate the money fairly and equitably in the entire state among ourselves,'" Krueger said. Past litigation strategies by the state and local governments were more disjointed — in 2017, then-Attorney General Adam Laxalt said an effort by Reno Mayor Hillary Schieve to involve the city in a separate lawsuit targeting opioid manufacturers could unintentionally undermine a separate multistate investigation and lawsuit. Speaking to the benefits of the agreement, Krueger also pointed to the structure of the proposed settlements with Johnson & Johnson and the three drug distributors. The dollar amounts from any settlements can be maximized within states by having a large number of cities and counties signed on, he said. Under the agreement — which was first announced as a proposal by the attorney general's office in early July — any funds won through litigation against the 61 opioid manufacturers and distributors listed as defendants, including Purdue Pharma and Johnson & Johnson, will first be used to pay certain litigation costs. A 22.5 percent fee for the federal share of Medicaid claims payments will then be deducted from the remaining amount. In 2019, the state agreed to a contract with Ford's former law firm, Eglet Prince (now Eglet Adams), that could yield the firm up to $350 million, if the state recovers damages of more than $1.5 billion through its opioid litigation. Of the remaining funds, 44 percent will be allocated to the state, 39 percent will be distributed among local governments involved in the litigation and the remaining 17 percent will be distributed across all counties for Nevada Medicaid Match — the state's share of Medicaid claims payments. Krueger said that the allocations for Nevada Medicaid Match are another way for funds to be "fairly and equitably apportioned" to the counties. The Nevada Independent is a nonprofit, reader-supported news site. Since 2017, we have provided nonpartisan reporting on Nevada public policy, politics and people. Sign up here for our free morning newsletter.