The opioid crisis has dominated the 24-hour news cycle over the past four years. President Trump threw down the gauntlet in 2017, promising to bring opioid manufacturers to justice for their role in the opioid epidemic. A pathway to a global settlement exists. Johnson & Johnson and the big drug distributors settled for $26 billion. Mallinckrodt settled for $1.6 billion, which was part of its bankruptcy plan. Earlier this week bankruptcy judge Robert Drain agreed to a $4.5 billion settlement with Purdue Pharma, widely considered the worst actor of all opioid manufacturers. The Purdue settlement could trigger settlements with smaller players like Endo International and Teva.
Judge Drain’s comments pursuant to opioid settlements sound eerily similar to what we have been saying on Trump And The GE. At the nine minute mark of the following video, Torian Mitchell explains how prolonging opioid trials could be throwing good money after bad.
Torian Mitchell: “Whatever the New York AG is either hoping to find or thinks that Endo has been hiding, the thing that stands out to me in all of that is that when you look at the state of Oklahoma, when you look at the state of Ohio, Endo was literally given a pat on the back … in terms of the way they have handled the case, the way they have been forthright, the way that they have opened their books … participated and cooperated with investigations, and have done so preemptively … New York has been in the mix the entire time.
What are they hoping to discover that Ohio and Oklahoma have not been able to discover? Additionally, what do they think that Endo would be able to produce in terms of monetary settlement or judgement that is going to be bigger than a Mallinckrodt … that’s going to be bigger than Johnson & Johnson? Endo is by far the smallest player. Endo is the smallest player even when we compare it to Teva. I constantly look at things in terms of an ROI. If I can take $2 to earn $1,000 … if it takes me $996 to earn $1,000 then the ROI is not as attractive. At this point the state AG is taking $999 to earn $1,000.
What is the ROI here that they are expecting after all of the effort? You’re dragging this thing out … You have already captured $30 billion, yet you continue to drag this thing out. If you look at the infighting between DeBlasio and Cuomo over the last four to five years … one of the things that we quickly learn is that New York state has been largely cash-strapped … the New York residents who have been affected and largely impacted by the opioid crisis, continue to drag out the help that they need.”
Hopefully, more settlements will be on the way and states can put provides more funds to communities and municipalities where the harm has occurred. Otherwise, plaintiffs lawyers and state AGs risk becoming a nuisance to the public.