Baltimore has reached a $152.5 million settlement with the drug distributor Cardinal Health, the largest deal to emerge so far from the city’s $11 billion lawsuit against opioid companies accused of contributing to an addiction and overdose crisis.
The city touted the settlement, which brings Baltimore’s total winnings against drug companies to more than $240 million, as an example of a successful litigation strategy. Two years ago, Baltimore declined to participate in a $400 million statewide settlement with several companies, including Cardinal Health, in hopes of winning more money through its own lawsuit.
The city has now won more than double what it would have received as part of any existing global settlements, it said in a Friday release announcing the deal.
“We have said from the beginning that we are committed to do the right thing, not the popular thing or the easy thing – and these settlements are proof that our decision to reject the global settlements and carry on this fight was the right one,” Mayor Brandon M. Scott said in a statement.
“As our City and partners continue our daily work combatting the impacts of Baltimore’s opioid epidemic that these manufacturers and distributors caused, the resources delivered by these settlements will have a transformative impact on our work.”
Friday’s settlement comes one day after a Baltimore judge declined to throw out the city’s lawsuit against Johnson & Johnson, McKesson, Cardinal Health, AmerisourceBergen (now called Cencora), Teva Pharmaceuticals and Walgreens. The deal means Cardinal Health will not participate in the trial, which begins Sept. 16.
“We remain committed to being a part of the solution to the U.S. opioid epidemic, and believe this settlement agreement is a prudent way to move forward and end the lengthy litigation process, while helping provide some necessary resources to the Baltimore community,” Cardinal said in an emailed statement.
The city called the settlement “an unprecedented recovery in nationwide opioid litigation.” Cardinal was one of the three largest opioid distributors in the Baltimore area, which saw a flood of millions of legal opioids during the height of prescribing.
The city has accused opioid distributors and manufacturers of irresponsibly marketing painkillers without concern for their addictiveness, targeting doctors for advertising and failing to block unusually large orders of painkillers. The lawsuit claims the glut of opioids reversed progress the city had made in combatting heroin overdoses and created a new generation of opioid users who eventually turned to more dangerous street drugs, contributing to an overdose crisis.
The money from the Cardinal settlement will be paid out this year, the city said. (Maryland’s global settlement will be paid over 18 years.)
The city has committed to using the money for opioid remediation and contributing funds to substance use treatment centers and community organizations that offer housing assistance, workforce training and case management, among other resources.
The city said it will provide $5 million for Tuerk House, Inc.; $5 million for Helping Up Mission; $3 million for Baltimore Safe Haven; $3 million for HOPE Safe Haven; $2 million for More Than a Shop; $1 million for Marian House; and $1 million for Turnaround Tuesday.
Last week, Baltimore announced that it had settled with CVS, one of the defendants in the lawsuit, for $45 million. The city also previously settled with another company, Allergan, for the same amount. Both companies were relatively small contributors to the total number of opioid pills that bombarded the Baltimore area.
The city did not say exactly how much of the Cardinal settlement will go to its outside counsel in the opioid lawsuit, the New York law firm Susman Godfrey. Law firms that take cases on contingency typically keep about a third of any proceeds.
Nearly half of the Allergan settlement went to Susman Godfrey, an amount that included attorney fees and a $5 million reimbursement for expenses the firm incurred during the litigation.
“No expenses will be taken out of the CVS settlement and the remaining expenses will be reimbursed from more significant recoveries later this year,” the city’s Law Department said in an email to The Sun.
