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Suits seek to recoup opioid costs

December 31, 2017 GMT

Fort Wayne and Allen County officials this winter are part of an avalanche : of lawsuits.

Government entities : states, counties, cities and towns : are filing legal action to hold drugmakers, wholesale distributors and others financially responsible for consequences of the nation’s opioid epidemic.

The powerful prescription painkilling drugs ended the lives of about 150 Fort Wayne residents in 2017 alone. The lawsuits contend there are other victims : taxpayers.

“The monetary cost to governmental agencies is in the tens of billions of dollars each year,” according to a statement from the Indianapolis law firm of Levin Papantonio.

The firm is among those recently soliciting municipal governments to file suits.

One nationwide estimate in 2016 from the federal Centers for Disease Control and Prevention put the cost of the opioid epidemic at 8 billion of that was borne by state and local governments in criminal justice costs, according to the study, the latest available and based on 2013 statistics.

Now, local governments are seeking to recover costs stemming from the need for health care interventions, emergency responses, drug treatment, law enforcement actions and the involvement of other parts of the criminal justice system. Prosecutors, public defenders, jail staff and coroners all have to invest time and resources in opioid-related cases, said Dave Bottorff, executive director of the Association of Indiana Counties.

“No one has come up with total costs,” Bottorff said, referring to the tab carried by the state’s county governments. “As these cases proceed, plaintiffs : the counties : will be responsible for tallying up the costs.”

For municipalities, the lawsuits represent a low-stakes bet. The law firms contracted by Allen County and Fort Wayne are working on a contingency basis, so the municipality will pay the lawyers only if money is awarded by the court or in a legal settlement.

The county’s three firms will divide 25 percent of any money, Therese Brown, president of the County Commissioners, confirmed. The firms are Crueger Dickinson and von Briesen & Roper of Wisconsin, and the national firm of Simmons Hanly Conroy. The city’s law firm, Taft Stettinus & Hollister, Indianapolis, will retain 30 percent, according to Chou-il Lee, a lawyer handling the case.

But the choice of different firms highlights the ongoing debate about the best legal tactics to take.

At the state level, Indiana’s attorney general in June joined about 40 other states in investigating whether the drug industry worsened the epidemic by illegally marketing and selling opioids. Attorneys general in other states, including Ohio, already have filed suits alleging deceptive practices.

Some government units, including four cities in West Virginia, the state with the highest drug-death rate, have chosen to file suit against a prominent hospital accreditor, the Joint Commission on Accreditation of Health Care Organizations.

Those suits contend the commission spread “misinformation” about the likelihood of addiction in conjunction with funding from drugmakers : and maintained opioids as part of treatment standards the institutions must meet for government reimbursement under Medicare and Medicaid.

The county’s suit will go after drugmakers, Brown said. They include companies related to Purdue Pharma, Teva Pharmaceuticals, Johnson & Johnson, Janssen, Endo and Cephalon Inc.

The choice of that tactic and the law firm was influenced by its decision to serve only counties and an affiliation with Paul Hanly, an attorney in New York, as “a subject matter expert,” Brown said.

Hanley in 2007 won millions for individuals in a class-action lawsuit against Indiana-based Purdue Pharma and is now counseling municipalities, according to an Oct. 10 report by www.stat.com, an online health care industry news site.

“All of this is at the beginning,” Brown said of the still-unfiled suit. “My understanding is that (the law firm is going to work on collecting the info with minimal expense on the county side.”

Meanwhile, Fort Wayne’s suit is a federal public nuisance suit that targets drug wholesalers, where Lee believes the legal arguments are better.

A federal law dating to 1970 limited the number of companies allowed to wholesale the painkillers, he said, in return for creating procedures for spotting, blocking and reporting suspicious purchases.

“They didn’t do that,” Lee, formerly city attorney for Terre Haute, said in an interview after the contract with Fort Wayne was announced.

Public nuisance suits allege that the action of an individual or company has adversely affected the health, safety, welfare or comfort of the public. The city’s suit is not a class-action lawsuit and, Lee said, each city that hires the firm will file a separate case in its own federal jurisdiction and gather its own evidence.

But, for administrative purposes, the case likely will be transferred with others to federal court in the Northern District of Ohio, which is handling similar ones from around the nation. Lee said his firm had been engaged by 14 Indiana counties. Northern District officials said more than 60 cases from seven states had been filed by the beginning of December.

Fort Wayne is suing distributors McKesson Corp., Cardinal Health and Amerisouce Bergen, saying they control 80 percent of the market for prescription opioids and have combined annual revenues of 200 million in federal fines last winter to settle opioid suits, Lee said.

Drugmakers, distributors and the joint commission have denied the claims the suits make, and legal questions remain about the extent any of the defendants can be held responsible.

The Healthcare Distribution Alliance, representing distributors, issued a statement saying they aren’t willing to be scapegoats for a complex problem.

“We don’t make medicines, market medicines, prescribe medicines or dispense medicines or dispense them to consumers,” the statement said. “Given our role, the idea that distributors are solely responsible for the number of opioid prescriptions written defies common sense and lacks understanding of how the pharmaceutical supply chain actually works and how it is regulated.”

In a Dec. 22 interview with The Journal Gazette, Mayor Tom Henry said he had met with other mayors and commissioners to suggest if they should consider filing. He believes the city’s tallied expenses from opioids may surpass $10 million.

“The more vocal we can become, the more powerful we become,” he said, comparing the effort to the government lawsuits that led to settlements from the tobacco industry for smoking-related costs.

“Eventually, we’ll make enough progress where either these distributors, manufacturers, will either settle out of court or they’ll lose in court. And that could result in millions of dollars coming into our respective communities and then help us out with (funding for) treatment programs.”

Allen County Health Commissioner Dr. Deborah McMahan last week said she’s happy local governments are filing suits because waiting for the state to act might take too long. And, she said, there’s no guarantee the money will ever get to the local level “where we’re incurring the costs.”

McMahan called the suits a groundbreaking way to deal with “the worst public health crisis I’ve seen” and noted the suits were filed after the region’s Opiate Task Force met with attorneys. “I’m just glad they listened to us.”

rsalter@jg.net