Editorials, Opinion

Morrisey making a mistake by rejecting cut of $26B settlement

At the end of July, three drug distributors and one drugmaker settled with a bipartisan group of states’ attorneys general for $26 billion. Distributors Cardinal Health, AmerisourceBergen and McKesson would contribute a combined $21 billion over 18 years and drugmaker Johnson and Johnson would pay $5 billion over nine years.

West Virginia has opted out of the settlement.

West Virginia Attorney General Patrick Morrisey crowed on Twitter: “By saying NO to opioid agreements today and carving local governments out, West Virginia is well positioned to litigate & negotiate a package that really puts the needs of our citizens first. It’s a good day to be a West Virginian!”

He later added that population-based disbursements make no sense. And to that degree, he does have a point. The settlement would be divvied up to participating states based 85% on population and 15% on the severity of the opioid epidemic’s impact on the state.

However, Morrisey has already settled lawsuits with the three drug distributors named in this lawsuit: McKesson in 2019 for $37 million, Cardinal Health in 2017 for $20 million and AmeriSourceBergen in 2017 for $16 million.

Those settlements totaled $73 million. West Virginia could see around $120 million from this settlement.

If you care to join us for the math, we estimated our cut based on what North Carolina is expected to receive, as reported by the New York Times, which is approximately $750 million. Since population is the primary factor for distribution, we calculated West Virginia’s population as a percentage of North Carolina’s (1.7 million ÷ 10.5 million = 0.16 or 16%) and then took that percentage from North Carolina’s settlement ($750 million x 0.16 = $120 million). Given the severe impact on our communities, however, that number could be higher.

Morrisey’s refusal to join this settlement is baffling. Most settlements include a standard agreement to drop any other current or future lawsuits against the company, though we can’t know for sure without seeing the court documents from the three cases mentioned above. So we’re operating under the assumption Morrisey — representing the state of West Virginia — can’t sue Cardinal Health, AmerisourceBergen and McKesson again for opioid-related damages. Unless there is something in the court documents that prevents West Virginia from participating in this mass settlement — and the fact Morrisey touts the decision to “opt-out” implies West Virginia could have “opted in” — this is a chance for us to receive an additional $100-million-plus from companies that contributed to the ravaging of our state, our communities and our families.

There are only two downsides we can see: All parties agreeing to the $26 billion settlement would forfeit any pending or future lawsuits against all four companies — including Johnson and Johnson; and if the threshold of at least 48 states, 98% of litigating local governments and 97% of the jurisdictions that have yet to sue is not met, then the full payout won’t be made, and participants will receive a fraction of what they could. State legislatures will have to produce legislation articulating where all the money will go — and that can include allocations to cities and counties.

We say all this with the understanding there are ongoing lawsuits based in West Virginia against all four companies mentioned in this settlement, such as Huntington and Cabell County, which are awaiting a verdict on a case against the three distributors worth a potential $2.5 billion.

That said, cities and counties pursuing significant damages could decline to join this national settlement, as long as we reach a total 98% local government agreement. But we should not expect any cases Morrisey is pursuing to bring in more the $120 million we’re looking at now. After all, Morrisey is notorious for settling opioid lawsuits for pennies on the dollar.