After months of pushback from Mayor Jim Kenney and District Attorney Larry Krasner, who argued the settlement amount was too low and the 18-year payout schedule was too long for a city among those hardest hit by the drug epidemic, the settlement negotiated by Pennsylvania Attorney General Josh Shapiro and other state AGs eventually won Philadelphia's buy-in before a midnight deadline Wednesday.
According to the AG's office, Philadelphia's share is at least $186 million. According to the mayor's office, the city will receive additional funds "due to the magnitude of the impact and devastation that the opioid epidemic has wrought on the city and our residents." The amount was not immediately disclosed by officials.
The attorney general said in a statement Thursday that funding from what he called a "historic agreement" will begin flowing as early as April "to jumpstart programs and ramp up staffing to save the lives of those struggling with opioid addiction." "This agreement represents the most significant infusion of resources into our Commonwealth to address this epidemic, which has been fueled by greedy pharmaceutical companies."
Opioid agreement at the national level
The $26 billion national settlement is intended to resolve thousands of lawsuits against Johnson & Johnson and the country's three major pharmaceutical distributors: AmerisourceBergen, headquartered in Conshohocken, Texas, McKesson, and Cardinal Health in Ohio. Under the terms of the agreement, the companies have not admitted to any wrongdoing.
In a joint statement last month, the distributors stated that they "remain deeply concerned about the impact the opioid epidemic is having on communities across the country and remain committed to being part of the solution." According to Johnson & Johnson, the opioid crisis is a "tremendously complex public health issue," and the company has stopped selling prescription opioids in the United States as part of its "ongoing efforts to focus on transformational innovation."
The four collar counties in the Philadelphia region will receive up to $147.7 million in total, according to the AG's office.
The total payouts are as follows: $45 million for Bucks, $19.2 million for Chester, $48.5 million for Delaware, and $35 million for Montgomery.
In 2017, Delaware County was the first to file an opioid lawsuit against drug companies in state court. The county will also receive money from a $30 million pool as a result of its work on opioid litigation. Philadelphia will receive $13 million from the pool, which will be applied to its $186 million settlement share. Carbon County will also receive a portion of this pool.
"Particularly during this pandemic. When we see an increase in overdose deaths, we believe we can use these resources to save people's lives "In a recent interview, Delaware County District Attorney Jack Stollsteimer stated. In 2019, his office filed a lawsuit against pharmaceutical companies.
Bucks and Montgomery County spokespeople declined to comment on future plans for the settlement funds.
A previous national deadline for municipalities to sign up by Jan. 2 was extended to Jan. 26, and the number of participating Pennsylvania counties has gradually increased over the last month, from 47 counties on Dec. 29 to all 67 counties by Wednesday night.
Shapiro had urged municipalities in Pennsylvania to drop their legal battles in exchange for guaranteed settlement funding to combat the epidemic. His office cited recent setbacks in other litigation: last fall, the Oklahoma Supreme Court overturned a ruling for a $465 million verdict against Johnson & Johnson, and cities and counties in California lost a case against drugmakers at trial.
The settlement funds will be used for programs and services such as the treatment of opioid use disorder, the distribution of medication such as Naloxone to reverse overdoses, and educational outreach to prevent opioid overuse and misuse.
Reaching the state's maximum payout of $1 billion has been contingent on the number of municipalities that participate: the more that do, the more money comes into the state. According to Shapiro, Pennsylvania is on track to meet that goal, with support from all counties.
While the total is payable over 18 years, approximately $232 million is scheduled to be received in year one.
Mayor Kenney and DA Krasner have both criticized the settlement proposal since it was first announced last July, claiming that the city would not receive enough money under the terms of the agreement.
Last month, a mayor's spokesperson told The Inquirer that the city would "not agree to such a minimal amount of money over such a long period of time and incongruent to the scale of the damage inflicted."
In 2020, the city had its second-highest drug overdose death toll on record: 1,214 people were killed, with opioids accounting for 86 percent of those deaths.
Both the city and Krasner's office filed opioid lawsuits against distributors and drugmakers, and Krasner's is one of only four bellwether cases in the state that will go to trial first, though no trial date has been set. The complaints are part of dozens of lawsuits filed throughout the state that are being coordinated in the Delaware County Court of Common Pleas.
During the settlement process, Krasner also attempted to protect his opioid case. He sued Shapiro's office last summer, asking the state's Commonwealth Court to rule that the attorney general cannot dismiss the district attorney's claims against corporations as part of the settlement.
Shapiro's office argued that the district attorney lacked the authority to sue the attorney general and that the case was premature because settlement sign-ups were still taking place.
In December, a panel of judges heard arguments on the issue, and a decision is still pending.