Baltimore has reached a $45 million settlement with the pharmaceutical distributor CVS as part of a lawsuit the city is pursuing over its opioid epidemic, Mayor Brandon Scott announced late Friday afternoon. The settlement adds to $45 million the city had already secured from a separate drug supplier earlier this year.
The decision comes as Baltimore is barely a month out from a scheduled trial date with opioid companies and manufacturers after six years of litigation.
Scott gambled by deciding not to opt into a global, $400 million settlement with other jurisdictions around Maryland, and he touted Friday’s settlement as further vindication of that decision. Between the CVS agreement and a settlement with the drug company Allergan announced earlier this year, Baltimore has won a total of $90 million — about the same amount the city would have taken home had it opted into the global settlement, according to the news release.
Funds from the wider settlement would have paid out over several years; instead, the city said it will recover the full $90 million by the end of the year.
The Friday news release acknowledged that the city’s opioid epidemic stands as the worst in the nation, reporting that a joint New York Times/Baltimore Banner investigation brought to light earlier this year. The Times/Banner reporting found the overdose rate in Baltimore is far higher than in any other major American city, killing nearly 6,000 people in the last six years. Scott and Baltimore City Solicitor Ebony Thompson pledged to continue pursuing damages related to the epidemic from opioid companies and distributors.
This summer, City Council members planned to hold a series of hearings to better understand the crisis, but at the request the mayor’s office, the City Council president abruptly canceled them. Asked about the decision, Scott pointed to the ongoing litigation.
“My responsibility is to do what’s best for the city,” he said.
CVS Health spokesperson Mike DeAngelis said in an emailed statement that closing the case is “in the best interest of all parties” and does not equate to an admission of wrongdoing.
“We remain committed to complying with all applicable laws regarding controlled substance prescriptions and remain dedicated to helping reduce prescription drug abuse and diversion,” the statement said.
CVS, according to the city, distributed hydrocodone and other opioids to its Baltimore pharmacies. Its share of the market totaled about half a percent, while the defendants remaining in the city’s lawsuit accounted for more than 80%, the city said in the news release.
Those defendants include Johnson & Johnson, McKesson, Cardinal Health, AmerisourceBergen (now Cencora), Teva Pharmaceuticals, Walgreens, and former Insys owner John Kapoor. A trial is set for Sept. 16.
Along with the details of the settlement, the city also said Friday that it will commit $12 million to four mental health treatment and harm reduction programs: the Law Enforcement Assisted Diversion program ($5 million), Healing City Baltimore ($5 million), Roberta’s House ($1 million) and From Prison Cells to PhD ($1 million).
Sara Whaley, program manager of the Bloomberg Overdose Prevention Initiative at Johns Hopkins, will serve in an advisory role on the City’s use of settlement funds. She is a Baltimore resident and faculty member at the Johns Hopkins Bloomberg School of Public Health who is considered a leading expert on how localities should direct funds from opioid litigation.
As the city nears the end of its yearslong litigation, Scott has clamped down on public conversation about overdoses in an effort to protect the lawsuit, which officials hope could result in a transformative windfall to address the epidemic.
The Scott administration forced the cancellation of four City Council hearings this summer called in response to the Banner/Times investigation, arguing that the hearings could endanger the lawsuit, and has declined to answer many questions about its strategy for combating overdoses.
City leaders previously said a new community cabinet would help provide oversight over the funds but has not answered questions about the group’s membership and responsibilities.
Twenty million dollars — or nearly 45% — of the $45 million settlement the city received from Allergan was used to pay outside lawyers, which experts in government litigation have said is an unusually high amount compared with similar cases. The news release Friday did not say how much of the CVS settlement will go to legal expenses. The mayor’s office had previously declined to answer questions about how litigation costs were calculated.
The city’s news releases announcing the recent settlements named a handful of beneficiaries —between the money coming from CVS and Allergan, $22 million was immediately committed to various community programs. It is unusual to have opioid settlement funds to be earmarked from the outset, according to Regina LaBelle, director of the Addiction and Public Policy Initiative at Georgetown University. Typically, best practices include providing extensive opportunities for public comment and seeking input from diverse stakeholders, she said.
Johns Hopkins Bloomberg School of Public Health’s “The Principles for the Use of Funds from the Opioid Litigation,” for which Whaley was an author, advises government leaders to develop a fair and transparent process for deciding where to spend their money.
Leaders should “solicit and use input from the public,” the guidance says. “This will help raise the profile of the newly developed plan and give those with particular insights — such as families and other members of the recovery community — a chance to weigh in.”
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