Opioid manufacturer Teva Pharmaceuticals will pay Baltimore $80 million for its role in causing the city’s overdose epidemic, the latest legal win in Mayor Brandon Scott’s crusade against pharmaceutical companies, officials said Monday morning.
Teva will pay $32.5 million by the end of the year and will pay the remainder of the $80 million by July 1, 2025, according to a news release. Earlier this year, Baltimore settled cases against CVS, Allergan and Cardinal Health.
With Teva’s settlement, Baltimore has won $322.5 million in settlement monies from opioid manufacturers and distributors, part of a long-running litigation strategy Scott’s administration has pursued as the overdose death toll continued to climb.
Rather than join in litigation led by the Maryland attorney general in conjunction with other states and cities, Baltimore officials opted to file lawsuits against the companies independently. The move, which carried great risk, has proved successful. So far, Baltimore has received more than three times the money it would have received from all available settlements it was eligible to join, and officials are bullish that hundreds of millions more could be secured against the remaining defendants.
With the case set to go to trial a week from today, it’s also possible that more settlements are reached between now and then.
“This settlement marks another major victory for the City of Baltimore and further validates our decision to carry on in the fight to hold these companies accountable,” Scott said in a news release. “Nothing can undo the harm that they caused or bring back the lives lost, but we are determined to implement these resources in a way that helps move our City’s fight against this epidemic forward.”
The influx of money comes in the face of an unprecedented number of overdose deaths. In May, The Baltimore Banner and The New York Times published the first in a series of articles examining the scope of the issue, which found the city is experiencing the highest rate of overdose deaths of any major city in America. The death rate from 2018 to 2022 was nearly double that of any other large city, and higher than nearly all of Appalachia during the prescription pill crisis, The Banner/Times found.
Of the $80 million to be paid by Teva, $5 million will go to “education and outreach efforts” about the 988 system, a hotline for people experiencing crisis or considering suicide. Another $3 million will go to the treatment facility Penn North Recovery Center and $2 million to BMore Power, a harm reduction group.
Two weeks ago, Scott signed an executive order laying out spending guidelines for the funds, which are to be put into a trust. When all the legal fights are over, it’s possible, even likely, the city has an amount on hand to rival the $641 million it received in federal pandemic aid under the American Rescue Plan Act, officials have said.
The trust, which has been compared to a college endowment, will be spent over at least a 15-year period, with a minimum of 5% to be doled out each year.
Under Scott’s plan, spending decisions for the funds will go through multiple layers of review before final approval.
The rest will be put into an opioid trust Scott created two weeks ago by way of executive order. That order laid out the guidelines for spending the majority of the opioid settlement money, which is largely in line with accepted best practices as determined by researchers who study addiction and related issues.
A new “Restitution Advisory Board” will make recommendations, which then will go before a mayor’s “Overdose Cabinet” for review, with Scott getting final say. Community organizations, health care providers and any city agency can apply for money from the trust fund, with the first allocations expected in July at the start of the next budget cycle.
While the proposed process is meant to be transparent and community-oriented, some of the money has been allocated in secret. Each of the city’s four settlements so far have included direct payments, ranging from $1 million to $5 million, to various community health organizations. Officials have declined to explain how those groups were selected because to do so could harm the ongoing settlement talks with other pharmaceutical companies.
There is also the matter of paying attorneys. Susman Godfrey, the private legal firm representing Baltimore, is expected to receive about one-third of the total of every settlement, save for the first one with Allergan for which it got nearly half, according to an email from the city’s law department.
The second annual iMPACT Maryland conference on October 1 will include a discussion about The Banner’s joint investigation with the New York Times into the city’s overdose crisis. More information and tickets are available here.
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