Baltimore has reached a $152.5 million settlement with a third pharmaceutical company as part of a lawsuit the city is pursuing over its opioid crisis, Mayor Brandon Scott announced Friday.
The city had already secured $90 million through the litigation this summer.
The agreement with Cardinal Health comes just one day after a Baltimore judge ruled the city’s lawsuit can proceed to a September trial and one week after a separate settlement with CVS. Cardinal Health has agreed to pay the entire amount by the end of the year.
The settlement with Cardinal Health is an “unprecedented recovery” in nationwide opioid litigation, the mayor’s office said in a news release. The Ohio-based pharmaceutical company has been one of the three largest distributors of opioids in Baltimore, according to the mayor’s office, and the settlement far outstrips the funds the city had secured from distributors CVS and Allergan, both of which accounted for much smaller shares of the city’s market for prescription pills.
Scott gambled when he decided not to opt in to a global $400 million settlement with other jurisdictions around Maryland, and the mayor touted the latest settlement as another vindication of that decision.
Scott said in a statement that the city and its outside attorneys have built an “overwhelming” case against the opioid companies, predicting the windfall in settlement funds will have a transformative impact on the city’s efforts to combat its overdose crisis.
“We have said from the beginning that we are committed to do the right thing, not the popular thing or the easy thing — and these settlements are proof that our decision to reject the global settlements and carry on this fight was the right one,” the mayor said.
Cardinal Health said the agreement was part of a commitment to helping solve the opioid crisis.
“This settlement agreement is a prudent way to move forward and end the lengthy litigation process, while helping provide some necessary resources to the Baltimore community,” the company said in a statement.
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 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.
Of the $243 million Baltimore has won in opioid litigation, $42 million has been committed to initiatives aimed at overdose and opioid remediation, including $20 million from the Cardinal Health settlement. That’s an unusual arrangement, Regina LaBelle, director of the Addiction and Public Policy Initiative at Georgetown University, has told The Baltimore Banner, because best practices include providing extensive opportunities for public comment and seeking input from diverse stakeholders.
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. It is unclear how much of the Cardinal Health settlement will go to legal expenses. The mayor’s office had previously declined to answer questions about how litigation costs were calculated.
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 the hearings could endanger the lawsuit.
Five companies — Johnson & Johnson, McKesson, AmerisourceBergen, Teva Pharmaceutical and Walgreens — remain part of the case. The trial is scheduled to begin Sept. 16.
