Major Drug Maker Is Close to Settling Case to Avert First Federal Trial in Opioid Crisis

One of the biggest makers of generic opioids in the United States has reached a tentative settlement of claims to avoid the first federal trial of drug makers, distributors and retail chains for their roles in the opioid epidemic.

Mallinckrodt Pharmaceuticals, a company investigators for the Drug Enforcement Administration once referred to as “the kingpin of the drug cartel,” announced Friday that it had agreed to pay $24 million to two Ohio counties. Under the agreement, the company would also donate $6 million worth of drugs, including addiction treatment medications, to the plaintiffs, Cuyahoga and Summit Counties.

The agreement came six weeks before the start of a trial that is intended to be a litmus test to help assess how much money the industry defendants in nearly 2,300 cases consolidated in federal court may eventually have to pay. The tentative agreement — which applies only to the two counties and does not resolve other legal claims against Mallinckrodt — is one result of a flurry of intensive bargaining in recent weeks among groups of defendants and plaintiffs in opioid cases nationwide.

Judge Dan Aaron Polster of the Federal District Court of Northern Ohio, who is overseeing the trial and all the federal cases, has prodded the parties to reach a global settlement that resolves all claims.

Mallinckrodt’s announcement also came at the end of a week of tough pretrial rulings against all the corporate defendants in the Ohio case by Judge Polster. Essentially, he said that lawyers for the counties had accumulated sufficient evidence to justify a jury trial over whether the companies had caused an epidemic of misuse of prescription painkillers.

Although Purdue Pharma and its owners, members of the billionaire Sackler family, have gripped the nation’s attention because their drug, OxyContin, was an early driver of the crisis, Mallinckrodt has had a much larger share of opioid sales, including of generic versions of oxycodone and hydrocodone.

Between 2006 and 2012, Mallinckrodt manufactured nearly 38 percent of the opioid pills distributed in the United States, according to an analysis of federal data by The Washington Post. Purdue, by contrast, had about 3 percent of the market during the same period.

In legal filings in July, plaintiffs’ lawyers said Mallinckrodt’s products accounted for a quarter of all the opioids dispensed in the two Ohio counties between 2006 and 2014.

In 2017, Mallinckrodt settled with the Drug Enforcement Administration for $35 million, to resolve allegations that it did not report suspicious opioid orders to federal authorities, as required by law. Mallinckrodt, which is legally registered in Ireland, has had an aggressive lobbying operation in Washington.

Lawyers for plaintiffs in the federal opioid litigation said in a statement that the proposed settlement would have to be approved by the county councils. Although a plan for the specific allocation of the funds has yet to be realized, lawyers said the settlement would help provide “both counties critically needed resources in the ongoing response to the opioid crisis as well as protection in any future insolvency proceeding by Mallinckrodt.”

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