Another drugmaker has reached a tentative settlement with Summit and Cuyahoga counties ahead of a landmark trial against dozens of opioid manufacturers and distributors.

U.K.-based Mallinckrodt PLC on Friday announced the settlement in principle with the two counties totaling $30 million.

Under the tentative agreement, Mallinckrodt — which includes subsidiaries Mallinckrodt LLC and SpecGx LLC — will pay $24 million in cash and donate $6 million in generic products, including addiction treatment products. The agreement would also dismiss all named Mallinckrodt entities from the lawsuit with prejudice, meaning it can’t be refiled.

"Mallinckrodt is pleased we were able to reach a settlement in principle with the counties that made sense for all parties," Mallinckrodt general counsel Mark Casey said in a prepared statement. "Resolving the Track 1 Cases gives us the necessary time to continue to work towards a global resolution of the opioid lawsuits."

Summit County and 21 public agencies, towns, cities and villages in it launched a lawsuit in late 2017 demanding that 11 makers and three distributors of pain pills pay for the hundreds of overdose deaths and millions of dollars in public funds spent on the opioid crisis.

Some 2,000 lawsuits filed by local jurisdictions against nearly two dozen big drug companies have been consolidated into one federal case in Cleveland, with Summit and Cuyahoga counties serving as the lead plaintiffs. Gov. Mike DeWine has filed separate lawsuits on behalf of the state.

Judge Dan Polster in the U.S. District Court’s Northern District of Ohio has urged the parties to settle. He has set a firm trial date of Oct. 21.

The proposed settlement with Mallinckrodt will be presented to both Summit and Cuyahoga county councils for consideration, according to a statement from the plaintiffs’ executive committee co-leads Paul T. Farrell Jr., Paul J. Hanly Jr. and Joseph F. Rice.

“The agreement, if approved, will 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. As this resolution moves forward, we cannot lose sight of the fact that every city, every community, and every neighborhood in our country continues to pay the price for this devastating epidemic — in both measurable and immeasurable ways,” the statement reads.

“No one wants the result of this litigation to be mere bankruptcy of companies, but pharmaceutical manufacturers, distributors, and pharmacies that participated in creating the opioid epidemic or knowingly profited from the misconduct must actively participate in abating and helping communities recover from this public health crisis.”

Summit and Cuyahoga counties reached settlements in principle with two Ireland-based drugmakers last month: Endo agreed to pay $10 million and provide $1 million of two of its drugs free of charge to the two counties, while Allergan agreed to pay $5 million, with Cuyahoga getting $3.1 million and Summit getting $1.9 million.

Purdue Pharma is preparing to file for bankruptcy as part of a plan that may include an $11.5 billion settlement to resolve all lawsuits against it, according to Bloomberg.

Summit County Council last month also authorized the county executive to settle claims with some of the smaller defendants in the case: any manufacturing or distributor defendants with less than a 10% share of the opioid market in Summit County.

Frank Gallucci, an attorney representing Cuyahoga County in the case, confirmed the details of the Mallinckrodt settlement Friday afternoon. Greta Johnson, assistant chief of staff to the county executive and the county’s public information officer, declined to comment Friday afternoon because the litigation is ongoing.

Ohio Attorney General Dave Yost has asked a federal court to stop the trial from proceeding in October until the state’s complaint goes to trial, a move Summit County Executive Ilene Shapiro and Akron Mayor Dan Horrigan have sharply criticized.

Yost also faced backlash from Shapiro, Horrigan, DeWine and other local leaders over an earlier plan that would give the attorney general the authority to handle and dismiss lawsuits filed anywhere in Ohio against opioid manufacturers and distributors.

 

Contact Emily Mills at 330-996-3334, emills@thebeaconjournal.com and @EmilyMills818.