With major opioid settlement, clock is now ticking for Kansas state and local governments to sign on or fight
With a landmark settlement announced last week between a coalition of state attorneys general, the state of Kansas and more than two dozen local governments will be on the clock to decide whether they want to sign on.
The $26 billion settlement with pharmaceutical distributors Cardinal Health Inc., McKesson Corporation and AmerisourceBergen Corporation, as well as drug manufacturer Johnson & Johnson would resolve thousands of state and local lawsuits nationally.
This includes a lawsuit brought by Attorney General Derek Schmidt, as well as separate suits brought by more than two dozen counties and a handful of city governments. It is among a litany of cases brought against companies involved in paving the way for the opioid crisis in Kansas and nationally.
Earlier this year Schmidt announced the state would receive $4.8 million as part of a national settlement with consulting giant McKinsey, which allegedly helped businesses sell more painkillers.
Schmidt's office said the state's cut of the settlement could range from $90 million to $190 million, depending on a range of factors.
A formula is involved in distributing the funds and in order to qualify for the maximum amount possible, as many state and local governments as possible must drop their lawsuits.
But some governments nationally are already indicating their displeasure with the terms of the settlement and say they won't fall into line.
Under the deal, most — if not all — of the funds has to go toward addiction treatment and prevention. In addition, the companies involved would also agree to help create an independent clearinghouse with state governments to provide better data about where pills are going, among other provisions.
But Washington and West Virginia have already said they won't agree, arguing the financial terms of the deal are insufficient.
Some cities have already indicated they will follow suit. Philadelphia District Attorney Larry Krasner is suing the Pennsylvania attorney general, arguing the state's move to join the deal was infringing on the city's rights and that is was, in Krasner's words a "sellout."
Kansas counties, state weigh options on settlement
John Milburn, a spokesperson for Schmidt, said in an email that "subject to final review of the details of the settlements, we do expect Kansas will join" the settlement.
And it doesn't appear that counties in Kansas are weighing a fight against the settlement, although many attorneys say they haven't yet thoroughly reviewed the terms of the agreement.
Jay Hall, legislative policy director and general counsel for the Kansas Association of Counties, echoed this, noting it was too early in the process for many counties to know for certain.
"If an individual county has had that discussion privately, they may have already made that decision that they are not going to agree," Hall said. "But in the conversations that I've had, that has not been the indication, that there is no way they are going to agree, they are going to pursue their own litigation — I have not heard that."
KAC and the League of Kansas Municipalities are working on an agreement with Schmidt's office consistent with a law passed earlier this year dictating how settlement monies might be dispersed. Attorneys for litigating counties say they have also been involved in that process but declined further comment until an agreement is reached.
The law funnels any funds recovered into two pots of money designated for addiction treatment. One is intended for the state and any local governments that drop their legal challenges and join the state in any settlement. The second is intended for local governments that didn't sue, as a way of discouraging any new lawsuits.
It also bars municipalities from filing their own legal challenges going forward. Any city or county that filed suit since the beginning of 2021 also would have to withdraw the case.
For now, the counties that have filed suits are weighing their options — but time is of the essence. States have 30 days to sign on to the settlement, while local governments have up to 120 days to decide to accept the deal.
“I think that is our plan,” Crawford County Counselor Jim Emerson said last week of signing on to the deal. “I think we’ll have to.”