Joint Special Council/BFPD
04/17/23 06:00 PM
City Manager Department
Matthew Summers
Resolution
Doc ID: 5334
AGENDA ITEM
AGENDA MATTER:
CONSIDERATION OF RESOLUTION NO. ____-2023 APPROVING PARTICIPATION IN NATIONAL
OPIOID SETTLEMENT AGREEMENT AND AUTHORIZING THE CITY ATTORNEY AND/OR CITY
MANAGER TO EXECUTE THE RELATED PARTICIPATION AGREEMENT
EXECUTIVE SUMMARY:
Staff recommends that the City Council consider the adoption of Resolution No. XXXX-2023, approving a Resolution authorizing participation in the National Opioid Settlement and authorizing the City Attorney and/or City Manager to execute the related participation agreement.
DISCUSSION:
A settlement has been reached in multi-district federal litigation against opioid manufacturers and distributors for their role in the opioid crisis. This is the second settlement that has arisen out of litigation in Ohio. The first settlement involved the three largest pharmaceutical distributors-McKesson, Cardinal Health, and Amerisource Bergen - and the opioid manufacturer Janssen (owned by Johnson & Johnson).
The 3,800 litigants contended that the distributors and Janssen contributed to the national opioid crisis by ignoring signs of opioid addiction and overselling opioids.
On November 15, 2021, the City Council adopted Resolution No. 5068-2021 authorizing the City to enter into a settlement with McKesson, Cardinal Health, Amerisource Bergen, and Johnson & Johnson. That settlement is worth $26 billion and will cover all states, counties, and cities - even those who are not part of the litigation. The opioid distributors will pay $21 billion over an 18-year period and Janssen will pay $5 billion over a 7-year period. Under the terms of the settlement, California is scheduled to receive approximately somewhere between $2.269 and $2.34 billion.
The proposed settlement that is in front of the Council now is with Teva, Allergan, CVS, Walmart, and Walgreens. Jurisdictions must affirmatively opt-in to the settlement before April 18, 2023, to receive funds from the settlement. The City has not received an estimate of how much money it will receive from this proposed settlement if it opts-in, but expects a lower sum as the total settlement is for $20 billion.
If the City opts-in to the settlement, it must release its claims against Teva, Allergan, CVS, Walmart, and Walgreens. In exchange, the City will receive funds, which can be used to combat opioid abuse in the City and for other purposes. As with the first settlement, the funds can only be used to combat the effects of or prevent opioid addiction. Under the terms of the settlement, the City would have to report how it spends funds received from the settlement.
By not acting, the City will not be a participant in the settlement. One advantage of not opting-in to the settlement is that the City would retain the ability to pursue its own litigation against Teva, Allergan, CVS, Walmart, and Walgreens. If the City does not opt-in, then funds to be received by the City or the settlement would instead go directly to the State.
FISCAL IMPACT:
There are no fiscal impacts as a result of this item. If the City decides to opt-in to the settlement, it will have to abide by reporting requirements on how these funds are spent, which may use staff time.
Joint Special Council/BFPD
04/17/23 06:00 PM
City Manager Department
Matthew Summers
Resolution
Doc ID: 5334
AGENDA ITEM
RECOMMENDED ACTION:
Staff recommends that the City Council approve Resolution No. ____-2023 authorizing the City Attorney and/or City Manager to execute the related participation agreement.
The proposed resolution would also authorize the City Manager to enter any future settlements arising out of the national opioid litigation in Ohio without requiring a resolution from the City Council. Additional settlements are expected in the future.
Attachments:
Exhibit A Resolution No. ____-2023 To Approve Participation in National Opioid Settlement Agreement Exhibit B Resolution No. 5068-2021 To Approve Participation in National Opioid Settlement Agreement