1. 10009474 Canada Inc.
2. 1453350 Ontario Inc.
3. 9985247 Canada Inc.
4. Abic Investment (1959) Ltd.
5. Abic Ltd.
6. AbZ-Pharma GmbH
7. Actavis d.o.o. Belgrade
8. Actavis Dutch Holding B.V.
9. Actavis Elizabeth LLC
10. Actavis Finance LLC
11. Actavis Group PTC ehf.
12. Actavis Holdco US, Inc.
13. Actavis Kadian LLC
14. Actavis Laboratories FL, Inc.
15. Actavis Laboratories UT, Inc.
16. Actavis Limited
17. Actavis LLC
18. Actavis Mid Atlantic LLC
19. Actavis Pharma S. de R.L. de C.V.
20. Actavis Pharma, Inc.
21. Actavis Pharmaceuticals NJ, Inc.
22. Actavis Puerto Rico Holdings Inc.
23. Actavis South Atlantic LLC
24. Actavis Totowa LLC
25. Actavis Ukraine LLC
26. Actavis US Holding LLC
27. Anda Holdco Corp.
28. Anda Marketing, Inc.
29. Anda Pharmaceuticals, Inc.
30. Anda Puerto Rico Inc.
31. Anda Veterinary Supply, Inc.
32. Anda, Inc.
33. Andrx LLC
34. Anesta LLC
35. Arana Therapeutics, Inc.
36. Asaph II B.V.
37. Assia Chemical Industries Ltd.
38. Auspex Pharmaceuticals, Inc.
39. Balkanpharma Dupnitsa AD
40. Barr International Services, Inc.
41. Barr Laboratories, Inc.
42. Barr Pharmaceuticals, LLC
43. Cephalon (UK) Limited
44. Cephalon Australia (VIC) Pty Ltd
45. Cephalon Clinical Partners, LP
46. Cephalon Development Corporation
47. Cephalon LLC
48. CIMA Labs Inc.
49. Circa Pharmaceuticals West, Inc.
50. Cobalt Laboratories LLC
51. Copper Acquisition Corp.
52. Coventry Acquisition, LLC
53. Cupric Holding Co. LLC
54. Cybear, LLC
55. Doral Manufacturing, Inc.
56. East End Insurance, Ltd
57. FEI Products, LLC
58. Gecko Health Innovations, Inc.
59. GeminX Pharmaceuticals Canada, Inc
60. Genchem Pharma LLC
61. Goldline Laboratories, Inc.
62. Inmobiliaria Lemery, S.A. de C.V.
63. INSPIRE INCUBATOR, LIMITED
PARTNERSHIP
64. IVAX (Bermuda) Ltd.
65. IVAX Argentina S.A.
66. IVAX Far East, Inc.
67. IVAX Holdings C.I.
68. IVAX International B.V.
69. IVAX Laboratories Puerto Rico, Inc.
J-2
70. IVAX LLC
71. IVAX Pharmaceuticals B.V.
72. IVAX Pharmaceuticals Caribe, Inc.
73. IVAX Pharmaceuticals Mexico, S.A. de C.V.
74. IVAX Pharmaceuticals NV, LLC
75. IVAX Pharmaceuticals, LLC
76. IVAX Specialty Chemicals Sub, LLC
77. IVAX UK Limited
78. Kilburn B.V.
79. Laboratorio Chile, S.A.
80. Laboratorios Davur S.L.U.
81. Labrys Biologics, Inc.
82. Lemery S.A. de C.V.
83. Limited Liability Company “Teva Ukraine”
84. Maancirkel Holding B.V.
85. Marsam Pharmaceuticals LLC
86. Med All Enterprise Consulting (Shanghai)
Co.,Limited
87. Mepha Investigação, Desenvolvimento e
Fabricação Farmacêutica, Lda.
88. Mepha Pharma AG
89. Mepha Schweiz AG
90. Merckle GmbH
91. MicroDose Therapeutx, Inc.
92. MORIAH BIOTECHNOLOGY LTD
93. Norton (Waterford) Limited
94. Norton Healthcare (1998) Limited
95. Norton Healthcare Limited
96. Novopharm Holdings, Inc.
97. NT Pharma Canada Ltd.
98. Nupathe Inc.
99. Nuvelution TS Pharma, Inc.
100.Odyssey Pharmaceuticals, Inc.
101.Oncotest Teva Ltd
102.Orvet UK
103.Patient Services and Solutions, Inc.
104.Pharma de Espana, Inc.
105.Pharmachemie (Proprietary) Limited
106.Pharmachemie B.V.
107.PharmaPlantex Limited
108.Pharmatrade S.A.
109.PharmNovo LLC
110.Plantex Ltd.
111.PLIVA d.o.o. SARAJEVO
112.PLIVA HRVATSKA d.o.o.
113.PLIVA Ljubljana d.o.o.
114.Pliva Real Estate GmbH
115.PLIVA SKOPJE d.o.o.
116.PLIVA, Inc.
117.Plus Chemicals, branch of Teva
Pharmaceuticals International GmbH
118.PT Actavis Indonesia
119.Rakepoll Holding B.V.
120.ratiopharm - Comercio e Industria de
Produtos Farmaceuticos, Lda.
121.ratiopharm Arzneimittel Vertriebs-GmbH
122.ratiopharm España S.A.
123.ratiopharm GmbH
124.ratiopharm Immobilienverwaltung GmbH &
Co. KG
125.ratiopharm Kazakhstan LLP
126.Representaciones E Investigaciones Medicas
S.A. - also called RIMSA
127.Rise Healthcare Ltd
128.Royce Research and Development Limited
Partner I
129.Salomon, Levin & Elstein Ltd.
130.Sicor de México S.A. de C.V.
131.Sicor Inc.
132.Sicor Società Italiana Corticosteroidi S.r.l.
133.Sindan-Pharma Srl
134.TAGCO Incorporated
135.TAPI Puerto Rico, Inc.
136.Teva API B.V.
137.Teva API Inc.
138.TEVA API INDIA Private Limited
139.Teva API Japan LTD.
140.Teva API Services Mexico, S.de R.L.
de C.V.
141.Teva B.V.
142.Teva Biopharmaceuticals USA, Inc.
143.Teva Biotech GmbH
J-3
144.Teva Branded Pharmaceutical Products
R&D, Inc.
145.Teva Canada Innovation G.P. - S.E.N.C.
146.TEVA CANADA LIMITED / TEVA
CANADA LIMITEE
147.Teva Capital Services Switzerland, branch of
Teva Pharmaceuticals International GmbH
148.Teva Czech Industries s.r.o.
149.Teva Denmark A/S
150.Teva Digital Health, Inc.
151.Teva Farmaceutica Ltda
152.Teva Finance Holding B.V.
153.Teva Finance Services II B.V.
154.Teva Finance Services LLC
155.Teva Finland Oy
156.Teva Global Products Limited Partnership
157.Teva GmbH
158.Teva Health GmbH
159.Teva Healthcare India Private Limited
160.Teva Holdco US, Inc.
161.Teva Holdings GK
162.Teva Holdings Ltd.
163.Teva İlaçları Sanayi ve Ticaret Anonim
Şirketi
164.Teva India Private Limited
165.TEVA INVERSIONES Y
EXPORTACIONES SpA
166.Teva Investments (Pty) Ltd.
167.Teva Israel Ltd
168.Teva İstanbul İlaç San. Ve Tic. Ltd. Şti
169.Teva Italia S.r.l.
170.Teva Laboratoires
171.Teva Limited Liability Company
172.Teva Logistics Services B.V.
173.Teva Medical (Marketing) Ltd.
174.Teva Medical Ltd.
175.Teva Nechasim Ltd.
176.Teva Nederland B.V.
177.Teva Neuroscience, Inc.
178.Teva Norway AS (f.k.a. ratiopharm
Norway AS)
179.TEVA OPERATIONS POLAND SPÓŁKA z
OGRANICZONĄ
ODPOWIEDZIALNOŚCIĄ
180.Teva Parenteral Medicines, Inc.
181.TEVA PERU S.A.
182.Teva Pharma - Produtos Farmacêuticos Lda
183.Teva Pharma (MS) Pty Ltd
184.Teva Pharma (New Zealand) Limited
185.Teva Pharma AG
186.Teva Pharma Australia Pty Ltd
187.Teva Pharma B.V.
188.Teva Pharma Belgium N.V.
189.Teva Pharma EAD
190.Teva Pharma Holdings Limited
191.Teva Pharma Iceland
192.Teva Pharma S.L.U.
193.TEVA PHARMA UK LIMITED
194.Teva Pharmaceutical and Chemical
Industries India Private Limited
195.Teva Pharmaceutical Finance Company B.V.
196.Teva Pharmaceutical Finance Company LLC
197.Teva Pharmaceutical Finance IV B.V.
198.Teva Pharmaceutical Finance IV, LLC
199.Teva Pharmaceutical Finance Netherlands II
B.V.
200.Teva Pharmaceutical Finance Netherlands III
B.V.
201.Teva Pharmaceutical Finance Netherlands IV
B.V.
202.Teva Pharmaceutical Finance V B.V.
203.Teva Pharmaceutical Finance V, LLC
204.Teva Pharmaceutical Finance VI, LLC
205.Teva Pharmaceutical Industries Ltd.
206.Teva Pharmaceutical Information Consulting
(Shanghai) Co., Ltd.
207.Teva Pharmaceutical Investments
Singapore Pte. Ltd
208.Teva Pharmaceutical R&D LP
209.TEVA Pharmaceutical Works Private
Limited Company
210.Teva Pharmaceuticals Australia Pty Ltd
211.Teva Pharmaceuticals Colombia S.A.
212.Teva Pharmaceuticals CR, s.r.o.
J-4
213.Teva Pharmaceuticals Curacao N.V.
214.Teva Pharmaceuticals Europe B.V.
215.Teva Pharmaceuticals Finance
Netherlands B.V.
216.Teva Pharmaceuticals International GmbH
217.TEVA Pharmaceuticals Mexico S.A. de C.V.
218.Teva Pharmaceuticals Panama, S.A
219.Teva Pharmaceuticals Polska spółka z
ograniczoną odpowiedzialnością
220.Teva Pharmaceuticals S.R.L.
221.TEVA Pharmaceuticals Slovakia s.r.o.
222.Teva Pharmaceuticals USA, Inc.
223.Teva Pharmaceuticals, Inc.
224.Teva Puerto Rico LLC
225.Teva Respiratory, LLC
226.Teva Sales and Marketing, Inc.
227.Teva Santé SAS
228.Teva Sweden AB
229.Teva Takeda Pharma Ltd.
230.Teva Takeda Yakuhin Ltd.
231.Teva UK Holdings Limited
232.Teva UK Limited
233.TEVA Uruguay S.A.
234.Teva Women's Health, LLC
235.Tevamiri Limited
236.TEVAPHARM INDIA PRIVATE LTD.
237.TEVCO Incorporated
238.TPI U.S. Holdings, Inc.
239.Transpharm Logistik GmbH
240.UAB Teva Baltics
241.Valmed Pharmaceutical, Inc.
242.Watson Laboratories, Inc.
243.Watson Laboratories, Inc.
244.Watson Laboratories, LLC
245.Watson Management Corporation
K-1
Exhibit K
Subdivision and Special District Settlement Participation Form Governmental Entity State:
Authorized Official
Address 1:
Address 2:
City, State, Zip:
Phone:
Email:
The governmental entity identified above (“Governmental Entity”), in order to obtain and in consideration for the benefits provided to the Governmental Entity pursuant to the Agreement dated November 22, 2022 (“Teva Settlement”), and acting through the undersigned authorized official, hereby elects to participate in the Teva Settlement, release all Released Claims against all Released Entities, and agrees as follows.
1. The Governmental Entity is aware of and has reviewed the Teva Settlement, understands that all terms in this Election and Release have the meanings defined therein, and agrees that by this Election, the Governmental Entity elects to participate in the Teva Settlement as provided therein.
2. Following the execution of this Settlement Participation Form, the Governmental Entity shall comply with Section III.B of the Teva Settlement regarding Cessation of Litigation Activities.
3. The Governmental Entity shall, within 14 days of the Reference Date and prior to the filing of the Consent Judgment, file a request to dismiss with prejudice any Released Claims that it has filed. With respect to any Released Claims pending in In re National Prescription Opiate Litigation, MDL No. 2804, the Governmental Entity authorizes the Plaintiffs’ Executive Committee to execute and file on behalf of the Governmental Entity a Stipulation of Dismissal With Prejudice substantially in the form found at [website link to national settlement website to be provided].
4. The Governmental Entity agrees to the terms of the Teva Settlement pertaining to Subdivisions as defined therein.
5. By agreeing to the terms of the Teva Settlement and becoming a Releasor, the Governmental Entity is entitled to the benefits provided therein, including, if applicable, monetary payments beginning after the Effective Date.
6. The Governmental Entity agrees to use any monies it receives through the Teva Settlement solely for the purposes provided therein.
7. The Governmental Entity submits to the jurisdiction of the court in the Governmental Entity’s state where the Consent Judgment is filed for purposes limited to that court’s K-2
role as provided in, and for resolving disputes to the extent provided in, the Teva Settlement.
8. The Governmental Entity has the right to enforce the Teva Settlement as provided therein.
9. The Governmental Entity, as a Participating Subdivision or Participating Special District, hereby becomes a Releasor for all purposes in the Teva Settlement, including but not limited to all provisions of Section V (Release), and along with all departments, agencies, divisions, boards, commissions, districts, instrumentalities of any kind and attorneys, and any person in their official capacity elected or appointed to serve any of the foregoing and any agency, person, or other entity claiming by or through any of the foregoing, and any other entity identified in the definition of Releasor, provides for a release to the fullest extent of its authority. As a Releasor, the Governmental Entity hereby absolutely, unconditionally, and irrevocably covenants not to bring, file, or claim, or to cause, assist or permit to be brought, filed, or claimed, or to otherwise seek to establish liability for any Released Claims against any Released Entity in any forum whatsoever. The releases provided for in the Teva Settlement are intended by Released Entitles and the Governmental Entity to be broad and shall be interpreted so as to give the Released Entities the broadest possible bar against any liability relating in any way to Released Claims and extend to the full extent of the power of the Governmental Entity to release claims. The Teva Settlement shall be a complete bar to any Released Claim.
10. The Governmental Entity hereby takes on all rights and obligations of a Participating Subdivision or Participating Special District as set forth in the Teva Settlement.
11. In connection with the releases provided for in the Teva Settlement, each Governmental Entity expressly waives, releases, and forever discharges any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States or other jurisdiction, or principle of common law, which is similar, comparable, or equivalent to § 1542 of the California Civil Code, which reads:
General Release; extent. A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.
A Releasor may hereafter discover facts other than or different from those which it knows, believes, or assumes to be true with respect to the Released Claims, but each Governmental Entity hereby expressly waives and fully, finally, and forever settles, releases and discharges, upon the Effective Date, any and all Released Claims that may exist as of such date but which Releasors do not know or suspect to exist, whether through ignorance, oversight, error, negligence or through no fault whatsoever, and which, if known, would materially affect the Governmental Entities’ decision to participate in the Teva Settlement.
K-3
12. Nothing herein is intended to modify in any way the terms of the Teva Settlement, to which Governmental Entity hereby agrees. To the extent this Election and Release is interpreted differently from the Teva Settlement in any respect, the Teva Settlement controls.
I have all necessary power and authorization to execute this Election and Release on behalf of the Governmental Entity.
Signature: __________________________
Name: __________________________
Title: __________________________
Date: __________________________
L-1
Exhibit L
Settlement Fund Administrator
[Plaintiffs to Add]
M-1
Exhibit M
Settlement Payment Schedule
EXHIBIT M-1: PAYMENT SCHEDULE (Excluding Product)
Payment Year Additional
Restitution
Amount & All
Attorneys’ Fees
& Costs Funds
Base Payments
(45%)
Incentives
A, B, & C
(maximum)
(48%)
Incentive D
Part 1
(maximum)
(3.5%)
Incentive D
Part 2
(maximum)
(3.5%)
Total
Abatement
Overall
Total
(Excluding
Product)
Year 1
2023: Effective
Date + 30 days
$65,834,268.30 $226,579,162.39 --- --- --- $226,579,162.39 $292,413,430.69 Year 2
July 15, 2024
$65,834,268.30 $108,757,997.98 $117,821,164.41 --- --- $226,579,162.39 $292,413,430.69 Year 3
July 15, 2025
$65,834,268.29 $108,757,997.98 $117,821,164.41 --- --- $226,579,162.39 $292,413,430.68 Year 4
July 15, 2026
$65,834,268.29 $88,139,294.18 $117,821,164.41 $20,618,703.80 --- $226,579,162.39 $292,413,430.68 Year 5
July 15, 2027
$65,834,268.29 $88,139,294.18 $117,821,164.41 $20,618,703.80 --- $226,579,162.39 $292,413,430.68 Year 6
July 15, 2028
$65,834,268.29 $88,139,294.17 $117,821,164.42 $20,618,703.80 --- $226,579,162.39 $292,413,430.68 Year 7
July 15, 2029
$88,139,294.16 $117,821,164.42 $10,309,351.90 $10,309,351.90 $226,579,162.38 $226,579,162.38 Year 8
July 15, 2030
$88,139,294.16 $117,821,164.42 $10,309,351.90 $10,309,351.90 $226,579,162.38 $226,579,162.38 Year 9
July 15, 2031
$88,139,294.16 $117,821,164.42 $10,309,351.90 $10,309,351.90 $226,579,162.38 $226,579,162.38 Year 10
July 15, 2032
$88,139,294.16 $117,821,164.42 $10,309,351.90 $10,309,351.90 $226,579,162.38 $226,579,162.38 Year 11
July 15, 2033
$88,139,294.16 $117,821,164.42 --- $20,618,703.80 $226,579,162.38 $226,579,162.38 Year 12 $88,139,294.16 $117,821,164.42 --- $20,618,703.80 $226,579,162.38 $226,579,162.38 M-2
July 15, 2034
Year 13
July 15, 2035
$88,139,294.16 $117,821,164.42 --- $20,618,703.80 $226,579,162.38 $226,579,162.38 Total $395,005,609.76 $1,325,488,100.00 $1,413,853,973.00 $103,093,519.00 $103,093,519.00 $2,945,529,111.00 $3,340,534,720.76 M-3
NOTES:
1. All figures for the base and incentive payments are maximum figures that reflect the following:
- The credits amount of $666,032,651 for prior settlements, including San Francisco, have already been applied. - An assumption that all Eligible States are Settling States. - An assumption that all incentives are earned.
2. The Additional Restitution Amount and the state and subdivision fees and costs amounts will be broken out into separate columns before the exhibit is finalized.
3. Any offsets under Section V.C for Non-Settling States would be deducted from the Base Payments and the maximum Incentive Payments (A, B & C and D) by subtracting from all payments the amount of the payment times the State Allocation Percentage assigned to each Non-Settling State in Exhibit F-2.
4. A schedule for Product is in Exhibit M-2 below. Settlement Product (and Settlement Product Cash Conversion Amount) are not included in this Exhibit M-1.
M-4
EXHIBIT M-2: PRODUCT PAYMENT SCHEDULE
Payment Year Settlement Product Maximum
(Valued at WAC)
Settlement Product
Cash Conversion Maximum
Year 1
2023: Effective Date
+ 30 days
--- ---
Year 2
July 15, 2024
$120,000,000.00 $20,000,000.00
Year 3
July 15, 2025
$120,000,000.00 $20,000,000.00
Year 4
July 15, 2026
$120,000,000.00 $20,000,000.00
Year 5
July 15, 2027
$120,000,000.00 $20,000,000.00
Year 6
July 15, 2028
$120,000,000.00 $20,000,000.00
Year 7
July 15, 2029
$120,000,000.00 $20,000,000.00
Year 8
July 15, 2030
$120,000,000.00 $20,000,000.00
Year 9
July 15, 2031
$120,000,000.00 $20,000,000.00
Year 10
July 15, 2032
$120,000,000.00 $20,000,000.00
Year 11
July 15, 2033
$120,000,000.00 $20,000,000.00
Year 12
July 15, 2034
--- $20,000,000.00
Year 13
July 15, 2035
--- $20,000,000.00
Total $1,200,000,000.00 $240,000,000.00
NOTE: The Product Payment Schedule is showing the maximum amount of product offered (valued at WAC), which assumes all states choose to accept their full allotment of Settlement Product, and the maximum available Settlement Product Cash Conversion Amount, which assumes all M-5
states fully convert the Settlement Product to cash payments. The purpose of the chart is to show the periods of time in which Settlement Product or Settlement Product Cash Conversion would be provided and the maximum amount of each per payment year. Individual Settling States will choose between Settlement Product and Settlement Product Cash Conversion (or a mix of both). The maximum amount of Settlement Product available to each Individual Settling State measured in quantity of kits per payment year is shown in Exhibit D, Schedule D-I. The deadlines in Exhibit D govern the Parties’ Settlement Product obligations related to forecasting, ordering, shipment, and delivery. This chart should not suggest any obligation of Teva to provide both the maximum amount of product and the maximum amount of cash conversion.
M-6
EXHIBIT M-3: PAYMENT SCHEDULE FOR FEE FUNDS, COST FUNDS AND ADDITIONAL RESTITUTION (Breakdown of Second Column in Exhibit M-1)
Payment
Year
Attorney Fee
and MDL Cost
Fund
State Cost Fund State Outside
Counsel Fee
Fund
Additional
Restitution
Amount
Total
(Shown in Ex. M1, 2nd Column)
Year 1
2023:
Effective
Date + 30
days
$55,215,837.93 $6,371,058.22 $2,123,686.08 $2,123,686.07 $65,834,268.30 Year 2
July 15, 2024
$55,215,837.93 --- $5,309,215.19 $5,309,215.18 $65,834,268.30 Year 3
July 15, 2025
$55,215,837.92 --- $5,309,215.19 $5,309,215.18 $65,834,268.29 Year 4
July 15, 2026
$55,215,837.92 --- $5,309,215.18 $5,309,215.19 $65,834,268.29 Year 5
July 15, 2027
$55,215,837.92 --- $5,309,215.18 $5,309,215.19 $65,834,268.29 Year 6
July 15, 2028
$55,215,837.92 --- $5,309,215.18 $5,309,215.19 $65,834,268.29 Total $331,295,027.54 $6,371,058.22 $28,669,762.00 $28,669,762.00 $395,005,609.76 N-1
Exhibit N
Additional Restitution Amount Allocation
Alabama 2.3544553964%
American Samoa 0.0252611439%
Arizona 3.5048272664%
Arkansas 1.3753411634%
California 14.6374841151%
Colorado 2.4514797691%
Connecticut 1.9088192709%
District of Columbia 0.2655292635%
Guam 0.0708707436%
Illinois 4.9075008432%
Indiana 3.2706871936%
Iowa 1.0945978299%
Kansas 1.1567892116%
Maine 0.7809353668%
Maryland 3.1138810201%
Massachusetts 3.3985744182%
Michigan 5.0191656318%
Minnesota 1.9139084896%
Missouri 2.9590263237%
Montana 0.4611170652%
N. Mariana Islands 0.0246470315%
Nebraska 0.6154478970%
New Hampshire 0.8534639430%
New Jersey 4.0647812071%
New York 7.9526836824%
North Carolina 4.7952508697%
North Dakota 0.2508461905%
Oregon 2.0273342550%
Pennsylvania 6.7692496373%
South Carolina 2.2710141754%
Tennessee 3.9659507168%
Utah 1.6917508641%
Vermont 0.3754597005%
Virgin Islands 0.0465728102%
Virginia 3.3639612508%
Washington 3.4211884061%
Wisconsin 2.5940380399%
Wyoming 0.2461077964%
O1
Exhibit O
Adoption of a State-Subdivision Agreement
A State-Subdivision Agreement shall be applied if it meets the requirements of Section VIII and is approved by the State and by the State’s Subdivisions as follows:
1. Requirements for Approval. A State-Subdivision Agreement shall be deemed as agreed to when it has been approved by the State and either (a) Subdivisions whose aggregate “Population Percentages,” determined as set forth below, total more than sixty percent (60%), or (b) Subdivisions whose aggregate Population Percentages total more than fifty percent (50%) provided that these Participating Subdivisions also represent fifteen percent (15%) or more of the State’s counties or parishes (or, in the case of Settling States whose counties and parishes do not function as local governments, 15% of or more of the Settling State’s non-county Subdivisions), by number.
2. Approval Authority. Approval by the State shall be by the Attorney General. Approval by a Subdivision shall be by the appropriate official or legislative body pursuant to the required procedures for that Subdivision to agree to a legally binding settlement.
3. Population Percentage Calculation. For purposes of this Exhibit O only, Population Percentages shall be determined as follows: For States with functional counties or parishes4the Population Percentage of each county or parish shall be deemed to be equal to (a) (1) two hundred percent (200%) of the population of such county or parish, minus (2) the aggregate population of all Primary Incorporated Municipalities located in such county or parish, divided by (b) two hundred percent (200%) of the State’s population. A “Primary Incorporated Municipality” means a city, town, village or other municipality incorporated under applicable state law with a population of at least 25,000 that is not located within another incorporated municipality. The Population Percentage of each Primary Incorporated Municipality shall be equal to its population (including the population of any incorporated or unincorporated municipality located therein) divided by two hundred percent (200%) of the State’s population; provided that the Population Percentage of a Primary Incorporated Municipality that is not located within a county shall be equal to two hundred percent (200%) of its population (including the population of any incorporated or unincorporated municipality located therein) divided by two hundred percent (200%) of the State’s population. For all States that do not have functional counties or parishes, the Population Percentage of each non-county Subdivision (including any incorporated or unincorporated municipality located therein), shall be equal to its population divided by the State’s population.
4. Preexisting Agreements and Statutory Provisions. A State may include with the notice to its Subdivisions an existing agreement, a proposed agreement, or statutory provisions regarding the distribution and use of settlement funds and have the acceptance of such an agreement or statutory provision be part of the requirements to be an Initial Participating Subdivision. 4 Certain states do not have counties or parishes that have functional governments, including:
Alaska, Connecticut, Massachusetts, Rhode Island, and Vermont.
O-1
5. Revised Agreements. A State-Subdivision Agreement that has been revised, supplemented, or refined shall be applied if it meets the requirements of Section VIII and is approved by the State and by the State’s Subdivisions pursuant to the terms above.
P-1
Exhibit P
Teva Injunctive Term Sheet
I. DEFINITIONS
A. “Cancer-Related Pain Care” shall mean care that provides relief from pain resulting from a patient’s active cancer or cancer treatment, as distinguished from treatment provided during remission.
B. “CDC Guideline Recommendations” shall mean the 12 enumerated Recommendations published by the U.S. Centers for Disease Control and Prevention (CDC) for the prescribing of opioid pain medication for patients 18 and older in primary care settings as part of its 2016 Guideline for Prescribing Opioids for Chronic Pain (CDC Guidelines), as updated or amended by the CDC.
C. “Downstream Customer Data” shall mean transaction information that Teva collects relating to its direct customers’ sales to Downstream Customers, including but not limited to chargeback data tied to Teva providing certain discounts, “867 data,” and IQVIA data.
D. “Downstream Customers” shall mean the customers to which Teva’s direct customers sell Teva product.
E. “End-of-Life Care” shall mean care for persons with a terminal illness or at high risk for dying in the near future in hospice care, hospitals, long-term care settings, or at home.
F. “Health Care Provider” shall mean any U.S.-based physician or U.S.-based health care practitioner who is licensed to provide health care services or to prescribe pharmaceutical products and any U.S.-based medical facility, practice, hospital, clinic or pharmacy.
G. “Host Institution” shall refer to the academic institution(s) selected by the Settling States to host and maintain the Public Document Repository, by, without limitation: maintaining control and security over documents in the Public Document Repository; providing an accessible user interface; and providing clear and transparent explanations of its procedures to the public.
H. “In-Kind Support” shall mean payment or assistance in the form of goods, commodities, services, or anything else of value.
I. “Investigator Sponsored Study” (ISS) shall mean a study in which an individual both initiates and conducts an investigation, and under whose immediate direction the investigational drug is administered or dispensed. In addition to the standard investigator responsibilities, the sponsor-investigator is also responsible for planning, conducting, and monitoring the study, managing data, preparing reports, and providing oversight, monitoring, and compliance with regulatory reporting requirements.
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J. “Lobby” and “Lobbying” shall have the same meaning as “lobbying activities” and “lobbying contacts” under the federal lobbying disclosure act, 2 U.S.C. § 1602 et seq., and any analogous state or local provisions governing the person or entity being lobbied. As used in this Agreement, “Lobby” and “Lobbying” include Lobbying directly or indirectly, through grantees or Third Parties.
K. “Opioid(s)” shall mean all naturally occurring, synthetic, or semisynthetic substances that interact with opioid receptors and act like opium.
L. “Opioid-Induced Side Effects Treatment Product” shall mean any pharmaceutical product that has been approved by the FDA and indicated for the treatment of Opioid-induced side effects. The term “Opioid-Induced Side Effects Treatment Product” shall not include products that treat opioid abuse, addiction or overdose, or respiratory depression.
M. “Opioid Product(s)” shall mean all current and future medications containing Opioids approved by the U.S. Food & Drug Administration (FDA) and listed by the DEA as Schedule II, III, or IV drugs pursuant to the federal Controlled Substances Act, including but not limited to buprenorphine, codeine, fentanyl, hydrocodone, hydromorphone, meperidine, methadone, morphine, oxycodone, oxymorphone, tapentadol, and tramadol.
The term “Opioid Products(s)” shall not include methadone, buprenorphine, and other substances when used exclusively to treat opioid abuse, addiction or overdose; raw materials and/or immediate precursors used in the manufacture or study of Opioids or Opioid Products, but only when such materials and/or immediate precursors are sold or marketed exclusively to DEA-licensed manufacturers or DEA-licensed researchers.
N. “OUD” shall mean opioid use disorder defined in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM–5), as updated or amended.
O. “Promote,” “Promoting,” and “Promotion” shall mean dissemination of information or other practices intended or that could be reasonably anticipated to (i) increase sales, prescriptions, or the utilization of prescription products in the United States, or (ii) that attempt to influence prescribing practices or formulary decisions in the United States.
These terms shall not include the provision of scientific information or data in response to unsolicited requests from Health Care Providers or payors as allowed in Section II. A. 2. (e)-(h).
P. “Qualified Researcher” shall mean any researcher holding a faculty appointment or research position at an institution of higher education, a research organization, a nonprofit organization, or a government agency.
Q. “Suspicious Order” shall have the same meaning as provided by the Controlled Substances Act, 21 U.S.C. §§ 801-904, and the regulations promulgated thereunder and analogous state laws and regulations.
R. “Teva” shall mean Teva Pharmaceutical Industries Ltd., Teva Pharmaceuticals USA, Inc., Cephalon, Inc., Watson Laboratories, Inc., Actavis LLC, and Actavis Pharma, Inc., f/k/a P-3
Watson Pharma Inc., and each of their parents, subsidiaries, predecessors, successors, affiliates, divisions, assigns, officers, directors, agents, employees and principals, but shall exclude Teva’s wholly owned distributor subsidiary, Anda, Inc. For the avoidance of doubt, Teva does not include entities or individuals controlled by or employed by separate and distinct legal entities that are not directly or indirectly owned by Teva.
S. “Teva Opioid Products” shall mean Vantrela ER and Opioid Products listed on Teva’s product catalog as of the Effective Date or that are added thereafter.
T. “Third Party” shall mean any person or entity other than Teva or a government entity.
U. “Treatment of Pain” shall mean the provision of therapeutic modalities to alleviate or reduce pain.
V. “Unbranded Information” shall mean any information that does not identify a specific product(s).
II. INJUNCTIVE RELIEF
A. Ban on Promotion
1. Teva shall not engage in the Promotion of Opioids or Opioid Products including, but not limited to, by:
a. Employing or contracting with sales representatives or other persons to Promote Opioids or Opioid Products to Health Care Providers or patients, or to persons that influence or determine the Opioid Products included in formularies;
b. Using speakers, key opinion leaders, thought leaders, lecturers, and/or speaking events for Promotion of Opioids or Opioid Products;
c. Sponsoring, or otherwise providing financial support or In-Kind Support to medical education programs relating to Opioids or Opioid Products;
d. Creating, sponsoring, operating, controlling, or otherwise providing financial support or In-Kind Support to any website, network, and/or social or other media account for the Promotion of Opioids or Opioid Products;
e. Creating, sponsoring, distributing, or otherwise providing financial support or In-Kind Support for materials Promoting Opioids or Opioid Products, including, but not limited to, P-4
brochures, newsletters, pamphlets, journals, books, and guides that Promote Opioids or Opioid Products;
f. Creating, sponsoring, or otherwise providing financial support or In-Kind Support for advertisements that Promote Opioids or Opioid Products, including, but not limited to, internet advertisements or similar content that Promote Opioids or Opioid Products, and providing hyperlinks or otherwise directing internet traffic to advertisements that Promote Opioids or Opioid Products; and
g. Engaging in Internet search engine optimization or other techniques designed to Promote Opioids or Opioid Products by improving rankings or making content appear among the top results in an Internet search or otherwise be more visible or more accessible to the public on the Internet.
2. Notwithstanding Section II.A.1 directly above, Teva may:
a. Maintain corporate websites;
b. Maintain a website for any Opioid Product that contains principally the following content: the FDA-approved package insert, medication guide, and labeling, and a statement directing patients or caregivers to speak with a licensed Health Care Provider;
c. Provide information or support the provision of information as expressly required by law or any state or federal government agency with jurisdiction in the State where the information is provided. Teva may, in relation to its expressly required participation in the TIRF REMS program, remain involved in the preparation of materials and training concerning the process for enrollment in the TIRF REMS program; d. Provide the following by mail, electronic mail, on or through Teva’s corporate or product websites or through other electronic or digital methods:
FDA-approved package insert, medication guide, approved labeling for Opioid Products or other prescribing information for Opioid Products that are published by a state or federal government agency with jurisdiction in the State where the information is provided;
e. Provide scientific and/or medical information in response to an unsolicited request by a Health Care Provider consistent with the standards set forth in the FDA’s Draft Guidance for Industry, Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices (Dec. 2011, as updated or amended by the FDA) and Guidance for Industry, Good Reprint Practices for the Distribution of Medical Journal Articles and P-5
Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices (Jan. 2009, as updated or amended by the FDA). However, Teva shall not provide the following publication in response to an unsolicited request by a Health Care Provider: Weinstein, SM, et al., Fentanyl buccal tablet for the treatment of breakthrough pain in opioid-tolerant patients with chronic cancer pain: a long-term, open-label safety study. Cancer; 2009;115:2571-2579. f. Provide a response to any unsolicited question or request from a patient or caregiver, directing the patient or caregiver to the FDA-approved labeling or to speak with a licensed Health Care Provider without describing the safety or effectiveness of Opioids or any Opioid Product (beyond directing the patient or caregiver to the label) or naming any specific provider or healthcare institution; or directing the patient or caregiver to speak with their insurance carrier regarding coverage of an Opioid Product; g. Provide Health Care Economic Information, as defined at 21 U.S.C. § 352(a), to a payor, formulary committee, or other similar entity with knowledge and expertise in the area of health care economic analysis consistent with standards set forth in the FDA’s Draft Questions and Answers Guidance for Industry and Review Staff, Drug and Device Manufacturer Communications With Payors, Formulary Committees, and Similar Entities (Jan. 2018), as updated or amended by the FDA; h. Provide information relating solely to the pricing and availability of any Opioid Product and negotiate contract and pricing terms with direct customers or Downstream Customers;
i. Sponsor or provide financial support or In-Kind Support for an accredited or approved continuing medical education program required by either an FDA-approved Risk Evaluation and Mitigation Strategy (REMS) program or other federal or state law or regulation applicable in the State where the information is provided through an independent Third Party, which shall be
responsible for the continuing medical education program’s content without the participation of Teva; and
j. Provide Unbranded Information in connection with managing pain in End-of-Life Care and/or Cancer-Related Pain Care relating to: the use of Opioids for managing such pain, as long as the Unbranded Information identifies Teva as the source of the information.
3. Teva shall not engage in the following specific Promotional activity relating to any Opioid-Induced Side Effects Treatment Product.
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a. Employing or contracting with sales representatives or other persons to Promote Opioid-Induced Side Effects Treatment Products to Health Care Providers or patients;
b. Using speakers, key opinion leaders, thought leaders, lecturers, and/or speaking events for Promotion of Opioid-Induced Side Effects Treatment Products;
c. Sponsoring, or otherwise providing financial support or In-Kind Support to medical education programs relating to Opioid-Induced Side Effects Treatment Products;
d. Creating, sponsoring, or otherwise providing financial support or InKind Support for advertisements that Promote Opioid-Induced Side Effects Treatment Products, including, but not limited to, internet advertisements or similar content that Promote Opioid-Induced Side Effects Treatment Products, and providing hyperlinks or otherwise directing internet traffic to advertisements that Promote Opioid-Induced Side Effects Treatment Products; and
e. Engaging in any other Promotion of Opioid-Induced Side Effects Treatment Products in a manner that encourages the utilization of Opioids or Opioid Products or normalizes the use of Opioids or Opioid Products for chronic pain.
4. Notwithstanding Section II.A.3 directly above, Teva may engage in Promotional activity for Opioid-Induced Side Effects Treatment Products that have nonOpioid related indications, so long as such Promotion does not explicitly or implicitly associate such Opioid-Induced Side Effects Treatment Product with Opioids or Opioid Products, except for linking to the FDA label associated with such Opioid-Induced Side Effects Treatment Product.
5. Treatment of Pain.
a. Teva shall not, either through Teva or through Third Parties, Promote the Treatment of Pain in a manner that directly or indirectly encourages the utilization of Opioids or Opioid Products.
b. Teva shall not, either through Teva or through Third Parties, Promote the concept that pain is undertreated in a manner that directly or indirectly encourages the utilization of Opioids or Opioid Products. c. Teva shall not disseminate Unbranded Information, including Unbranded Information about a medical condition or disease state that contains links to branded information about Opioid Products or that generates data that Teva uses for Promotion of Opioids or Opioid Products.
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6. To the extent that Teva engages in conduct permitted by Sections II.A.2 and A.4 above, Teva shall do so in a manner that is:
a. Consistent with the CDC Guideline Recommendations, as applicable; and
b. Truthful, non-misleading, accurate, non-deceptive, and does not omit any relevant information.
B. No Financial Reward or Discipline Based on Volume of Opioid Sales
1. Teva shall not provide financial incentives to its sales and marketing employees or discipline its sales and marketing employees based upon sales volume or sales quotas for Opioid Products. However, this provision shall not prohibit financial incentives based on overall company performance.
2. Teva shall not offer or pay any remuneration (including any kickback, bribe, or rebate) not subject to the Discount/Rebate Safe Harbor directly or indirectly, to or from any person in return for the prescribing, sale, use or distribution of Opioid Product.
3. Teva’s compensation policies and procedures shall be designed to ensure compliance with this Agreement and other legal requirements.
C. Ban on Funding/Grants to Third Parties.
1. Teva shall not directly or indirectly provide financial support or In-Kind Support to any Third Party that Promotes or is for education about Opioids, Opioid Products, the Treatment of Pain, or Opioid-Induced Side Effects Treatment Products, excluding financial support otherwise required by the Judgment or by a federal or state agency.
2. Teva shall not create, sponsor, provide financial support or In-Kind Support to, operate, or control any medical society or patient advocacy group relating to any Opioids, Opioid Products, Treatment of Pain, or Opioid-Induced Side Effects Treatment Product.
3. Teva shall not provide a direct link to any Third Party website or materials or otherwise distribute materials created by a Third Party relating to any Opioids, Opioid Products, the Treatment of Pain, or Opioid-Induced Side Effects Treatment Products.
4. The above prohibitions do not prevent Teva from engaging with Third Parties in connection with and consistent with the activities Teva is permitted to undertake pursuant to Sections II.A.2 and II.A.4.
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5. Teva shall not use, assist, or employ any Third Party to engage in any activity that Teva itself would be prohibited from engaging in pursuant to this Agreement.
6. Teva shall not enter into any contract or agreement with any person or entity or otherwise attempt to influence any person or entity in such a manner that has the purpose or foreseeable effect of limiting the dissemination of information regarding the risks and side effects of using Opioids.
7. Teva shall not compensate or support Health Care Providers or organizations to advocate for formulary access or treatment guideline changes that would have the effect of increasing access to any Opioid Product by third-party payers, i.e., any entity, other than an individual, that pays or reimburses for the dispensing of prescription medicines, including, but not limited to, managed care organizations and pharmacy benefit managers.
8. No Board of Directors member, Executive Officer, or senior management-level employee of a United States Teva entity may serve as a director, board member, employee, agent, or officer of any entity that engages in Promotion relating to Opioids, Opioid Products, the Treatment of Pain, or Opioid-Induced Side Effects Treatment Products. For the avoidance of doubt, nothing in this provision shall preclude an officer or executive management-level employee of Teva from concurrently serving on the board of a hospital.
9. Teva shall play no role in appointing persons to the board, or hiring persons to the staff, of any entity that engages in Promotion relating to any Opioids, Opioid Products, the Treatment of Pain, or Opioid-Induced Side Effects Treatment Products.
10. For the avoidance of doubt:
a. Nothing in this Section II.C shall be construed or used to prohibit Teva from providing financial or In-Kind Support to:
i. universities, medical institutions, or hospitals, for the purpose of addressing, or providing education on (I) the treatment of OUD; (II) the prevention and treatment of opioid abuse, addiction, or overdose, including medication-assisted treatment for opioid addiction; and/or (III) rescue medications for opioid overdose; ii. the American Medical Association (AMA), the American Cancer Society (ACS) or any other medical society solely dedicated to cancer treatment; or
iii. broad based trade associations including, without limitation, PhRMA (Pharmaceutical Research and Manufacturers of
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America), HDA (Healthcare Distribution Alliance), AAM
(Association for Accessible Medications), PCMA (Pharmaceutical Care Management Association), and NACDS (National
Association of Chain Drug Stores), or successor organizations to any of the foregoing.
11. Teva will be in compliance with Sections II.C.2 and II.C.3 with respect to support of an individual Third Party to the extent that the Independent Monitor determines that such support does not increase the risk of the inappropriate use of Opioids and that Teva has not acted for the purpose of increasing the use of Opioids.
12. The above prohibitions do not apply to the donation of product pursuant to any settlement agreements or resolutions to litigation and/or investigations.
13. Reference to any specific Third Party organization above shall in no way be construed as an approval or sanction by the States of such Third Party’s conduct or business practices.
D. Lobbying Restrictions.
1. Teva shall not Lobby for the enactment of any federal, state, or local legislation or promulgation of any rule or regulation that:
a. Encourages or requires Health Care Providers to prescribe Opioids or sanctions Health Care Providers for failing to prescribe Opioids or failing to treat pain with Opioids;
b. Would have the effect of limiting access to any non-Opioid alternative pain treatments; or
c. Pertains to the classification of any Opioid or Opioid Product as a scheduled drug under the Controlled Substances Act.
2. Teva shall not Lobby against the enactment of any provision within any federal, state, local legislation, rule, or regulation that supports:
a. The use of non-pharmacologic therapy and/or non-Opioid pharmacologic therapy to treat chronic pain over or instead of Opioid use, including but not limited to third party payment or reimbursement for such therapies;
b. The use and/or prescription of immediate release Opioids instead of extended release Opioids when Opioid use is initiated, including but not limited to third party reimbursement or payment for such prescriptions;
c. The prescribing of the lowest effective dose of an Opioid, including but not limited to third party reimbursement or payment for such prescription; P-10
d. The limitation of initial prescriptions of Opioids to treat acute pain; e. The prescribing and other means of distribution of naloxone to minimize the risk of overdose, including but not limited to third party reimbursement or payment for naloxone;
f. The use of urine testing before starting Opioid use and annual urine testing when Opioids are prescribed, including but not limited to third party reimbursement or payment for such testing;
g. Evidence-based treatment (such as using medication-assisted treatment with buprenorphine or methadone in combination with behavioral therapies) for OUD, including but not limited to third party reimbursement or payment for such treatment; or
h. The implementation or use of Opioid drug disposal systems.
3. Teva shall not Lobby against the enactment of any federal, state or local legislation or promulgation of any rule or regulation expanding the operation or use of PDMPs, including but not limited to provisions requiring Health Care Providers to review PDMPs when Opioid use is initiated and with every prescription thereafter.
4. Notwithstanding the foregoing restrictions in subparagraphs II.D.1-3, the following conduct is not restricted:
a. Challenging the enforcement of, or suing for declaratory or injunctive relief with respect to legislation, rules or regulations referred to in subparagraphs II.D.1;
b. Communications made by Teva in response to a statute, rule, regulation, or order requiring such communication;
c. Communications by a Teva representative appearing before a federal or state legislative or administrative body, committee, or subcommittee as result of a mandatory order or subpoena commanding that person to testify; or Responding, in a manner consistent with this Agreement, to an unsolicited request for the input on the passage of legislation or the promulgation of any rule or regulation when such request is submitted in writing specifically to Teva from a government entity directly involved in the passage of that legislation or promulgation of that rule or regulation;
d. Conduct permitted pursuant to Section II.C.10; or
e. Responding to requests from government agencies and/or participating in panels at the request of a government agency.
5. Teva shall require all of its officers and employees engaged in Lobbying to certify P-11
in writing to Teva that they are aware of and will fully comply with the provisions of this Exhibit P with respect to Lobbying.
E. Monitoring and Reporting of Off-Label Use of Transmucosal ImmediateRelease Fentanyl (TIRF) Products.
1. Teva shall monitor for off-label prescribing of its TIRF products in the United States, including analysis that utilizes prescription and patient diagnosis data, using the TIRF REMS program data accessible to Teva to determine:
a. the indication(s) or diagnoses for which the TIRF product was prescribed in the United States and whether those indications or diagnoses were on-label or offlabel; and b. use by opioid-intolerant patients in the United States.
2. Upon request of one of the following in a Settling State, Teva shall provide the requestor with the data and analysis described in Subsection II.E.1, to be used for law enforcement, counter-detailing, academic or medical research, or public health and other noncommercial purposes: State Attorney General or other law enforcement agency, State medical board, State board of pharmacy, Qualified Researchers, medical and pharmacy directors of health systems or clinics, medical associations, and other public health officials, including but not limited to city health authorities, county medical directors, and State public health authorities.
3. Teva shall provide the data and analysis described in Subsection II.E.1 in chart format, including breakdown of prescriptions by year, diagnosis, and county.
F. Ban on High Dose Opioids.
1. After any related commercial commitments existing on February 15, 2022 have expired, Teva shall not manufacture, promote, or distribute any oxycodone pill that exceeds 40 milligrams.
G. Ban on Prescription Savings Programs.
1. Teva shall not directly or indirectly offer any discounts, coupons, rebates, or other methods which have the effect of reducing or eliminating a patient’s co-payments or the cost of prescriptions (e.g., free trial prescriptions) for any Opioid Product. This does not preclude Teva from offering discounts, rebates, or other customary pricing adjustments to commercial partners for the non-retail sale of any Opioid Product, including providing discounts, coupons, rebates, or other methods for use by retail chain pharmacies, such as CVS, Walgreens, Rite Aid and the like, as well as contracting intermediaries, such as Buying Groups, Group Purchasing Organizations, and Pharmacy Benefit Managers.
2. Teva shall not directly or indirectly provide financial support to any Third Party that offers coupons, discounts, rebates or other methods which have the effect of reducing or P-12
eliminating a patient’s co-payments or the cost of prescriptions (e.g., free trial prescriptions) for any Opioid Product.
3. Teva shall not directly or indirectly assist patients, Health Care Providers, or pharmacies regarding the claims and/or prior authorization process required for third-party payers to approve claims involving any Opioid Product.
H. Monitoring and Reporting of Direct and Downstream Customers.
1. Teva shall operate an effective monitoring and reporting system in compliance with 21 C.F.R. § 1301.71(a), 21 C.F.R. §1301.74(b), 21 U.S.C. § 823(e) and Section 3292 of the SUPPORT for Patients and Communities Act, that shall include processes and procedures that:
a. Utilize all reasonably available transaction information to identify a Suspicious Order of an Opioid Product by a direct customer;
b. Utilize all reasonably available Downstream Customer Data to identify whether a Downstream Customer poses a material risk of diversion of an Opioid Product; c. Utilize all information Teva receives that bears upon a direct customer’s or a Downstream Customer’s diversion activity or potential for diversion activity, including reports by Teva’s employees, customers, Health Care Providers, law enforcement, state, tribal, or federal agencies, or the media; and d. Upon request (unless otherwise required by law), report to a State agency any direct customer or Downstream Customer in such agency’s State identified as part of the monitoring required by (a)-(c), above, and any customer relationship in such State terminated by Teva relating to diversion or potential for diversion.
These reports shall include the following information, to the extent known to Teva:
i. The identity of the downstream registrant and the direct customer(s) identified by Teva engaged in the controlled substance transaction(s), to include each registrant’s name, address, business type, and DEA registration number;
ii. The dates of reported distribution of controlled substances by direct customers to the downstream registrant during the relevant time period; iii. The drug name, drug family or NDC and dosage amounts reportedly distributed;
iv. The transaction or order number of the reported distribution; and v. A brief narrative providing a description of the circumstances leading to Teva’s conclusion that there is a risk of diversion.
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2. Teva shall not provide to any direct customer an Opioid Product to fill an order identified as a Suspicious Order unless Teva’s DEA Compliance Department investigates and finds that the order is not suspicious.
3. Upon request, Teva shall provide full cooperation and assistance to any federal, state or local law enforcement investigations of potential diversion or suspicious circumstances involving Opioid Products, including criminal law enforcement agencies, drug control agencies, professional licensing boards, and Attorney General’s offices.
I. General Terms
1. To the extent that any provision in the Agreement between Teva and the States conflicts with federal or state law or regulation, the requirements of the law or regulation will prevail.
2. Teva shall not make any written or oral statement about Opioids or any Opioid Product that is unfair, false, misleading, deceptive or unconscionable. For purposes of this paragraph, “Opioid Product” shall also include methadone, buprenorphine, and other substances when used exclusively to treat opioid abuse, addiction, or overdose
3. Teva shall not represent that Opioids or any Opioid Product(s) have approvals, characteristics, uses, benefits, or qualities that they do not have. For purposes of this paragraph, “Opioid Product” shall also include methadone, buprenorphine and other substances when used exclusively to treat opioid abuse, addiction, or overdose.
4. For the avoidance of doubt, nothing in this Agreement is intended to or shall be construed to prohibit Teva in any way whatsoever from (a) taking legal or factual positions with regard to its Opioid Product(s) in defense of litigation or other legal proceedings or investigations, (b) communicating its positions and responding to media inquiries concerning litigation, investigations, reports, or other documents or proceedings relating to Teva or its Opioid Products, or (c) maintaining a website explaining its litigation positions and responding to allegations concerning its Opioid Products.
5. Upon the request of any Settling State Attorney General, Teva shall provide the requesting State Attorney General with copies of the following, within 30 days of the request:
a. Any litigation or civil or criminal law enforcement subpoenas or Civil Investigative Demands relating to Teva’s Opioid Product(s); and b. Warning or untitled letters issued by the FDA regarding Teva’s Opioid Product(s) and all correspondence between Teva and the FDA related to such letters.
6. Nothing contained herein shall prohibit Teva from divesting any Opioid or Opioid Product, in each case, including providing technical development services, transferring know-how and patents, and/or providing such other support services in connection therewith, provided P-14
that all provisions of this Exhibit P shall apply to any subsequent purchaser with respect to the divested Opioid or Opioid Product.
7. This Exhibit P applies to the manufacture, sales, Promotion, marketing and distribution by Teva within the United States and its territories or involving Health Care Providers.
8. For the avoidance of doubt, nothing in this Exhibit P is intended to prohibit or restrict Teva's Promotion of non-Opioid products that are approved for the Treatment of Pain (including Ajovy), including by providing educational or other information about such non-Opioid products or providing support or funding to Third Parties specifically to support the use of such non-Opioid products. Teva shall not be restricted from referencing current pain care treatments or treatment modalities for purposes of Promotion of such nonOpioid products so long as such reference does not Promote Opioids or Opioid Products. The exclusion from this Consent Judgment of non-Opioid products approved for the Treatment of Pain shall in no way be construed as an approval or a sanction by the States of Teva’s business practices with respect to any such non-Opioid product.
J. Compliance with All Laws and Regulations Relating to the Sale, Promotion, and Distribution of Any Opioid Product
1. Teva shall comply with all state laws and regulations that relate to the sale, promotion, distribution, and disposal of any Opioid Product, provided that nothing in this paragraph requires Teva to violate federal law or regulations, including but not limited to:
a. State Controlled Substances Act, including all guidance issued by applicable state regulator(s);
b. State Consumer Protection Laws and Unfair Trade Practices Acts; c. State laws and regulations related to opioid prescribing, distribution and disposal; and
d. State Specific Laws.
K. Compliance Deadlines.
1. Teva must be in full compliance with the provisions included in Exhibit P by the Effective Date.
L. Training
1. Teva shall provide regular training, at least once per year, to relevant employees on their obligations imposed by this Agreement.
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III. CLINICAL DATA TRANSPARENCY
A. Data to Be Shared
1. Teva shall share the following clinical data through a third-party data archive that conforms to the requirements defined below to increase the transparency of its clinical research.
a. Teva shall make available all previously disclosed data and/or information regarding Teva Opioid Products;
b. Teva shall make available all previously unreleased data regarding Teva Opioid Products located in its possession, custody or control after a reasonably diligent search, for both approved and unapproved indications, including:
i. Full analyzable data set(s) (including individual participantlevel data de-identified by an independent biostatistician); ii. The clinical study report(s) redacted for commercial or personal identifying information;
iii. The full protocol(s) (including the initial version, final version, and all amendments); and
iv. Full statistical analysis plan(s) (including all amendments and documentation for additional work processes); and
c. Teva shall make available the above information for all studies for any new Teva Opioid Product or new indications within 6 months after regulatory approval or 18 months after study completion, whichever occurs later.
d. Data related to Investigator Sponsored Studies completed prior to the Effective Date are subject to the requirements in this Section III.A.1 if such data can be located in Teva’s possession, custody or control after a reasonably diligent search.
e. Data related to Investigator Sponsored Studies completed after the Effective Date are subject to the requirements of this Section III.A.1.
B. Third-Party Data Archive
1. Teva shall share the above information via a third-party data archive that makes clinical data available to Qualified Researchers with a bona fide scientific research proposal.
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2. The data archive shall have a panel of reviewers with independent review authority to determine whether the researchers are qualified, whether a research application seeks data for bona fide scientific research, and whether a research proposal is complete.
3. The panel may exclude research proposals with a commercial interest.
C. Non Interference
1. Teva shall not interfere with decisions made by the staff or reviewers associated with the third-party data archive.
D. Data Use Agreement
1. Any data sharing agreement with a Qualified Researcher who receives shared data via the third-party data archive shall contain contact information for Teva’s pharmacovigilance staff. Every agreement shall require the lead Qualified Researcher to inform Teva’s pharmacovigilance staff within 24 hours of any determination that research findings could detrimentally impact the risk-benefit assessment regarding the product. The lead Qualified Researcher may also inform regulatory authorities of the safety signal impacting the risk-benefit assessment.
Teva’s pharmacovigilance staff shall take all necessary and appropriate steps upon receipt of such safety information, including but not limited to notifying regulatory authorities or the public.
E. Cost
1. Teva shall bear all costs for making data and/or information available.
IV. TERM
A. Unless addressed in Section IV.B below, each term of this Exhibit P shall apply for thirteen (13) years from the Effective Date.
B. The provisions of Section II.A (“Ban on Promotion”), Section II.I (“General Provisions”), and Section II.J (“Compliance with All Laws and Regulations Relating to the Sale, Promotion and Distribution of Any Opioid Product”) shall not be subject to any term.
V. DOCUMENT DISCLOSURE
A. Documents Subject to Public Disclosure
The following documents must be provided to each Settling State and are subject to public disclosure in perpetuity, except for the redactions authorized by section B:
1. All Teva-produced documents admitted as trial exhibits in In re Opioid Litigation, Index No. 400000/2017 (N.Y. Sup. Ct., Suffolk County), The City and County of P-17
San Francisco, California and the People of the State of California, acting by and through San Francisco City Attorney David Chiu v. Purdue Pharma L.P., et al., Case No. 3:18-cv-7591-CRB (N.D. Cal.), The State of West Virginia ex rel. Patrick Morrisey, Attorney General v. Teva Pharmaceutical Industries Ltd., et al., Civil Action No. 19-C-104 BNE (W. Va. Cir. Ct., Boone County), or The People of the State of California, acting by and through Santa Clara County Counsel James R.
Williams, Orange County District Attorney Tony Rackauckas, Los Angeles County Counsel Mary C. Wickham, and Oakland City Attorney Barbara J. Parker v.
Purdue Pharma L.P., et al., Case No. 30-2014-00725287-CU-BT-CXC (Cal.
Super. Ct., Orange County) and Oklahoma v. Purdue Pharma L.P., et al., No. CJ2017-816 (Cleveland Cty., Okla. Dist. Ct.), together with complete trial transcripts.
2. All Teva deposition transcripts and exhibits from or produced in the matters identified in section A.1, as well as in In re Nat’l Prescription Opiate Litig., No. 1:17-MD-2804 (N.D. Ohio).
3. All summary judgment filings, proposed findings of fact and law, and expert reports relating to the claims against Teva that were filed in the matters identified in section A.2 and A.3, together with related exhibits.
4. All documents, indices, and privilege logs produced in In re Nat’l Prescription Opiate Litig., No. 1:17-MD-2804 (N.D. Ohio) (“the MDL”) bearing the bates prefixes Acquired_Actavis and TEVA_MDL_A and produced on or before October 4, 2019, except personnel files produced on Jan. 16, 2019, Jan. 20, 2019, Feb. 8, 2019, and Aug. 10, 2019.
5. All documents provided under this provision must be provided in an appropriate electronic format with appropriate metadata.
B. Information That Teva May Redact
1. The following categories of information are exempt from public disclosure:
a. Information subject to trade secret protection. A “trade secret” is information, including a formula, pattern, compilation, program, device, method, technique or process, that (a) derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure and use; and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Even if the information falls within the definition, “trade secret” does not include information reflecting sales or promotional strategies, tactics, targeting, or data, or internal communications related to sales or promotion or information in documents dated more than five (5) years before the disclosure required by this section.
b. Confidential personal information. “Confidential personal information” means individual Social Security or tax identification numbers, personal financial account numbers, passport numbers, driver license numbers, home P-18
addresses, home telephone numbers, personal email addresses, and other personally identifiable information protected by law from disclosure. “Confidential personal information” does not include the names of Teva’s officers, directors, employees, consultants, agents, or attorneys or of prescribers or of officials of a government agency.
c. Information that is inappropriate for public disclosure because it is subject to personal privacy interests recognized by law (e.g., HIPAA), or contractual rights of third parties that Teva may not abrogate. d. Information regarding Teva employees’ personal matters unrelated to Teva, including emails produced by Teva custodians discussing vacation or sick leave, family, or other personal matters.
e. Information that is protected by the attorney–client or attorney work product privilege.
f. Financial documents designated as “Highly Confidential” or “Highly Confidential Information” under Case Management Order No. 2 in In re Nat’l Prescription Opiate Litig., No. 1:17-MD-2804 (N.D. Ohio) and produced in response to the April 3, 2019 Ruling Regarding Jurisdictional Discovery on Defendants Teva, and Mallinckrodt, including tax returns including all schedules and attachments, policies regarding accounting, and annual reports.
C. Redaction of Documents Containing Protected Information
1. Whenever a document contains information subject to a claim of exemption pursuant to section B, Teva will provide the document in redacted form. Such redactions must indicate that trade secret and/or private information, as appropriate, has been redacted. Redactions are limited to the minimum redactions possible, consistent with section B.
2. Teva must provide to each Settling State a log noting each document redacted. The log must also provide fields stating the basis for redacting the document, with sufficient detail to allow an assessment of the merits of the assertion. The log is subject to public disclosure in perpetuity. The log shall be provided by the production deadline.
3. In addition to the redacted documents, Teva shall, upon any Settling State’s request, also produce all documents identified in Section A above in unredacted form to such Settling State at the same time, but only to the extent the document was produced by Teva in an unredacted form in the underlying litigation, and only for the purpose of permitting a merits assessment and potential challenge of the redaction pursuant to section VII herein.
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D. Public Disclosure Through a Document Repository
1. Each Settling State may publicly disclose all documents covered by this section through a public repository maintained by a governmental, non-profit, or academic institution. Each Settling State may specify the terms of any such repository’s use of those documents, including allowing the repository to index and make searchable all documents subject to public disclosure, including the metadata associated with those documents.
E. Timeline for Production
1. Teva shall produce all documents required by Section A within nine months from the Effective Date.
F. Support Payment
1. Within thirty (30) calendar days of the Effective Date, Teva will make one-time payments totaling $1,375,000 to the University of California, San Francisco Foundation (UCSF Foundation) and The Johns Hopkins University, to be used to support a public repository of documents subject to this section.
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VI. INDEPENDENT MONITOR
A. Independent Monitor Committee
1. Within thirty (30) calendar days of the Effective Date, the Settling States shall designate a group of States to serve on an Independent Monitor Committee as the Settling States’ representatives in the administration of the relevant terms of these Independent Monitor provisions (hereinafter, “Independent Monitor Committee”).
B. Independent Monitor Selection and Engagement
1. Teva shall engage an Independent Monitor to review Teva’s compliance with this Exhibit P. The Independent Monitor shall have or shall employ or retain personnel who have appropriate qualifications and experience related to the pharmaceutical industry and the laws governing the manufacture, marketing and sale of pharmaceuticals and controlled substances and the applicable requirements of federal and state law. To the extent that additional expertise is required for the engagement, the Independent Monitor may retain the services of third-parties, after consultation with and input from Teva and the Independent Monitor Committee.
2. The Independent Monitor and any retained third-parties shall at all times act in good faith and with integrity and fairness towards all parties.
3. The parties have agreed that the initial Independent Monitor shall be Gil Soffer of Katten, Muchin Rosenman LLP
4. The Independent Monitor can be replaced upon agreement of the Independent Monitor Committee and Teva. If the parties so agree, the process for selecting a replacement Independent Monitor shall be the process described in paragraphs i-iii below. The provisions of this Exhibit P shall apply to any successor Independent Monitor. i. The Independent Monitor Committee and Teva will each identify the names of up to three (3) individuals, groups of individuals or firms as the pool of recommended candidates to serve as the Monitor, within (60) calendar days of the date the parties agree to replace the Monitor.
ii. The Independent Monitor Committee and Teva shall have the right to meet with and otherwise evaluate the candidates and conduct appropriate interviews of the personnel who are expected to work on the project. The following qualifications may be relevant considerations for the Independent Monitor Committee and Teva in evaluating candidates: (a) prior monitorship or oversight experience; (b) experience with federal health care and suspicious order monitoring laws, regulations, and programs; (c) experience with the pharmaceutical or health care industry; (d) access to sufficient resources to carry out the duties of the Monitor; and (e) experience with internal investigations or the investigative process.
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iii. If the Independent Monitor Committee and Teva do not agree on the appointment of any of the candidates from the initial pool of recommendations, the Independent Monitor Committee and/or Teva may identify additional qualified candidates, as the timeline permits. However, in the event the parties fail to reach agreement on a Monitor within ninety (90) calendar days of the date the parties agree to replace the monitor, the Independent Monitor Committee shall appoint an Independent Monitor.
5. In the event that the Independent Monitor Committee and Teva do not agree to the dismissal of the Independent Monitor, either the Independent Monitor Committee (through one of the Settling States on the Independent Monitor Committee) or Teva may submit the question of the Independent Monitor’s dismissal to the court to which the Consent Judgment was presented in any Settling States on the Independent Monitor Committee, and the Independent Monitor shall only be dismissed if the court finds that there is Good Cause for dismissal. Good Cause for dismissal shall mean (a) a material and substantial breach of the terms of this Exhibit P by the Independent Monitor, including the failure to comply with the terms and limitations of this Exhibit P; (b) any act of dishonesty, misappropriation, embezzlement, intentional fraud, or similar conduct by the Independent Monitor; (c) any intentional act of bias or prejudice in favor or against either party by the Independent Monitor; or (d) conduct by the Independent Monitor that demonstrates unfitness to fulfill the functions of the Independent Monitor reasonably and competently. Good Cause shall not include disagreements with the decisions of the Independent Monitor pursuant to this Exhibit P, unless there is a clear pattern in the Independent Monitor’s decisions that demonstrates that the Independent Monitor has not been acting as an independent third party in rendering decisions.
C. Costs of the Independent Monitor
1. Teva shall pay all reasonable and necessary fees and costs of the Independent Monitor. Reasonable and necessary fees and costs shall be limited to those set out in the Independent Monitor work plan and contract, but in no event shall they exceed $1,000,000 per year, inclusive of fees and costs for any personnel or third-parties that the Independent Monitor engages or retains.
D. Term and Reporting Periods
1. The term of the Independent Monitor will be five (5) years from the Effective Date, divided into ten (10) six-month periods for purposes of the reviews and reporting described in Section VI.H (“Reporting Periods”).
2. The Independent Monitor shall be terminated and the oversight shall cease within thirty (30) calendar days of the Independent Monitor Committee receiving a certification from Teva that it has stopped selling Opioid Products for end-use consumption in the United States.
E. Independent Monitor’s Scope of Work
1. The Independent Monitor’s responsibilities shall encompass Teva’s ongoing compliance P-22
with the specific requirements of the Exhibit P as it relates to the following areas: (1) Promotion and sale of Opioids or Opioid Products; (2) Promotion of Opioid-Induced Side Effects Treatment Product; (3) Promotion relating to the Treatment of Pain; (4) Financial Reward or Discipline Based on Volume of Opioid Sales; (5) funding and grants to third parties concerning Opioids, Opioid Products, or the Treatment of Pain; (6) lobbying concerning Opioids, Opioid Products, or the Treatment of Pain; (7) Prescription Savings Programs for Opioid Products; (8) Monitoring and Reporting of Direct and Downstream Customers; (9) training concerning Teva’s obligations under Exhibit P (hereinafter referred to as the “Scope of Work”). The Independent Monitor’s Scope of Work and review applies to the manufacture, sales, Promotion, marketing and distribution by Teva within the United States and its territories or involving Health Care Providers. The Independent Monitor will report his or her findings as provided in Section VI.H below.
2. Within thirty (30) calendar days after the appointment of the Independent Monitor, the Independent Monitor Committee and Teva shall agree with the Independent Monitor on a work plan and contract. The work plan shall set forth in detail the manner in which the Independent Monitor will carry out his or her responsibilities under this Exhibit P, and the general scope of information that the Independent Monitor will seek to review in fulfilling the Independent Monitor’s Scope of Work. It is not intended that the Independent Monitor will conduct his or her own inquiry into the historical events that allegedly gave rise to this Consent Judgment or into matters beyond the scope of the Injunctive Terms of this Consent Judgment. The work plan shall also include all reasonable and necessary costs of the Independent Monitor, as well as a process by which Teva may challenge Independent Monitor costs as excessive, duplicative or unnecessary.
3. If the Independent Monitor, the Independent Monitor Committee and Teva fail to reach agreement on a work plan within the designated time frame, the Independent Monitor Committee shall determine a fair and reasonable work plan and contract in consultation with Teva and the Independent Monitor.
4. At least annually, and more frequently if appropriate, Teva and the Independent Monitor Committee will meet in person or virtually to discuss the work of the Independent Monitor and any suggestions, comments, or improvements Teva may wish to discuss with or propose to the Independent Monitor Committee, including with respect to the scope and costs of the work of the Independent Monitor, unless Teva and the Independent Monitor Committee believe such a meeting is unnecessary.
F. Independent Monitor Access to Information
1. In connection with its review of Teva’s compliance with the terms identified in Section VI.E above, the Independent Monitor shall be vested with reasonably broad discretion to review Teva’s compliance with the terms of Exhibit P covered by the Scope of Work, including access to documents and the right to interview employees, as is reasonably necessary to fulfill its duties under this Consent Judgment, with reasonable notice to Teva and without unreasonable interference in Teva’s or its employees’ ability to perform dayto-day operations. The Independent Monitor shall have all powers reasonable and necessary to efficiently and effectively discharge its responsibilities.
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2. The Chief Compliance Officer of Teva shall serve as the primary point of contact for the Independent Monitor to facilitate the Independent Monitor's reasonable access to documents, materials, or employees necessary to review for compliance with Exhibit P.
The Independent Monitor shall make a good faith effort to leverage Teva’s existing compliance mechanisms when reviewing Teva’s compliance with the terms of Exhibit P identified in Section VI.E, above. The Independent Monitor shall communicate any request for documents, materials, or access to employees to the Chief Compliance Officer, but, subject to the terms hereof, is not prohibited from speaking with any other current or former employees of Teva. Teva shall not intimidate, harass, threaten, or penalize any employee or former employee for his or her cooperation with or assistance to the Independent Monitor.
3. If at any time the Independent Monitor reasonably believes that there is undue delay, resistance, interference, limitation, or denial of access to any records or to any employee deemed necessary by the Independent Monitor to implement or review compliance by Teva with the Injunctive Terms, the Independent Monitor may meet and confer with Teva’s Chief Compliance Officer. If the Independent Monitor cannot resolve such limitation or denial, it shall be immediately reported to the Independent Monitor Committee.
4. To the extent that any of the documents requested by the Independent Monitor contain material protected from disclosure by the attorney-client privilege or attorney work product doctrine, Teva may redact the privileged material before providing the documents to the Independent Monitor.
G. Settling States' Access to Independent Monitor
1. There shall be no limitation on the ability of the Independent Monitor to communicate at any time with Settling States regarding Teva’s conduct.
H. Independent Monitor Reports
1. Observations and Recommendations
i. To the extent that the reviews conducted by the Independent Monitor raise questions or concerns about particular decisions made or conduct engaged in by Teva regarding issues within the Scope of Work, the Independent Monitor may conduct interviews of personnel of Teva who were involved in the decisions or conduct at issue. If the Independent Monitor continues to have questions or concerns about particular decisions or conduct, after conducting interviews, the Independent Monitor shall include a description of the question or concern in the Final Report described below. If the Independent Monitor notes any areas for potential improvement regarding matters within the Scope of Work during the course of the reviews conducted pursuant to the Injunctive Relief Terms, the Independent Monitor shall include any such recommendations in the Final Report.
Collectively, any such questions, concerns or recommendations will be referred to as “Observations and Recommendations.”
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2. Draft and Final Reports
i. No later than thirty (30) calendar days after the close of a Reporting Period and/or at any other time deemed reasonably necessary by the Independent Monitor, the Independent Monitor shall provide Teva with a draft report identifying and detailing any Potential Violations and the bases therefore (the “Draft Report”).
Potential Violations shall mean Teva’s failure to comply with the specific provisions of Exhibit P that the Independent Monitor is tasked with overseeing as set forth in the Scope of Work and work plan, as reasonably determined by the Independent Monitor and supported by documentation (where available).
Identification of Potential Violations in the Draft Report shall not be considered a breach of the Consent Judgment. Teva shall have the right to cure any Potential Violation, in accordance with the below provisions. The Draft Report will also contain detailed descriptions of any Observations and Recommendations. ii. Within thirty (30) calendar days of its receipt of the Draft Report, Teva will provide comments and responses to the Draft Report. Teva will, among other things:
(1) Respond to each Potential Violation, including, where appropriate, explaining why no violation occurred, or describing any corrective action taken (or to be taken) as a result of the findings made by the Independent Monitor, including, where appropriate, providing documentation supporting a relevant decision or additional context explaining the Potential Violation and why it occurred. (2) Respond to each Observation and Recommendation.
iii. Within thirty (30) calendar days of receipt of Teva’s comments and responses to the Draft Report, the Independent Monitor shall provide a final report (the "Final Report"). The Final Report shall be provided simultaneously to the Independent Monitor Committee and Teva. The Independent Monitor Committee may share the Final Report with any Settling State. The Independent Monitor shall provide the Independent Monitor Committee with a copy of any Draft Report that has been subsequently revised upon conferral with Teva and, upon request, the Independent Monitor Committee shall be granted access to any other Draft Reports. iv. The Final Report shall set forth:
(1) The Independent Monitor’s evaluation of Teva’s compliance with the provisions identified in Sections VI.E and VI.F above and the factual basis for the Independent Monitor’s conclusions, including whether a Potential Violation has occurred and an explanation of the nature of the Potential Violation.
(2) The Independent Monitor’s conclusion as to whether Teva has cured any Potential Violations. In the event that the Independent Monitor changes its initial determination after receiving Teva’s response, the Independent Monitor will report its initial determination and its revised determination in the Final Report in sufficient detail so that the Independent Monitor P-25
Committee can evaluate the basis for both determinations. The identification of uncured Potential Violations in the Final Report can be considered a breach of the Consent Judgment.
(3) The Final Report need not recite or describe comprehensively Teva’s history or compliance policies, procedures and practices, but rather may focus on those areas with respect to which the Independent Monitor wishes to make recommendations, if any, for improvement or which the Independent Monitor otherwise concludes merit particular attention.
(4) The Final Report shall include a listing of the Observations and Recommendations made by the Independent Monitor and responses of Teva. v. For the duration of the Independent Monitor’s term, the Settling States may take any action against Teva to enforce the Injunctive Relief terms within the Independent Monitor’s Scope of Work as identified in Section VI.E above upon receiving notice of an uncured Potential Violation in a Final Report. The Settling States are not required to abide by the procedures set forth in the Notice and Cure provision below with regard to such uncured Potential Violations. vi. For the duration of the Independent Monitor’s term, should a Settling State disagree with the Independent Monitor’s determination as to whether a Potential Violation has occurred or been cured under the Injunctive Relief terms within the Independent Monitor’s Scope of Work as identified in Section VI.E above, the Settling State shall meet and confer with the Independent Monitor, the Independent Monitor Committee, and Teva to express its concerns. Teva shall have a reasonable opportunity to explain why it believes it is in compliance with Exhibit P, to further explain the actions taken to cure the Potential Violation and/or to take additional corrective actions to address the state’s concerns. If, after engaging in this meet and confer process and affording Teva a reasonable opportunity to explain or take further action, the Settling State is not satisfied that the Potential Violation has been cured, it may take any action to enforce the terms of this Consent Judgment. vii. Notwithstanding Sections VI.H.2.v and VI.H.2.vi, the Settling States may take any action, including, but not limited to legal action to enforce compliance with the Consent Judgment, without delay if the Settling State believes that a threat to the health or safety of the public requires immediate action. viii. The Independent Monitor's reports and testimony may be used by the Settling States in any action or proceeding. No action or lack of action by the Settling States regarding information received from the Independent Monitor regarding Teva's conduct shall be considered affirmation, acceptance, or ratification of that conduct by the Settling States.
ix. Nothing in this Judgment limits the right of the Settling States to conduct investigations or examinations unrelated to the work of the Independent Monitor.
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I. Confidentiality
1. Teva may designate materials and information that it believes contain trade secret or other commercially sensitive information as “Confidential.” Materials and information provided by Teva to the Independent Monitor that are designated “Confidential” (and any parts, portions, or derivations thereof) and shall not be disclosed or distributed to any person or entity other than those authorized by these provisions, subject to the provisions in Section VI.H.2.e.
2. All materials obtained from Teva by the Independent Monitor and in the Independent Monitor’s possession shall be returned to Teva or destroyed at the conclusion of the Independent Monitor’s term.
3. If any of the Settling States receive a request for disclosure of any material or information received by the Settling State from the Independent Monitor, pursuant to a subpoena, court order, data practices act, freedom of information act, public information act, public records act, or similar law (“Third Party Request”) the Attorney General shall notify Teva of the Third Party Request and the Confidential Information to be disclosed so that Teva may seek a protective order or otherwise challenge or object to the disclosure. Each of the Settling States agrees to provide Teva with at least ten (10) business days' advance notice before complying with any Third-Party Request for Confidential Information, except where state law requires a lesser period of advance notice.
J. Retention of Documents
1. Teva shall generate, retain and make readily available to any of the Settling States for inspection, upon reasonable notice and without the necessity of a subpoena or other legal process, all material records and documents reasonably necessary to document compliance with Exhibit P. Teva shall maintain these records and documents for a minimum of five (5) years after the Independent Monitor's last Final Report.
VII. ENFORCEMENT
A. For the purposes of resolving disputes with respect to compliance with Exhibit P, other than those addressed in Sections VI.H.2.v and VI.H.2.vi, should any of the Settling States have reason to believe that Teva has violated a provision of Exhibit P, then such Settling State shall notify Teva in writing of the specific objection, identify with particularity the provisions of Exhibit P that the practice appears to violate, and give Teva thirty (30) days to respond to the notification (“Response Period”).
B. Upon receipt of written notice from any of the Settling States, Teva shall provide a written response to the Settling State’s notification, containing either a statement explaining why Teva believes it is in compliance with Exhibit P, or a detailed explanation of how the alleged violation occurred and a statement explaining how and when Teva intends to remedy or has remedied the alleged violation. Teva may request a reasonable amount of additional time to cure any violation through such remedial measures (“Cure Period”) and the Settling State shall not unreasonably withhold approval of such request.
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C. The Settling State may not take any action concerning the alleged violation of Exhibit P during the Response and Cure Periods. Nothing shall prevent the Settling State from agreeing in writing to provide Teva with additional time beyond the thirty (30) days to respond to the notice. However, the Settling State may take any action, including, but not limited to legal action to enforce compliance with the Consent Judgment, without delay if the Settling State believes that a threat to the health or safety of the public requires immediate action.
D. The Settling State may bring an action against Teva to enforce the terms of Exhibit P, but only after providing Teva an opportunity to respond to the notification and, if agreed upon, a period to cure any violation, as described above, or within any other period as agreed to by Teva and the Settling State.
E. Nothing in this Consent Judgment shall be interpreted to limit any Settling State’s Civil Investigative Demand (“CID”) or investigative subpoena authority, to the extent such authority exists under applicable state law.
F. Nothing herein shall be construed to exonerate any failure to comply with any provision of Exhibit P after the Effective Date, or to compromise the authority of any Settling State to take action for any failure to comply with Exhibit P.
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Exhibit Q
Anda Injunctive Relief
I. INTRODUCTION
A. Within ninety (90) days of the Effective Date unless otherwise set forth herein, Anda shall implement the injunctive relief terms set forth in Sections II through XIX (the “Injunctive Relief Terms”) in its Controlled Substance Monitoring Program (“CSMP”).
B. The Effective Date of these Injunctive Relief Terms shall be defined by Section I of the Settlement Agreement, dated as of November 22, 2022, which incorporates these Injunctive Relief Terms as Exhibit Q.
C. The parties acknowledge that agreement to the Injunctive Relief Terms does not constitute an admission that Anda’s existing CSMP does not comply with the requirements of law. Anda shall modify its CSMP as required by the Injunctive Relief Terms within ninety (90) days of the Effective Date.
D. The Parties acknowledge that Anda is predominantly a Secondary Source Distributor (as defined herein) to the Anda Customers, has in place a CSMP, and will develop a modified CSMP in accordance with this Agreement, that is tailored to the business of distributing products to Customers as a Secondary Source Distributor. The Parties acknowledge that the Anda CSMP may be different from the CSMPs implemented by other distributors, including other Primary or Secondary Source Distributors.
E. Primary Source Distributors and Secondary Source Distributors may use different analytical tools to identify and characterize Customers’ ordering patterns, order frequencies and order sizes, and deviations therefrom. Analytical tools and, where applicable, algorithms, adopted and implemented by any particular distributor are not dispositive of the appropriate methods and tools to be implemented by Anda or other distributors.
F. Nothing contained herein shall prohibit Anda from divesting any or all of its distribution operations provided that all provisions of this Injunctive Relief shall apply to any subsequent purchaser with respect to the divested operations.
II. TERM
A. The duration of the Injunctive Relief Terms contained in Sections IV through XVI shall be ten (10) years from the Effective Date.
III. DEFINITIONS
A. “Anda.” Anda, Inc. and Anda Pharmaceuticals, Inc. and each of their current and former parents, subsidiaries, predecessors, successors, affiliates, divisions, assigns, officers, directors, agents, employees and principals.
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B. “Audit Report.” As defined in Section XVIII.I.3.
C. “Big 3 Distributor Injunctive Terms.” Exhibit P of the Settlement Agreement, dated as of July 21, 2021, between McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation and certain States and subdivisions.
D. “Chain Customers.” Chain retail pharmacies that have centralized corporate headquarters and have multiple specific retail pharmacy locations from which Controlled Substances are dispensed to individual patients.
E. “Chief Diversion Control Officer.” As defined in Section IV.A.
F. “Clearinghouse.” The system established by Section XVII of the Big 3 Distributor Injunctive Terms.
G. “Clearinghouse Advisory Panel.” As defined in Section XVII.B.4 of the Big 3 Distributor Injunctive Terms.
H. “Controlled Substances.” Those substances designated under schedules II-V pursuant to the federal Controlled Substances Act and the laws and regulations of the Settling States that incorporate federal schedules II-V. For purposes of the requirements of the Injunctive Relief Terms, Gabapentin shall be treated as a Controlled Substance, except for purposes of Section XII for Customers located in States that do not regulate it as a controlled substance or similar designation (e.g., drug of concern).
I. “Corrective Action Plan.” As defined in Section XIX.B.7.b.
J. “CSMP.” As defined in Section I.A.
K. “CSMP Committee.” As defined in Section VI.A.
L. “Customers.” Refers collectively to current, or where applicable potential, Chain Customers and Independent Retail Pharmacy Customers. “Customers” do not include long-term care facilities, hospital pharmacies, and pharmacies that serve exclusively inpatient facilities.
M. “Data Security Event.” Refers to any compromise, or threat that gives rise to a reasonable likelihood of compromise, by unauthorized access or inadvertent disclosure impacting the confidentiality, integrity, or availability of Dispensing Data.
N. “Dispensing Data.” Includes, unless altered by the Clearinghouse Advisory Panel:
(i) unique patient IDs; (ii) patient zip codes; (iii) the dates prescriptions were dispensed; (iv) the NDC numbers of the drugs dispensed; (v) the quantities of drugs dispensed; (vi) the day’s supply of the drugs dispensed; (vii) the methods of payment for the drugs dispensed; (viii) the prescribers’ names; (ix) the prescribers’ NPI or Q-3
DEA numbers; and (x) the prescribers’ zip codes or addresses. The Clearinghouse will be solely responsible for collecting Dispensing Data.
O. “Draft Report.” As defined in Section XVIII.I.1.
P. “Effective Date.” As defined in Section I.B.
Q. “Highly Diverted Controlled Substances.” Includes: (i) oxycodone; (ii) hydrocodone; (iii) hydromorphone; (iv) tramadol; (v) oxymorphone; (vi) morphine; (vii) methadone; (viii) carisoprodol; (ix) alprazolam; and (x) fentanyl. Anda shall annually review this list to determine whether changes are appropriate and shall add Controlled Substances to the list of Highly Diverted Controlled Substances as needed based on information provided by the DEA and/or other sources related to drug diversion trends. Anda shall notify the State Compliance Review Committee and the Monitor of any additions to the list of Highly Diverted Controlled Substances. Access to Controlled Substances predominately used for MedicationAssisted Treatment shall be considered when making such additions.
R. “Independent Retail Pharmacy Customers.” Retail pharmacy locations that do not have centralized corporate headquarters and dispense Controlled Substances to individual patients.
S. “Injunctive Relief Terms.” As defined in Section I.A.
T. “Monitor.” As defined in Section XVIII.
U. “National Arbitration Panel.” As defined by Section I of the Settlement Agreement, dated as of November 22, 2022 which incorporates these Injunctive Relief Terms as Exhibit.
V. “NDC.” National Drug Code.
W. “Non-Controlled Substance.” Prescription medications that are not Controlled Substances.
X. “Notice of Potential Violation.” As defined in Section XIX.B.2.
Y. “Order.” A unique Customer request on a specific date for (i) a certain amount of a specific dosage form or strength of a Controlled Substance or (ii) multiple dosage forms and/or strengths of a Controlled Substance. For the purposes of this definition, each line item on a purchasing document or DEA Form 222 is a separate order, except that a group of line items either in the same drug family or DEA base code (based upon the structure of Anda’s CSMP) may be considered to be a single order.
Z. “Pharmacy Customer Data.” Aggregated and/or non-aggregated data provided by the Customer for a 90-day period.
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1. To the extent feasible based on the functionality of a Customer’s pharmacy management system, Pharmacy Customer Data shall contain (or, in the case of non-aggregated data, shall be sufficient to determine) the following:
a) A list of the total number of prescriptions and dosage units for each NDC for all Controlled Substances and non-Controlled Substances; b) A list of the top five prescribers of each Highly Diverted Controlled Substance by dosage volume and the top ten prescribers of all Highly Diverted Controlled Substances combined by dosage volume. For each prescriber, the data shall include the following information:
(1) Number of prescriptions and doses prescribed for each Highly Diverted Controlled Substance NDC;
(2) Number of prescriptions for each unique dosage amount (number of pills per prescription) for each Highly Diverted Controlled Substance NDC; (3) Prescriber name, DEA registration number, and address; and (4) Medical practice/specialties, if available;
c) Information on whether the method of payment was cash for (a) Controlled Substances, and (b) non-Controlled Substances; and
d) Information on top ten patient residential areas by five-digit ZIP code prefix for filled Highly Diverted Controlled Substances by dosage volume, including number of prescriptions and doses for each Highly Diverted Controlled Substance NDC.
2. Anda is not required to obtain Pharmacy Customer Data for all Customers.
Pharmacy Customer Data only needs to be obtained under circumstances required by the Injunctive Relief Terms and the applicable CSMP policies and procedures. Anda’s CSMP policies and procedures shall describe the appropriate circumstances under which and methods to be used to obtain and analyze Pharmacy Customer Data.
3. Anda shall only collect, use, disclose or retain Pharmacy Customer Data consistent with applicable federal and state privacy and consumer protections laws. Anda shall not be required to collect, use, disclose or retain any data element that is prohibited by law or any element that would require notice to or consent from the party who is the subject of the data element, including, but not limited to, a third party (such as a prescriber) to permit collection, use, disclosure and/or retention of the data.
AA. “Primary Source Distributor.” With respect to any individual Customer, a distributor of pharmaceutical products who serves with respect to such Customer as the primary source of Controlled Substances to such Customer.
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BB. “Potential Violation.” As defined in Section XIX.B.1.
CC. “Reporting Periods.” As defined in Section XVIII.D.1.
DD. “Secondary Source Distributor.” With respect to any individual Customer, a distributor of pharmaceutical products who does not serve with respect to such Customer as the primary source of Controlled Substances to such Customer.
EE. “Settling State.” Means any Eligible State that has entered into the Settlement Agreement, dated as of November 22, 2022 which incorporates these Injunctive Relief Terms as Exhibit Q.
FF. “State Compliance Review Committee.” The initial State Compliance Review Committee members are representatives from the Attorneys General Offices of Connecticut, North Carolina, and Tennessee. The membership of the State Compliance Review Committee may be amended at the discretion of the Settling States.
GG. “Suspicious Orders.” As defined under federal law and regulation and the laws and regulations of the Settling States that incorporate the federal Controlled Substances Act. Suspicious Orders currently include, but are not limited to, orders of unusual size, orders deviating substantially from a normal pattern, and orders of unusual frequency.
HH. “Threshold.” The total volume of a particular drug family, DEA base code, or a particular formulation of a Controlled Substance that Anda shall allow a Customer to purchase in any particular period. This term may be reassessed during Phase 2-B of the Clearinghouse.
II. “Third Party Request.” A request from an entity other than Anda, a Settling State, or the Monitor pursuant to a subpoena, court order, data practices act, freedom of information act, public information act, public records act, or similar law.
JJ. “Top Prescriber.” A prescriber who, for a Customer, is either (i) among the top five (5) prescribers of each Highly Diverted Controlled Substance or (ii) among the top ten (10) prescribers of Highly Diverted Controlled Substances combined, as determined from the most recent Pharmacy Customer Data for that Customer.
IV. CSMP PERSONNEL
A. Anda shall establish or maintain the position of Chief Diversion Control Officer, or other appropriately titled position, to oversee Anda’s CSMP. The Chief Diversion Control Officer shall have appropriate experience regarding compliance with the laws and regulations concerning Controlled Substances, in particular laws and regulations requiring effective controls against the potential diversion of Controlled Substances. The Chief Diversion Control Officer shall report directly to either the Q-6
senior executive responsible for U.S. pharmaceutical distribution or the most senior legal officer at Anda.
B. The Chief Diversion Control Officer shall be responsible for the approval of material revisions to the CSMP.
C. The Chief Diversion Control Officer shall provide at least quarterly reports to the CSMP Committee regarding Anda’s operation of the CSMP, including the implementation of any changes to the CSMP required by these Injunctive Relief Terms.
D. Anda’s CSMP functions, including, but not limited to, the onboarding and approval of new Customers for the sale of Controlled Substances, setting and adjusting Customer Thresholds for Controlled Substances, terminating or suspending Customers, and submitting Suspicious Orders and other reports to Settling States (or the Clearinghouse, when operational), but excluding support necessary to perform these functions, shall be conducted exclusively by Anda’s CSMP personnel or qualified third-party consultants.
E. Staffing levels of Anda’s CSMP department shall be reviewed periodically, but at least on an annual basis, by Anda’s CSMP Committee. This review shall include consideration of relevant developments in technology, law, and regulations to ensure the necessary resources are in place to carry out the program in an effective manner.
F. Personnel in Anda’s CSMP department shall not report to individuals in Anda’s sales department, and sales personnel shall not be authorized to make decisions regarding the promotion, compensation, demotion, admonition, discipline, commendation, periodic performance reviews, hiring, or firing of CSMP personnel.
G. The CSMP policies and procedures shall be published in a form and location readily accessible to all CSMP personnel at Anda.
V. INDEPENDENCE
A. Anda’s sales personnel compensated with commissions shall not be compensated based on revenue or profitability targets or expectations for sales of Controlled Substances. However, Anda’s personnel may, as applicable, be compensated (including incentive compensation) based on formulas that include total sales for all of Anda’s products, including Controlled Substances. The compensation of sales personnel shall not include incentive compensation tied solely to sales of Controlled Substances.
B. For any Anda personnel who are compensated at least in part based on Customer sales, Anda shall ensure the compensation of such personnel is not decreased by a CSMP-related suspension or termination of a Customer or as a direct result of the reduction of sales of Controlled Substances to a Customer pursuant to the CSMP.
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C. Anda’s sales personnel shall not be authorized to make decisions regarding the implementation of CSMP policies and procedures, the design of the CSMP, the setting or adjustment of Thresholds, or other actions taken pursuant to the CSMP, except sales personnel must provide information regarding compliance issues to CSMP personnel promptly. Anda’s sales personnel are prohibited from interfering with, obstructing, or otherwise exerting control over any CSMP department decision-making.
D. Anda shall review its compensation and non-retaliation policies and, if necessary, modify and implement changes to those policies to effectuate the goals of, and incentivize compliance with, the CSMP.
E. Anda shall maintain a telephone, email, and/or web-based “hotline” to permit employees and/or Customers to anonymously report suspected diversion of Controlled Substances or violations of the CSMP, Anda company policy related to the distribution of Controlled Substances, or applicable law. Anda shall share the hotline contact information with their employees and Customers. Anda shall maintain all complaints made to the hotline, and document the determinations and bases for those determinations made in response to all complaints.
VI. OVERSIGHT
A. To the extent not already established, Anda shall establish a committee that includes senior executives with responsibility for legal, compliance, distribution and finance to provide oversight over its CSMP (the “CSMP Committee”). The Chief Diversion Control Officer shall be a member of the CSMP Committee. The CSMP Committee shall not include any employee(s) or person(s) performing any sales functions on behalf of Anda; provided that service on the CSMP Committee by any senior executives listed in this paragraph whose responsibilities may include, but are not limited to, management of sales functions shall not constitute a breach of the Injunctive Relief Terms.
B. Anda’s CSMP Committee shall have regular meetings during which the Chief Diversion Control Officer shall present to the CSMP Committee with respect to, and the CSMP Committee shall evaluate, among other things: (1) any material modifications and potential enhancements to the CSMP including, but not limited to, those relating to Customer due diligence and Suspicious Order monitoring and reporting; (2) any significant new national and regional diversion trends involving Controlled Substances; (3) Anda’s adherence to the CSMP policies and procedures, the Injunctive Relief Terms, and applicable laws and regulations governing the distribution of Controlled Substances; and (4) any technology, staffing, or other resource needs for the CSMP. The CSMP Committee shall have access to all CSMP reports. The CSMP Committee will review and approve the specific metrics used to identify the Red Flags set forth in Section VIII.
C. On a quarterly basis, Anda’s CSMP Committee shall send a written report to Anda’s Chief Executive, Chief Financial, and Chief Legal Officer, as well as its Board of Directors, addressing: (1) Anda’s substantial adherence to the CSMP policies and Q-8
procedures, the Injunctive Relief Terms, and applicable laws and regulations governing the distribution of Controlled Substances; (2) recommendations as appropriate about the allocation of resources to ensure the proper functioning of Anda’s CSMP; and (3) significant revisions to the CSMP. The Board of Directors or a committee thereof at Anda shall document in its minutes its review of the quarterly CSMP Committee reports.
D. To the extent not already established, the Board of Directors of Anda shall establish its own compliance committee (the “Board Compliance Committee”) to evaluate, at a minimum, and on a quarterly basis: (1) the CSMP Committee’s written reports; (2) Anda’s substantial adherence to the CSMP policies and procedures, the Injunctive Relief Terms, and applicable laws and regulations governing the distribution of Controlled Substances; (3) Anda’s code of conduct and any whistleblower reporting policies, including those prescribed by Section V.E; and (4) any significant regulatory and/or government enforcement matters within the review period relating to the distribution of Controlled Substances. Anda meets this requirement if it established, prior to the Effective Date, multiple committees of its Board of Directors that together have responsibilities outlined in this paragraph.
E. The Board Compliance Committee shall have the authority to: (1) require management of Anda to conduct audits on any CSMP or legal and regulatory concern pertaining to Controlled Substances distribution, and to update its full Board of Directors on those audits; (2) to commission studies, reviews, reports, or surveys to evaluate Anda’s CSMP performance; (3) request meetings with Anda’s management and CSMP staff; and (4) review the appointment, compensation, performance, and replacement of Anda’s Chief Diversion Control Officer.
VII. MANDATORY TRAINING
A. Anda shall require all new CSMP personnel to attend trainings on its CSMP, its obligations under the Injunctive Relief Terms, and its duties with respect to maintaining effective controls against potential diversion of Controlled Substances and reporting Suspicious Orders pursuant to state and federal laws and regulations prior to conducting any compliance activities for Anda without supervision.
B. Anda shall provide annual trainings to CSMP personnel on its CSMP, its obligations under the Injunctive Relief Terms, and its duties to maintain effective controls against potential diversion of Controlled Substances and report Suspicious Orders pursuant to state and federal laws and regulations.
C. On an annual basis, Anda shall test its CSMP personnel on their knowledge regarding its CSMP, its obligations under the Injunctive Relief Terms, and its duties to maintain effective controls against potential diversion of Controlled Substances and to report Suspicious Orders pursuant to state and federal laws and regulations.
D. Anda shall train all third-party compliance consultants (defined as non-employees who are expected to devote fifty percent (50%) or more of their time to performing work related to Anda’s CSMP, excluding information technology consultants not Q-9
engaged in substantive functions related to Anda’s CSMP) performing compliance functions for Anda in the same manner as Anda’s CSMP personnel.
E. At least every three (3) years in the case of existing employees, and within the first six (6) months of hiring new employees, Anda shall require operations, sales, and senior executive employees to attend trainings on its CSMP, its obligations under the Injunctive Relief Terms, the hotline established in Section V.E, and its duties to maintain effective controls against potential diversion of Controlled Substances and report Suspicious Orders pursuant to state and federal laws and regulations.
VIII. RED FLAGS
A. Within one hundred and twenty days (120) of the Effective Date, Anda shall, at a minimum, apply specific metrics to identify the potential Red Flags described in Section VIII.D with respect to Independent Retail Pharmacy Customers. For Chain Customers, the metrics used to identify the Red Flags described in Section VIII.D may be adjusted based on the specific business model and supplier relationships of the Chain Customer.
B. Anda shall evaluate and, if necessary, enhance or otherwise adjust the specific metrics it uses to identify Red Flags set forth in Section VIII.D.
C. Anda shall provide annually to the Monitor the specific metrics it uses to identify Red Flags as set forth in Section VIII.D. The Monitor shall review the metrics used to identify Red Flags as set forth in Section VIII.D to assess whether the metrics are reasonable. The Monitor may, at its discretion, suggest revisions to the metrics in the annual Audit Report as part of the Red Flags Review set forth in Section XVIII.G.3.f. Anda may rely on its specific metrics to comply with the requirements of Section VIII unless and until the Monitor proposes a revised metric in connection with Section XVIII.
D. For purposes of the Injunctive Relief Terms, “Red Flags” are defined as follows:
1. Ordering ratio of Highly Diverted Controlled Substances to nonControlled Substances: Analyze the ratio of the order volume of all Highly Diverted Controlled Substances to the order volume of all non-Controlled Substances to identify Customers with significant rates of ordering Highly Diverted Controlled Substances.
2. Ordering ratio of Highly Diverted Controlled Substance base codes or drug families to non-Controlled Substances: Analyze the ratio of the order volume of each Highly Diverted Controlled Substance base code or drug family to the total order volume of all non-Controlled Substances to identify Customers with significant rates of ordering each Highly Diverted Controlled Substance base code or drug family.
3. Excessive ordering growth of Controlled Substances: Analyze significant increases in the ordering volume of Controlled Substances using criteria to Q-10
identify customers that exhibit percentage growth of Controlled Substances substantially in excess of the percentage growth of non-Controlled Substances.
4. Unusual formulation ordering: Analyze ordering of Highly Diverted Controlled Substances to identify customers with significant ordering of high-risk formulations. High-risk formulations include, but are not limited to, 10mg hydrocodone, 8mg hydromorphone, 2mg alprazolam, singleingredient buprenorphine (i.e., buprenorphine without naloxone), and highly-abused formulations of oxycodone. On an annual basis (or as otherwise necessary), high-risk formulations of Highly Diverted Controlled Substances may be added, removed, or revised based on Anda’s assessment and regulatory guidance.
5. Out-of-area patients: Analyze Pharmacy Customer Data or Dispensing Data to assess volume of prescriptions for Highly Diverted Controlled Substances for out-of-area patients (based on number of miles traveled between a patient’s zip code and the pharmacy location, depending on the geographic area of interest) taking into consideration the percentage of outof-area patients for non-Controlled Substances.
6. Cash prescriptions: Analyze Pharmacy Customer Data or Dispensing Data to assess percentage of cash payments for purchases of Controlled Substances taking into consideration the percentage of cash payments for purchases of non-Controlled Substances.
7. Prescriber activity of Customers: Analyze Pharmacy Customer Data or Dispensing Data to identify Customers that are dispensing Highly Diverted Controlled Substance prescriptions for Top Prescribers as follows:
a) Top Prescribers representing a significant volume of dispensing where the prescriber’s practice location is in excess of 50 miles from the pharmacy (“out-of-area”), relative to the percentage of out-ofarea prescriptions for non-Controlled Substances. b) Top Prescribers representing prescriptions for the same Highly Diverted Controlled Substances in the same quantities and dosage forms indicative of pattern prescribing (e.g., a prescriber providing many patients with the same high-dose, high-quantity supply of 30mg oxycodone HCL prescription without attention to the varying medical needs of the prescriber’s patient population).
c) Top Prescribers where the top five (5) or fewer prescribers represent more than fifty percent (50%) of total prescriptions for Highly Diverted Controlled Substances during a specified period.
8. Public regulatory actions against Customers: Review information retrieved from companies that provide licensing and disciplinary history records (e.g., LexisNexis), and/or other public sources, including governmental entities, showing that the Customer, pharmacists working for that Customer, or the Customer’s Top Prescribers have been subject, in the last five (5) years, to professional disciplinary sanctions regarding the Q-11
dispensing or handling of Controlled Substances or law enforcement action related to Controlled Substances diversion. Continued licensing by a relevant state agency may be considered, but shall not be dispositive, in resolving the Red Flag. For Chain Customer locations, representations from each Chain Customer that it reviews its pharmacists’ licensing statuses annually and for the regulatory actions described in this paragraph has either (i) taken appropriate employment action, or (ii) disclosed the regulatory action to Anda, may be considered in resolving the Red Flag.
9. Customer termination data: Review information from Anda’s due diligence files and, when operable, from the Clearinghouse, subject to Section VIII.F, regarding Customers that have been terminated from ordering Controlled Substances by another distributor due to concerns regarding Controlled Substances.
E. For any Red Flag evaluation in Section VIII.D that may be performed using Pharmacy Customer Data or Dispensing Data, Anda will analyze the Red Flag using Pharmacy Customer Data, to the extent feasible based on the functionality of a Customer’s pharmacy management system, until Dispensing Data is collected and analyzed by the Clearinghouse as described in Section XVII. Until Dispensing Data is collected and analyzed by the Clearinghouse, Anda may satisfy the Red Flag evaluations in Sections VIII.D.5 through VIII.D.7 by engaging in considerations of out-of-area patients, cash payments for prescriptions and Top Prescribers without satisfying the specific requirements of Sections VIII.D.5 through VIII.D.7. In the event that the Clearinghouse is not collecting and analyzing Dispensing Data within two years of the Effective Date, Anda and the State Compliance Review Committee shall meet and confer to consider alternatives for the performance of the analysis required by Sections VIII.D.5 through VIII.D.7 using Pharmacy Customer Data.
F. The foregoing Red Flag evaluations may be performed by the Clearinghouse and reported to Anda.
G. Anda and the State Compliance Review Committee shall work in good faith to identify additional potential Red Flags that can be derived from the data analytics to be performed by the Clearinghouse.
IX. ONBOARDING
A. Anda, prior to initiating the sale of Controlled Substances to a potential Customer, a member of Anda’s CSMP department (or a qualified third-party compliance consultant trained on Anda’s CSMP) shall perform the following due diligence:
1. Interview the pharmacist-in-charge, either over the telephone, via videoconference, or in person. The interview shall include questions regarding the manner in which the potential Customer maintains effective controls against the potential diversion of Controlled Substances.
2. Obtain a “Pharmacy Questionnaire” completed by the owner and/or pharmacist-in-charge of the potential Customer. The Pharmacy Questionnaire shall require going-concern potential Customers to list their Q-12
top ten (10) prescribers for Highly Diverted Controlled Substances combined, along with the prescriber’s specialty, unless Anda is able to obtain this data otherwise. The Pharmacy Questionnaire shall also require disclosure of the identity of all other distributors that serve the potential Customer, and whether the potential Customer has been terminated or suspended from ordering Controlled Substances by another distributor and the reason for any termination or suspension. The Pharmacy Questionnaire shall request information that would allow Anda to identify Red Flags, including questions regarding the manner in which the potential Customer maintains effective controls against the potential diversion of Controlled Substances. A potential Customer’s responses to the Pharmacy Questionnaire shall be verified, to the extent applicable and practicable, against external sources (for example, the Clearinghouse, once operational, and Automation of Reports and Consolidated Orders System (“ARCOS”) data made available to Anda by the DEA). The Pharmacy Questionnaire shall be maintained by Anda in a database accessible to its CSMP personnel.
3. Complete a written onboarding report to be maintained in a database accessible to Anda’s CSMP personnel reflecting the findings of the interview and any site visit, the findings regarding the identification of and, if applicable, conclusion concerning any Red Flag associated with the pharmacy, as well as an analysis of the Pharmacy Questionnaire referenced in the preceding paragraph.
4. For going-concern potential Customers, review Pharmacy Customer Data to assist with the identification of any Red Flags.
5. Document whether the potential Customer or the pharmacist-in-charge has been subject to any professional disciplinary sanctions or law enforcement activity related to Controlled Substances dispensing, and, if so, the basis for that action. For Chain Customers, this provision shall apply to the potential specific pharmacies in question.
B. For Chain Customers, Anda may obtain the information in Section IX.A from a corporate representative of the Chain Customer.
C. In the event that Anda identifies one or more unresolved Red Flags or other information indicative of potential diversion of Controlled Substances through the onboarding process or otherwise, Anda shall refrain from selling Controlled Substances to the potential Customer pending additional due diligence. If following additional due diligence, Anda is unable to resolve the Red Flags or other information indicative of diversion, Anda shall not initiate the sale of Controlled Substances to the potential Customer and shall report the potential Customer consistent with Section XIV. If Anda determines that the potential Customer may be onboarded for the sale of Controlled Substances, Anda shall document the decision and the bases for its decision. Such a good faith determination, if Q-13
documented, shall not serve, without more, as the basis of a future claim of noncompliance with the Injunctive Relief Terms. For Chain Customers, these provisions shall apply to the potential specific pharmacies in question.
X. ONGOING DUE DILIGENCE
A. Anda shall periodically review its procedures and systems for detecting patterns or trends in Customer order data or other information used to evaluate whether a Customer is maintaining effective controls against diversion.
B. Anda shall conduct periodic proactive compliance reviews of its Customers’ performance in satisfying their corresponding responsibilities to maintain effective controls against the diversion of Controlled Substances.
C. Anda shall review ARCOS data made available to it by the DEA and, once operational, by the Clearinghouse, to assist with Customer specific due diligence.
For Chain Customers, this provision shall apply to the potential specific pharmacies in question.
D. Anda shall conduct due diligence as set forth in its CSMP policies and procedures in response to concerns of potential diversion of Controlled Substances at its Customers. For Chain Customers, these provisions shall apply to the specific pharmacies in question. The due diligence required by Anda’s CSMP policies and procedures may depend on the information or events at issue. The information or events raising concerns of potential diversion of Controlled Substances at a Customer include but are not limited to:
1. The discovery of one or more unresolved Red Flags;
2. The receipt of information directly from law enforcement or regulators concerning potential diversion of Controlled Substances at or by a Customer;
3. The receipt of information concerning the suspension or revocation of pharmacist’s DEA registration or state license related to potential diversion of Controlled Substances;
4. The receipt of reliable information through the hotline established in Section V.E concerning suspected diversion of Controlled Substances at the Customer;
5. The receipt of reliable information from another distributor concerning suspected diversion of Controlled Substances at the Customer; or
6. Receipt of other reliable information that the Customer is engaged in conduct indicative of diversion or is failing to adhere to its corresponding responsibility to prevent the diversion of Highly Diverted Controlled Substances.
E. On an annual basis, Anda shall obtain updated pharmacy questionnaires from one hundred (100) Customers to include the following:
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1. The top 25 Customers by combined volume of Highly Diverted Controlled Substances purchased from Anda measured as of the end of the relevant calendar year; and
2. Additional Customers selected as a representative sample of various geographic regions, customer types (Independent Retail Pharmacy Customers and Chain Customers), and distribution centers. Anda’s Chief Diversion Control Officer shall develop risk-based criteria for the sample selection.
F. Scope of Review
1. For reviews triggered by Section X.D, Anda shall conduct due diligence and obtain updated Pharmacy Customer Data or equivalent, or more comprehensive data from the Clearinghouse if needed, as set forth in its CSMP policies and procedures.
2. For questionnaires collected pursuant to Section X.E, Anda shall conduct a due diligence review consistent with Anda’s CSMP policies and procedures.
These annual diligence reviews shall be performed in addition to any of the diligence reviews performed under Section X.D, but may reasonably rely on reviews performed under Section X.D.
3. If Anda decides to terminate the Customer due to concerns regarding potential diversion of Controlled Substances, Anda shall promptly cease the sale of Controlled Substances to the Customer and report the Customer consistent with Section XIV. If Anda decides not to terminate the Customer, Anda shall document that determination and the basis therefor. Such a good faith determination, if documented, shall not, without more, serve as the basis of a future claim of non-compliance with the Injunctive Relief Terms.
XI. SITE VISITS
A. Anda shall conduct site visits, including unannounced site visits, where appropriate, of Customers, as necessary, as part of Customer due diligence.
B. During site visits, Anda’s CSMP personnel or qualified third-party compliance consultants shall interview the pharmacist-in-charge or other relevant Customer employees, if appropriate, about any potential Red Flags and the Customer’s maintenance of effective controls against the potential diversion of Controlled Substances.
C. Anda’s CSMP personnel or qualified third-party compliance consultants who conduct site visits shall document the findings of any site visit.
D. Site visit and all other compliance reports shall be maintained by Anda in a database accessible to all CSMP personnel.
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XII. THRESHOLDS
A. Anda shall use Thresholds to identify potentially Suspicious Orders of Controlled Substances from Customers.
B. Anda’s CSMP department shall be responsible for the oversight of the process for establishing and modifying Thresholds. The sales departments of Anda shall not have the authority to establish or adjust Thresholds for any Customer or participate in any decisions regarding establishment or adjustment of Thresholds.
C. Anda shall not provide Customers specific information about their Thresholds or how their Thresholds are calculated.
1. Threshold Setting
a) Anda shall primarily use model-based thresholds. For certain circumstances, Anda may apply a non-model threshold based on documented customer diligence and analysis.
b) Anda shall include in its Annual Threshold Analysis and Assessment Report (as required by Section XVIII.G.3.c) to the Monitor summary statistics regarding the use of non-model thresholds and such information shall be considered by the Monitor as part of its Threshold Setting Process Review in the annual Audit Report. c) For the purposes of establishing and maintaining Thresholds, Anda shall take into account the Controlled Substances diversion risk of each drug base code. The diversion risk of each base code should be defined and reassessed annually by Anda’s CSMP Committee and reviewed by the Monitor.
d) Anda shall establish Thresholds for new Customers prior to supplying those Customers with Controlled Substances and shall continue to have Thresholds in place at all times for each Customer to which it supplies Controlled Substances.
e) When ordering volume from other distributors becomes readily available from the Clearinghouse, Anda shall consider including such information as soon as reasonably practicable in establishing and maintaining Thresholds.
f) Anda shall incorporate the following guiding principles in establishing and maintaining Customer Thresholds, except when inapplicable to non-model Thresholds:
(1) Thresholds shall take into account the number of nonControlled Substance dosage units distributed to, dispensed and/or number of prescriptions dispensed by the Customer to assist with the determination of Customer size. As a general Q-16
matter, smaller customers should have lower Thresholds than larger customers.
(2) For the purposes of establishing and maintaining Thresholds, Anda shall use statistical models that are appropriate to the underlying data.
(3) For the purposes of establishing and maintaining Thresholds, Anda shall take into account a Customer’s ordering and/or dispensing history for a specified period of time.
(4) For the purposes of establishing and maintaining Thresholds, Anda shall take into account the ordering history of
Customers within similar geographic regions, or, where
appropriate for Chain Customers, ordering history within the chain.
(5) If appropriate, Thresholds may take into account the characteristics of Customers with similar business models. (a) A Customer’s statement that it employs a particular business model must be verified, to the extent
practicable, before that business model is taken into
account in establishing and maintaining a Customer’s
Threshold.
2. Threshold Auditing
a) Anda shall review their respective Customer Thresholds at least on an annual basis and modify them where appropriate.
b) Anda’s CSMP department shall annually evaluate its Threshold setting methodology and processes and its CSMP personnel’s performance in adhering to those policies.
3. Threshold Changes
a) Anda may increase or decrease a Customer Threshold as set forth in its CSMP policies and procedures, subject to Sections XII.C.3.b through XII.C.3.e.
b) Prior to approving any Threshold change request by a Customer, Anda shall conduct due diligence to determine whether an increase to the Threshold is warranted. This due diligence shall include obtaining from the Customer the basis for the Threshold change request, obtaining and reviewing Dispensing Data and/or Pharmacy Customer Data for the previous three (3) months for due diligence purposes, and, as needed, conducting an on-site visit to the Customer.
This Threshold change request diligence shall be conducted by Anda’s CSMP personnel.
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c) Anda shall not proactively contact a Customer to suggest that the Customer request an increase to any of its Thresholds, to inform the Customer that its Orders-to-date are approaching its Thresholds or to recommend to the Customer the amount of a requested Threshold increase. It shall not be a violation of this paragraph to provide Chain Customer headquarters reporting on one or more individual Chain Customer pharmacy location(s) to support the anti-diversion efforts of the Chain Customer’s headquarters staff, and it shall not be a violation of this paragraph for Anda’s CSMP personnel to contact Customers to seek to understand a Customer’s ordering patterns. d) Anda’s Chief Diversion Control Officer may approve criteria for potential adjustments to Customer Thresholds to account for circumstances where the Thresholds produced by the ordinary operation of the statistical models require modification. Such circumstances include adjustments to account for seasonal ordering of certain Controlled Substances that are based on documented diligence and analysis, adjustments made to permit ordering of certain Controlled Substances during a declared national or state emergency (e.g., COVID-19 pandemic), IT errors, and data anomalies causing results that are inconsistent with the design of the statistical models. Anda shall include in its Annual Threshold Analysis and Assessment Report (as required by Section
XVIII.G.3.c) to the Monitor information regarding the use of this paragraph and such information shall be considered by the Monitor as part of its Threshold Setting Process Review in the annual Audit Report.
e) Any decision to raise a Customer’s Threshold in response to a request by a Customer to adjust its Threshold must be documented in a writing and state the reason(s) for the change. The decision must be consistent with Anda’s CSMP and documented appropriately.
XIII. SUSPICIOUS ORDER REPORTING AND NON-SHIPMENT
A. Anda shall report Suspicious Orders to the Settling States (“Suspicious Order Reports” or “SORs”), including those Settling States that do not currently require such SORs, at the election of the Settling State.
B. For the SORs required by the Injunctive Relief Terms, Anda shall report Orders that exceed a Threshold for Controlled Substances set pursuant to the processes in Section XII that are blocked and not shipped.
C. Anda shall not ship any Order that it (i) reports pursuant to Sections XIII.A or XIII.B, or (ii) would have been required to report pursuant to Sections XIII.A or XIII.B had the Settling State elected to receive SORs.
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D. In reporting Suspicious Orders to the Settling States, Anda shall file SORs in a standardized electronic format that is uniform among the Settling States and contains the following information fields:
1. Customer name;
2. Customer address;
3. DEA registration number;
4. State pharmacy license number;
5. Date of order;
6. NDC number;
7. Quantity;
8. Explanation for why the order is suspicious (up to 250 characters): Details that are order-specific regarding why an order was flagged as a Suspicious Order, including specific criteria used by Anda’s Threshold system (except phrases such as “order is of unusual size” without any additional detail are not acceptable); and
9. Name and contact information for a knowledgeable designee within Anda’s CSMP department to be a point of contact for the SORs.
E. On a quarterly basis, Anda shall provide a summary report to the Settling States that elect to receive it that provides the following information for the relevant quarter with respect to the top ten (10) Customers by volume for each Highly Diverted Controlled Substance base code that have placed a Suspicious Order for that base code, in that quarter (for Chain Customers, only individual pharmacies in the chain will considered for evaluation as a top ten (10) Customer):
1. The number of SORs submitted for that Customer by base code;
2. The Customer’s order volume by base code for the quarter for all Highly Diverted Controlled Substances;
3. The Customer’s order frequency by base code for the quarter for all Highly Diverted Controlled Substances;
4. For each Highly Diverted Controlled Substance base code, the ratio of the Customer’s order volume for that base code to the volume of all pharmaceutical orders for the quarter; and
5. The ratio of the Customer’s order volume of all Controlled Substances to the volume of all pharmaceutical orders for the quarter.
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F. Anda shall only be required to file a single, uniform, electronic form of SOR with any Settling State that receives SORs pursuant to these Injunctive Relief Terms. A Settling State retains the authority pursuant to applicable state law or relevant state agency authority to request additional information about a particular SOR.
G. It is the objective of the Settling States and Anda for Anda to provide SORs to Settling States that identify the same Suspicious Orders as reported to the DEA pursuant to the definition and requirements of the federal Controlled Substances Act and its regulations, although the fields of the SORs submitted to the Settling States as required by Section XIII may differ from the content required by the DEA. To the extent federal definitions and requirements materially change during the term of the Injunctive Relief Terms, Anda may be required to adjust the format and content of the SORs to meet these federal requirements. Anda and the State Compliance Review Committee will engage in good faith discussions regarding such adjustments.
H. It shall not be a violation of the Injunctive Relief Terms if Anda ships a Suspicious Order or fails to submit or transmit a SOR if:
1. The shipment of the Suspicious Order or failed SOR transmission was due to a computer error (data entry mistakes, coding errors, computer logic issues, software malfunctions, and other computer errors or IT failures); and
2. Anda reports the error, including a description of measures that will be taken to prevent recurrence of the error, to any affected Settling State, the State Compliance Review Committee, and the Monitor within five (5) business days of its discovery.
XIV. TERMINATED CUSTOMERS
A. Anda shall report to the Clearinghouse, once operational, within five (5) business days (or as otherwise required by state statute or regulation), Customers it has terminated from eligibility to receive Controlled Substances or refused to onboard for the sale of Controlled Substances due to concerns regarding the Customer’s ability to provide effective controls against the potential diversion of Controlled Substances following the Effective Date.
B. Anda shall report to the relevant Settling State(s), within five (5) business days (or as otherwise required by state statute or regulation) Customers located in such Settling States that it has terminated from eligibility to receive Controlled Substances or refused to onboard for the sale of Controlled Substances due to concerns regarding the Customer’s ability to provide effective controls against the potential diversion of Controlled Substances following the Effective Date. Such reports will be made in a uniform format. Anda and the State Compliance Review Committee shall use best efforts to agree on such uniform format for inclusion prior to the requirement taking effect.
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C. In determining whether a Customer should be terminated from eligibility to receive Controlled Substances, Anda shall apply factors set out in its CSMP policies and procedures, which shall include the following conduct by a Customer:
1. Has generated an excessive number of Suspicious Orders, which cannot otherwise be explained;
2. Has routinely demonstrated unresolved Red Flag activity;
3. Has continued to fill prescriptions for Highly Diverted Controlled Substances that raise Red Flags following Anda’s warning or communication about such practices;
4. Has failed to provide Pharmacy Customer Data or Dispensing Data in response to a request from Anda or otherwise refuses to cooperate with Anda’s CSMP after providing the Customer with a reasonable amount of time to respond to Anda’s requests;
5. Has been found to have made material omissions or false statements on a Pharmacy Questionnaire (the requirements for the contents of a Pharmacy Questionnaire are described in Section IX); or
6. Has been the subject of discipline by a State Board of Pharmacy within the past three (3) years or has had its owner(s) or pharmacist-in-charge subject to license probation or termination within the past five (5) years by a State Board of Pharmacy for matters related to Controlled Substances dispensing or a federal or state felony conviction.
D. Once the Clearinghouse has made Customer termination data available to Anda, Anda shall consider terminating Customers that have been terminated from eligibility to receive Controlled Substances by another distributor as a result of suspected diversion of Controlled Substances if the Customer is ordering only Controlled Substances from Anda. If Anda determines not to terminate Customers to which this paragraph applies, Anda shall document its decision-making. A good-faith decision to continue shipping Controlled Substances to Customers to which this paragraph applies, shall not serve, without more, as the basis of a future claim of non-compliance with the Injunctive Relief Terms.
E. For Chain Customers, the provisions in Section XIV.A-D shall apply to the specific pharmacies in question.
XV. EMERGENCIES
A. In the circumstances of declared national or state emergencies in which the healthcare community relies on Anda for critical medicines, medical supplies, products, and services, Anda may be required to temporarily modify its CSMP processes to meet the critical needs of the supply chain. These modifications may conflict with the requirements of the Injunctive Relief Terms.
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B. In the case of a declared national or state emergency, Anda shall be required to give notice to the State Compliance Review Committee of any temporary material changes to its CSMP processes which may conflict with the requirements of the Injunctive Relief Terms and specify the sections of the Injunctive Relief Terms which will be affected by the temporary change.
C. Anda shall document all temporary changes to their CSMP processes and appropriately document all customer-specific actions taken as a result of the declared national or state emergency.
D. Anda shall provide notice to the State Compliance Review Committee at the conclusion of the declared national or state emergency, or sooner, stating that the temporary CSMP processes put into place have been suspended.
E. Provided Anda complies with the provisions of Sections XV.A through XV.D, Anda will not face liability for any deviations from the requirements of the Injunctive Relief Terms taken in good faith to meet the critical needs of the supply chain in response to the declared national or state emergency. Nothing herein shall limit Settling States from pursuing claims against Anda based on deviations from the requirements of the Injunctive Relief Terms not taken in good faith to meet the critical needs of the supply chain in response to a declared national or state emergency.
XVI. COMPLIANCE WITH LAWS AND RECORDKEEPING
A. Anda acknowledge and agree that it must comply with applicable state and federal laws governing the distribution of Controlled Substances.
B. Good faith compliance with the Injunctive Relief Terms creates a presumption that Anda is acting reasonably and in the public interest with respect to Settling States’ existing laws requiring effective controls against diversion of Controlled Substances and with respect to the identification, reporting, and blocking of Suspicious Orders of Controlled Substances.
C. The requirements of the Injunctive Relief Terms are in addition to, and not in lieu of, any other requirements of state or federal law applicable to Controlled Substances distribution. Except as provided in Section XVI.D, nothing in the Injunctive Relief Terms shall be construed as relieving Anda of the obligation to comply with such laws, regulations, or rules. No provision of the Injunctive Relief Terms shall be deemed as permission for Anda to engage in any acts or practices prohibited by such laws, regulations, or rules.
D. In the event of a conflict between the requirements of the Injunctive Relief Terms and any other law, regulation, or requirement such that Anda cannot comply with the law without violating the Injunctive Relief Terms or being subject to adverse action, including fines and penalties, Anda shall document such conflicts and notify the State Compliance Review Committee and any affected Settling State the extent to which it will comply with the Injunctive Relief Terms in order to eliminate the conflict within thirty (30) days of Anda’s discovery of the conflict. Anda shall comply with the Injunctive Relief Terms to the fullest extent possible without violating the law.
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E. In the event of a change or modification of federal or state law governing the distribution of Controlled Substances that creates an actual or potential conflict with the Injunctive Relief Terms, Anda, any affected Settling State, or the State Compliance Review Committee may request that Anda, State Compliance Review Committee, and any affected Settling State meet and confer regarding the law change.
During the meet and confer, Anda, the State Compliance Review Committee, and any affected Settling State will address whether the change or modification in federal or state law requires an amendment to the Injunctive Relief Terms. In the event Anda, the State Compliance Review Committee, and any affected Settling State cannot agree on a resolution, and the dispute relates to whether the generally applicable Injunctive Relief Terms herein should be changed, Anda, the State Compliance Review Committee, or any affected Settling State may submit the question to the National Arbitration Panel. If the dispute relates to whether a change in an individual State’s law requires a modification of the Injunctive Relief Terms only with respect to that State, Anda, the State Compliance Review Committee, or any affected Settling State may seek resolution of the dispute pursuant to Section XIX. Maintenance of competition in the industry and the potential burden of inconsistent obligations on Anda shall be a relevant consideration in such resolution.
F. Recordkeeping: Anda shall retain records it is required to create pursuant to its obligations hereunder in an electronic or otherwise readily accessible format. The Settling States shall have the right to review records provided to the Monitor pursuant to Section XVIII. Nothing in the Injunctive Relief Terms prohibits a Settling State from issuing a lawful subpoena for records pursuant to an applicable law.
XVII. CLEARINGHOUSE
A. Starting ninety (90) days after the Effective Date, Anda shall participate in Phase 1 and Phase 2-A of the Clearinghouse.
B. Anda shall provide to the Clearinghouse and/or facilitate the Clearinghouse’s collection of the following:
1. Anda’s transaction data for Controlled Substances and non-Controlled Substances, specified at the NDC, date, quantity, and customer level.
2. Anda’s information on Customers that have been terminated and/or declined onboarding due to concerns regarding Controlled Substance dispensing following the Effective Date.
C. Anda shall comply with state and federal transactional and Suspicious Order reporting requirements related to Controlled Substances as follows:
1. Until such time as the Clearinghouse is able to provide transactional and Suspicious Order regulatory reporting to the states on behalf of Anda, Anda shall continue to file all required reports under state law and those reports required by these Injunctive Relief Terms.
2. Once the Clearinghouse is able to process and submit such reports, the Clearinghouse may process and submit those reports on behalf of Anda to Q-23
the states. At all times during Phase 1, Anda shall remain responsible for the identification of Suspicious Orders and will remain liable for a failure to submit transactional data or Suspicious Order reports required under state law or these Injunctive Relief Terms.
3. Anda may elect to fulfill its reporting obligations directly, rather than have the Clearinghouse assume the responsibility for the transmission of the various reports.
D. Anda shall receive information, analyses and reports from the Clearinghouse on the same basis as other distributors participating in Phase 1 and 2-A of the Clearinghouse.
1. Anda shall be permitted to use information obtained from the Clearinghouse for anti-diversion purposes, including the uses expressly contemplated by the Injunctive Relief Terms.
2. Anda shall ensure any data obtained from the Clearinghouse cannot be accessed by any of its parent’s business units, or their employees or agents, who are involved in manufacturing or marketing of pharmaceuticals or sales or distribution of pharmaceuticals they manufacture.
3. Anda shall not receive from the Clearinghouse information specific to another distributor. Notwithstanding the prior sentence, Anda may receive from the Clearinghouse blinded data reflecting total Orders (across all distributors) for a particular Customer, region, and/or state at the base code and NDC number level and all transactional data information.
4. Anda may use information it receives from the Clearinghouse only for the purposes of identifying, minimizing, or otherwise addressing the risk of Controlled Substances diversion. Anda shall not attempt to obtain revenue from this information.
5. Anda shall not sell (or obtain license fees for) data obtained from Clearinghouse to any third-parties. Nothing in the Injunctive Relief Terms shall prohibit Anda from using its own data, including data provided to Anda by third-parties other than the Clearinghouse, for any commercial purposes, including selling or licensing its data to third-parties.
E. Anda, in its sole discretion, may elect whether to participate in Phase 2-B of the Clearinghouse. CSMP functions that are assumed by the Clearinghouse during Phase 2-B will no longer be performed by Anda individually through its CSMPs. CSMP functions performed by the Clearinghouse during Phase 2-B will assist Anda to satisfy the applicable legal obligations of Anda. In the event that Anda elects not to participate in Phase 2-B, Anda shall have no obligation to implement the Clearinghouse’s determinations as to identification of Suspicious Orders and Suspicious Order reporting.
F. Liability Related to the Clearinghouse.
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1. Anda is entitled to rely upon information or data received from the Clearinghouse, whether in oral, written, or other form. Anda shall not have any liability (whether direct or indirect, in contract or tort or otherwise) to any party for or in connection with any action taken or not taken by the Clearinghouse. In addition, Anda shall not have any liability (whether direct or indirect, in contract or tort or otherwise) to any party for or in connection with any action taken or not taken by Anda based on incorrect, inaccurate, incomplete or otherwise erroneous information or data provided by the Clearinghouse, unless the information or data was incorrect, inaccurate, incomplete or otherwise erroneous because Anda itself provided incorrect, inaccurate, incomplete or otherwise erroneous data or information to the Clearinghouse.
2. Reports or analysis generated by the Clearinghouse may not be based on complete data due to a lack of participation by other distributors and pharmacies. As such, Anda shall not be held responsible for actions or inactions related to reports and analysis prepared by the Clearinghouse which may be based on incomplete data due to a lack of participation by other distributors and pharmacies.
3. Nothing in the Injunctive Relief Terms shall require Anda to indemnify or otherwise be responsible to pharmacy customers for any claims resulting from the provision of Dispensing Data to the Clearinghouse, including, but not limited to, claims related to any data breaches occurring with the data transmitted to or maintained by the Clearinghouse.
4. Anda and the Settling States shall not be liable for any breaches of any databases maintained by the Clearinghouse. This does not excuse the Clearinghouse or its vendor(s) from compliance with all state and federal laws and regulations governing (1) the protection of personal information and protected health information, or (2) notifications relating to Data Security Events.
5. The Clearinghouse’s performance of CSMP functions during Phase 2-B will not relieve Anda from its legal obligations unless (i) Anda and the State Compliance Review Committee jointly enter into a written agreement for the Clearinghouse to assume legal requirements during Phase 2-B; and (ii) all vendors and consultants working on the Clearinghouse agree in writing to assume such obligations.
G. Funding Obligations.
1. For a period of ten (10) years from the Effective Date, Anda will contribute to the cost of the operation of the Clearinghouse in an amount to be determined based on the financial and relative size of Anda compared to the three distributors initially participating in the Clearinghouse.
2. Anda shall engage with the three distributors initially participating in the Clearinghouse and the State Compliance Review Committee to determine Q-25
Anda’s required contribution. If Anda and the State Compliance Review Committee cannot reach an agreement on the amount of the contribution, the issue will be submitted to the National Arbitration Panel for resolution subject to the cap provided by Section XVII.G.4.
3. In the event that Anda elects not to participate in Phase 2-B, Anda shall have no obligation to fund future costs directly related to Phase 2-B of the Clearinghouse.
4. In no case shall Anda’s required contribution for Phase 1 and Phase 2-A during the first two (2) years of its participation in the Clearinghouse exceed $250,000 per year, nor shall it exceed $100,000 per year during its third through tenth years of participation.
5. Anda and the State Compliance Review Committee agree to engage in good faith discussions regarding potential continued operation and funding of the Clearinghouse following the initial ten (10) year period.
XVIII.MONITOR
A. Anda shall engage a Monitor to perform the reviews described in Section XVIII.G in a professionally independent and objective fashion. The Monitor shall employ or retain personnel who have appropriate qualifications related to the pharmaceutical industry and the laws governing the distribution of pharmaceuticals, the distribution of Controlled Substances, and the applicable requirements of federal and state law. The Monitor may also employ or retain personnel who have appropriate qualifications in the audit and review of sample documents in order to conduct the reviews described in Section XVIII.G. To the extent additional expertise is required for the engagement, the Monitor may retain the services of third-party consultants after consultation with and input from Anda and the State Compliance Review Committee.
B. The Monitor and any retained third-parties shall at all times act in good faith and with integrity and fairness towards all parties.
C. Monitor Selection and Engagement
1. The parties have agreed that the initial Monitor shall be Gil Soffer of Katten, Muchin Rosenman LLP.
2. The Monitor can be replaced upon agreement of the State Compliance Review Committee and Anda. If the parties so agree, the process for selecting a replacement Monitor shall be the process described in paragraphs i-iii below. The provisions of this Exhibit Qshall apply to any successor Monitor.
i. State Compliance Review Committee and Anda will each identify the names of up to three (3) individuals, groups of individuals or firms as the pool of recommended candidates to serve as the Monitor, within (60) calendar days of the date the parties agree to replace the Monitor.
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ii. The State Compliance Review Committee and Anda shall have the right to meet with and otherwise evaluate the candidates and conduct appropriate interviews of the personnel who are expected to work on the project. The following qualifications may be relevant considerations for the State Compliance Review Committee and Anda in evaluating candidates: (a) prior monitorship or oversight experience; (b) experience with applicable laws and regulations governing the distribution of Controlled Substances; (c) experience with the pharmaceutical; (d) access to sufficient resources to carry out the duties of the Monitor; and (e) experience with internal investigations or the investigative process. iii. If the State Compliance Review Committee and Anda do not agree on the appointment of any of the candidates from the initial pool of recommendations, State Compliance Review Committee and/or Anda may identify additional qualified candidates, as the timeline permits.
However, in the event the parties fail to reach agreement on a Monitor within ninety (90) calendar days of the date the parties agree to replace the monitor, the State Compliance Review Committee shall appoint a Monitor.
3. In the event that the State Compliance Review Committee and Anda do not agree to the dismissal of the Independent Monitor, either the State Compliance Review Committee (through one of the Settling States on the State Compliance Review Committee) or Anda may submit the question of the Monitor’s dismissal to the court to which the Consent Judgment was presented in any Settling States on the State Compliance Review Committee, and the Monitor shall only be dismissed if the court finds that there is Good Cause for dismissal. Good Cause for dismissal shall mean (a) a material and substantial breach of the terms of this Exhibit Q by the Monitor, including the failure to comply with the terms and limitations of this Exhibit Q; (b) any act of dishonesty, misappropriation, embezzlement, intentional fraud, or similar conduct by the Monitor; (c) any intentional act of bias or prejudice in favor or against either party by the Monitor; or (d) conduct by the Monitor that demonstrates unfitness to fulfill the functions of the Monitor reasonably and competently. Good Cause shall not include disagreements with the decisions of the Monitor pursuant to this Exhibit Q, unless there is a clear pattern in the Monitor’s decisions that demonstrates that the Independent Monitor has not been acting as an independent third party in rendering decisions.
4. Anda shall be responsible for the Monitor’s fees and costs directly related to its performance of the work specified by the Injunctive Relief Terms up to a limit of $300,000 per year. Should the Monitor require additional fees and costs to perform adequately the work specified in these Anda Injunctive Terms, the Monitor may request an increase in the budget to cover these unanticipated costs, and Anda will not unreasonably withhold approval of same. Further, to the extent there remains funds not yet expended under Teva’s monitor budget (Section VI.C. of Exhibit P of the Settlement Agreement), those may be used to cover these unanticipated costs at Teva’s discretion.
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D. Term and Reporting Periods
1. The term of the Monitor will be five (5) years from the date the Monitor is appointed, divided into one-year periods for purposes of the reviews and reporting described in Section XVIII (“Reporting Periods”). The Monitor may align Anda’s Reporting Periods with the reporting periods provided by the Big 3 Distributor Injunctive Relief Terms.
E. Monitor Access to Information
1. In connection with its reviews set forth in Section XVIII.G, the Monitor may request to interview employees with appropriate authority and responsibilities as necessary. In the event that Anda believes that the Monitor is requesting an unreasonable number of interviews or requesting interviews of employees who do not have relevant information to the reviews required by Section XVIII.G, Anda and State Compliance Review Committee shall meet and confer in good faith to resolve this issue.
2. The Chief Diversion Control Officer of Anda or a direct report of the Chief Diversion Control Officer shall serve as the primary point of contact for the Monitor to facilitate the Monitor’s access to documents, materials, or staff necessary to conduct the reviews specified in Section XVIII.G. The Monitor shall communicate any request for documents, materials, or access to staff to the Chief Diversion Control Officer or her designee.
3. If at any time the Monitor believes there is undue delay, resistance, interference, limitation, or denial of access to any records or to any employee or former employee deemed necessary by the Monitor to conduct the reviews specified in Section XVIII.G, the Monitor shall notify the Chief Diversion Control Officer of Anda and they shall meet and confer to resolve such issue.
If the Monitor believes that the matter was not resolved, the Monitor shall immediately report the issue to the State Compliance Review Committee.
4. To the extent any of the documents requested by the Monitor contain material protected from disclosure by any legal privilege, including the attorney-client privilege or attorney work product protections, Anda may redact such material before providing the documents to the Monitor, but must provide the Monitor with a privilege log describing the redacted information and identifying the basis for redaction.
5. Notwithstanding any other information referenced and produced pursuant to Section XVIII, the Monitor shall have access to, and Anda’s Chief Diversion Control Officer shall produce to the Monitor, any settlement agreements with government entities entered into after the Effective Date specifically concerning the requirements contained in the Injunctive Relief Terms and Anda’s distribution of Controlled Substances (as opposed to distribution of pharmaceutical products in general).
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F. Settling States’ Access to Monitor
1. Other than in connection with the initiation of a Notice of Potential Violation set forth in Section XIX.B.2, should the Monitor believe it needs to initiate communication with the State Compliance Review Committee regarding Anda’s compliance with the Injunctive Relief Terms, the Monitor’s communications should include the Chief Diversion Control Officer or counsel of Anda, regardless of the form of communication.
2. The State Compliance Review Committee shall have access to any settlement agreements produced to the Monitor pursuant to Section XVIII.E.5.
G. Reviews to be Conducted by the Monitor
1. There shall be two (2) types of reviews to be conducted by the Monitor:
a) Customer-specific reviews, as set forth in Section XVIII.G.2; and b) System reviews, as set forth in Section XVIII.G.3.
2. Customer-Specific Reviews
a) The following Customer-specific reviews will be conducted by the Monitor for each of the Reporting Periods:
(1) Threshold Change Request Review (“TCR Review”);
(2) Onboarding New Customer Review (“Onboarding Review”); (3) Ongoing Due Diligence Review (“Ongoing Diligence
Review”);
(4) Customer Termination Review (“Termination Review”); and (5) Orders that Exceed Thresholds but are Shipped Review (“Exceeded Threshold Review”).
b) Sample selection and audit periods for TCR Reviews, Onboarding Reviews, Ongoing Diligence Reviews, Termination Reviews, and Exceeded Threshold Reviews:
(1) For each Reporting Period, the Monitor will review a representative sample of files for the performance of the TCR Reviews, Onboarding Reviews, and Ongoing Diligence
Reviews. The Monitor shall select a sample representative of various geographic regions, customer types (Independent Retail Pharmacy Customers or Chain Customer), and
distribution centers.
(2) The Monitor will meet and confer with Anda to determine the appropriate audit period within each Reporting Period from which the samples will be selected (e.g. samples will be selected from the first six (6) months of a reporting period to Q-29
allow the Monitor time to perform its review during the remainder of the reporting period).
(3) Within thirty (30) calendar days following the close of the agreed-upon audit period, Anda (or the Clearinghouse once operational, if able to do so) will provide the Monitor with the following lists of relevant Customers for each type of review:
(a) A list of all Customers that requested at least one Threshold increase for a Highly Diverted Controlled
Substance during the relevant audit period, including
the number of such requests by each Customer;
(b) A list of all Customers that were onboarded during the relevant audit period and, during that period, ordered
and received Highly Diverted Controlled Substances;
(c) A list of all Customers that were the subject of an Ongoing Diligence Review during the relevant audit
period;
(d) A list of all Customers that, for reasons related to Controlled Substance regulatory compliance, were
terminated during the relevant audit period; and
(e) A list of all Orders for Highly Diverted Controlled Substances where a decision was made to ship the
Order even though the order exceeded the otherwise
applicable Threshold, with number of such shipped
orders.
(4) Within fifteen (15) calendar days of compiling this Customer information for sample selection, Anda shall propose a
reasonable number of customer files for each review to the Monitor.
(5) Within fifteen (15) calendar days of receiving the lists specified above from Anda, the Monitor shall choose
representative files to be reviewed from these lists. Each list will include the Customers’ zip code, geographic region, distribution center, and customer type (Independent Retail Pharmacy Customer or Chain Customer).
c) TCR Reviews
(1) For each Reporting Period, the Monitor shall conduct a TCR Review for a sample review of Customers who requested at least one Threshold increase for Highly Diverted Controlled Substances. For the TCR Reviews, the Monitor shall review the information contained in the files of the sample Customers Q-30
and determine whether the information reflects substantial compliance with the requirements of Section XII.C.3.
d) Onboarding Reviews
(1) For each Reporting Period, the Monitor shall conduct an Onboarding Review of a sample of Customers that were
onboarded during the applicable audit period and, during that period, ordered and received Highly Diverted Controlled Substances from Anda. For the Onboarding Reviews, the
Monitor shall review the information contained in the files of the sample Customers and determine whether the information reflects substantial compliance with the requirements of Section IX.
e) Ongoing Diligence Reviews
(1) For each Reporting Period, the Monitor shall conduct an Ongoing Diligence Review of a sample of Customers that were the subject of Anda’s Ongoing Diligence Review under
Section X during the relevant audit period. For the Ongoing Diligence Reviews, the Monitor shall review the information contained in the files of the sample of Customers and
determine whether the information reflects substantial
compliance with the requirements of Section X.
f) Termination Reviews
(1) For each Reporting Period, the Monitor shall conduct a review of a sample of Customers that were terminated by Anda during the audit period. For the Termination Reviews, the Monitor shall review the information contained in the files of the sample of Customers and determine whether the information reflects substantial compliance with the requirements of Section XIV.
g) Exceeded Threshold Review
(1) For each Reporting Period, the Monitor shall conduct a review of a sample of Orders for Highly Diverted Controlled
Substances where a decision was made by Anda to ship the Order even though the Order exceeded the applicable
Threshold. For the Exceeded Threshold Reviews, the Monitor shall review the information contained in the Customer files related to the Orders and determine whether the information reflects substantial compliance with the requirements of Section XIII.B.
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3. Annual System Reviews:
a) The following system reviews will be conducted by the Monitor for each of the Reporting Periods:
(1) CSMP Review;
(2) Threshold Setting Process Review;
(3) Suspicious Orders and Suspicious Order Report Review; (4) Compensation Review;
(5) Red Flag Review; and
(6) Review of CSMP Integration with Clearinghouse.
b) CSMP Review
(1) For each Reporting Period, the Monitor shall conduct a review of the following materials from Anda:
(a) Current CSMP policies and procedures;
(b) Organizational charts for the departments that are
relevant to the CSMP organization;
(c) Logs and/or summaries of any reports received on the “hot line” required by Section V.E and the action or
response of Anda to any such reports;
(d) Copies of the quarterly reports provided by the Chief Diversion Control Officer to the CSMP Committee as
required by Section IV.C;
(e) Copies of the quarterly reports provided by the CSMP Committee to senior management and the Board of
Directors as required by Section VI.C; and
(f) Copies of the materials used for the training required by Section VII and lists of the attendees of the training. c) Threshold Setting Process Review:
(1) For each Reporting Period, Anda or its outside consultants shall prepare a summary report describing how its Thresholdsetting methodology for Independent Retail Pharmacy Customers and Chain Customers complies with Section XII (the “Annual Threshold Analysis and Assessment Report”).
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(2) For each Reporting Period, the Monitor shall review the Annual Threshold Analysis and Assessment Report, determine whether the information reflects substantial compliance with the requirements of Section XII, and include any Observations and Recommendations, as defined in Section XVIII.H, in its annual Audit Report.
d) Suspicious Orders and Suspicious Order Reporting Review:
(1) For each Reporting Period, Anda will provide the Monitor with a report containing summary metrics for the Suspicious Orders that were reported to the DEA and the Settling States (the “Suspicious Order Metrics Report”). In the Suspicious Order Metrics Report, Anda will also provide summary metrics for Orders of Highly Diverted Controlled Substances that
exceeded a Threshold but were still shipped.
(2) For each Reporting Period, the Monitor shall review the Suspicious Order Metrics Report, determine whether the
information reflects substantial compliance with the
requirements of Section XIII, and include any Observations and Recommendations in its annual Audit Report.
e) Compensation Reviews:
(1) For each Reporting Period, the Monitor will review
compensation-related policy documents for sales personnel.
The Monitor shall analyze those documents and determine whether the compensation policies of Anda comply with the requirements contained in Section V.
f) Red Flags Review:
(1) For each Reporting Period, the Monitor shall review the Red Flags defined in Section VIII and their incorporation into Anda’s policies and procedures. The Monitor shall determine whether the information reflects substantial compliance with the requirements of Section VIII and include any Observations and Recommendations, as called for by Section VIII.C, about those definitions in its annual Audit Report.
(g) Review of CSMP Integration with the Clearinghouse:
(1) For each Reporting Period, Anda shall prepare a report summarizing the status of Anda’s CSMP integration with the operation of the Clearinghouse (“Clearinghouse Integration Report”). The Monitor shall review Anda’s Clearinghouse Integration Report, determine whether the information reflects substantial compliance with the requirements of Section XVII, Q-33
and include any Observations and Recommendations in its annual Audit Report.
H. Observations and Recommendations:
1. If the Monitor notes any areas for potential improvement during the course of the reviews conducted pursuant to the Injunctive Relief Terms, the Monitor shall include any such recommendations in the Audit Report.
Collectively, any such questions, concerns or recommendations will be referred to as “Observations and Recommendations.”
I. Audit Reports:
1. No later than one hundred and twenty (120) calendar days prior to the end of a Reporting Period and/or at any other time deemed reasonably necessary by the Monitor, the Monitor shall provide Anda with a draft report detailing any instances of substantial noncompliance with the applicable provisions of the Injunctive Relief Terms from the reviews in Section XVIII.G (the “Draft Report”). The Draft Report will also describe any Observations and Recommendations.
2. Within thirty (30) calendar days of its receipt of the Draft Report, Anda will provide comments and responses to the Draft Report. Anda will, among other things:
a) Respond to each instance of substantial non-compliance, including, where appropriate, describing any corrective action taken (or to be taken).
b) Respond to each Observation and Recommendation.
3. Within thirty (30) calendar days of its receipt of Anda’s responses to the Draft Report, the Monitor shall provide a final report (the “Audit Report”) to Anda and the State Compliance Review Committee. The Monitor shall provide the State Compliance Review Committee with a copy of Anda’s response to the Draft Report.
4. No action or lack of action by the Settling States regarding information received from the Monitor concerning Anda’s conduct shall be considered affirmation, acceptance, or ratification of that conduct by the Settling States.
J. Confidentiality:
1. Materials and information provided by Anda to the Monitor that are designated “Confidential” (and any parts, portions, or derivations thereof) (the “Confidential Information”) will be kept confidential and not be shown, disclosed, or distributed to any other party, including any other distributor.
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2. The Monitor will not use materials or information received from Anda, or information or analysis developed using the Confidential Information of Anda, in its assessment of any other distributor. Because Anda operates pursuant to its own unique policies and procedures intended to comply with legal and other requirements of the Injunctive Relief Terms, the Monitor shall apply the standards of Anda to its reviews without preference to the practices or standards applied by any other distributor.
3. If any of the Settling States or the Monitor receive a request for disclosure of any material or information created or shared under the Injunctive Relief Terms, pursuant to a Third Party Request, the Settling State or the Monitor, respectively, shall notify Anda of the Third Party Request and the Confidential Information to be disclosed so that Anda may seek a protective order or otherwise challenge or object to the disclosure. The Settling State or the Monitor will provide Anda with at least ten (10) days’ advance notice before complying with any Third Party Request for Confidential Information, except where state law requires a lesser period of advance notice.
4. Nothing herein will be deemed to prevent any party from claiming any applicable exemption to the public information act, freedom of information act, public records act, or similar law.
XIX. ENFORCEMENT OF INJUNCTIVE RELIEF TERMS
A. State Compliance Review Committee:
1. Any Settling State may initiate a review of a Potential Violation consistent with the process set forth in Section XIX.
2. The State Compliance Review Committee shall assign the Monitor the responsibilities set forth in Sections XIX.B.3 through XIX.B.7, regarding review of a Potential Violation and an opportunity to cure, except with respect to matters requiring interpretation of the Injunctive Relief Terms subject to Section XIX.C.2. The objective of the Monitor shall be to facilitate a resolution among the parties, providing an opportunity to cure, as applicable, for the party against whom a Potential Violation has been alleged.
3. No less than six (6) months before the Monitor’s term expires pursuant to Section XVIII, the State Compliance Review Committee and Anda shall meet and confer in good faith to determine the parameters and processes for continued enforcement, consistent to the maximum extent possible with the provisions set forth in Section XIX, for the period after the Monitor’s term has ended. Absent agreement between the State Compliance Review Committee and Anda, all provisions set forth in Section XIX involving the Monitor are excused after the Monitor’s term has ended.
4. Should Anda allege in good faith that a Settling State or the Monitor has impaired the ability of Anda to meet the Injunctive Relief Terms, Anda may Q-35
request the State Compliance Review Committee to mediate any dispute in an effort to avoid the time and expense of litigation regarding interpretation and enforcement of the Injunctive Relief Terms.
B. Process for Review of Potential Violations and Opportunity to Cure:
1. Definition of “Potential Violation”: A Potential Violation occurs when Anda is alleged to not be in substantial compliance with (i) the Injunctive Relief Terms or (ii) a Corrective Action Plan adopted consistent with the process set forth in Section XIX.B.7.
2. Submission of Notice of Potential Violation. An allegation of a Potential Violation shall be submitted to the State Compliance Review Committee in writing by one or more Settling States (“Notice of Potential Violation” or “Notice”) and shall include the following to the extent practicable:
a) Specification of the particular Injunctive Relief Term(s) and/or Corrective Action Plan(s) implicated by the Potential Violation; b) Description of the Potential Violation with specificity; c) The reasoning for and, if available, any documentation supporting the allegation that a Potential Violation has occurred, including whether the Potential Violation is a matter identified by the Monitor in an Audit Report; and
d) Description of the time-sensitivity of the Potential Violation, if relevant.
3. Assignment to Monitor. The State Compliance Review Committee shall review every Notice. If the State Compliance Review Committee reasonably believes that further review is warranted, the State Compliance Review Committee shall forward the Notice to the Monitor. The Monitor shall ensure that Anda receives a copy of the Notice and a proposed schedule consistent with the process set forth in Sections XIX.B.4 and XIX.B.
4. Response to Notice of Potential Violation. Within thirty (30) days of receipt of the Notice of Potential Violation, Anda shall provide a written response to the referring Settling State(s), the Monitor, and the State Compliance Review Committee (collectively with Anda, the “parties to the Notice”)”. The response (a) shall set forth the reasons Anda believes that it is in substantial compliance with the relevant Injunctive Relief Term(s) and/or Corrective Action Plan(s), and (b) as applicable, shall explain efforts undertaken to cure the Potential Violation and a schedule for completing the efforts to cure.
5. Conference for Parties re Notice of Potential Violation. The parties to the Notice shall meet or otherwise confer regarding the Potential Violation. The parties and the Monitor shall make themselves available for such a meeting (which may at any party’s election be a virtual or technology-based Q-36
meeting), provided, however, that the meeting is not required to take place sooner than fifteen (15) days after a written response to the Notice of Potential Violation.
6. Process for Previously-Submitted Notices of Potential Violation. At the request of the parties to a Notice, the Monitor shall determine whether the Notice implicates the same or similar issues as a previously submitted Notice involving Anda or is a matter previously identified by the Monitor in an Audit Report involving Anda, and make an initial determination as to whether the issues needs to be addressed anew. The Monitor shall inform the Settling State and Anda of its determination within five (5) business days of receipt of the Notice. The Settling State and Anda shall have five (5) business days to object to the determination. If an objection is made, the Monitor shall respond to the objection within five (5) business days. If no objection is made, the party involved in the prior Notice may rely on the response to the previously submitted Notice or matter previously identified by the Monitor in an Audit Report and no further action shall be required.
7. Monitor Resolution of Potential Violation and Opportunity to Cure. Within thirty (30) days of the meeting pursuant to Section XIX.B.5, the Monitor, taking into consideration the submissions of the parties involved in the Notice and other information available to the Monitor, shall resolve the Notice as follows:
a) If the Monitor reasonably believes that a Potential Violation is not ongoing or has been substantially resolved as of thirty (30) days from the meeting pursuant to Section XIX.B.5, the Monitor shall provide written notice to the State Compliance Review Committee and the Settling State(s) and Anda.
b) If the Monitor reasonably believes that a Potential Violation is ongoing and has not been substantially resolved as of thirty (30) days from the meeting pursuant to Section XIX.B.5, the Monitor shall provide written notice to the State Compliance Review Committee and the Settling State(s) and Anda and request that Anda prepare, within thirty (30) days of the receipt of such written notice, a Corrective Action Plan to remedy such Potential Violation, including a reasonable period for implementation of such plan. The Monitor may extend the period of time to submit a Corrective Action Plan up to ninety (90) days based on a reasonable request by the affected party.
c) A Corrective Action Plan may address multiple Potential Violations, and an existing Corrective Action Plan may be amended to address additional Potential Violations.
d) Within ten (10) business days of submission of a Corrective Action Plan regarding a Potential Violation, the Monitor shall confer with Q-37
the State Compliance Review Committee and the Settling State(s) and Anda regarding the proposed Corrective Action Plan. The Monitor may recommend revisions in its discretion. The conference required by this paragraph may at any party’s election be a virtual or technology-based meeting.
(e) Within thirty (30) days of the conference in Section XIX.B.7.d, the Monitor shall advise the State Compliance Review Committee and the Settling State(s) and Anda whether the Monitor has adopted the proposed Corrective Action Plan or whether the Monitor has adopted it after making modifications. The Monitor shall also set forth a reasonable period for implementation of any such plan that has been adopted. Anda must begin to comply with the Corrective Action Plan within five (5) business days of receiving notice of the Corrective Action Plan has been adopted, unless it seeks review by the State Compliance Review Committee pursuant to Section XIX.C.1.
C. Enforcement Responsibilities of State Compliance Review Committee:
1. The Settling State(s) or Anda may request the State Compliance Review Committee to review the resolution (including a resolution pursuant to Section XIX.B.7.a) and/or Corrective Action Plan adopted by the Monitor regarding that Notice. Any such request must be made within five (5) business days of a resolution or adoption of a Corrective Action Plan by the Monitor.
The State Compliance Review Committee, taking into consideration the resolution by the Monitor, submissions of the Settling State(s) or Anda, and other information available to the Committee, shall within thirty (30) days of receipt of the request resolve the matter by written notice to the affected parties, which shall include the State Compliance Review Committee’s reasoning in reaching its resolution. The State Compliance Review Committee may agree, disagree, or modify any resolution or Corrective Action Plan that it reviews. If the Corrective Action Plan is affirmed or affirmed as amended by the State Compliance Review Committee, Anda must within five (5) business days begin to comply with the Corrective Action Plan.
2. The State Compliance Review Committee shall review any issues raised by a Notice regarding the interpretation of the Injunctive Relief Terms at the request of the Settling State(s), Anda, or the Monitor. Such a request may be made at any time after the Notice’s submission, and the request will not extend the timelines set forth in Sections XIX.B and XIX.C.1. The State Compliance Review Committee shall notify the Monitor, Settling State(s) and Anda of its determination. Settling States and Anda do not waive their rights to challenge the interpretation of the Injunctive Relief Terms by the State Compliance Review Committee in any subsequent proceeding pursuant to Section XIX.E.2.
3. The State Compliance Review Committee may, independent of a Notice of Potential Violation, review requests by a Monitor, Settling State, or Anda regarding the interpretation of the Injunctive Relief Terms. The State Q-38
Compliance Review Committee shall notify the Monitor and requesting party of its interpretation, including the State Compliance Review Committee’s reasoning in reaching its conclusion. Settling States and Anda do not waive their rights to challenge the interpretation of the Injunctive Relief Terms by the State Compliance Review Committee in any subsequent proceeding pursuant to Section XIX.E.2.
4. The State Compliance Review Committee shall make available to all Settling States and Anda any interpretation it issues pursuant to Sections XIX.C.2 and XIX.C.3.
D. Composition of State Compliance Review Committee:
1. A Settling State on the State Compliance Review Committee that is in active litigation with Anda, or in another potential conflict of interest involving compliance with Controlled Substances laws and regulations, may not serve on the State Compliance Review Committee, and the remaining Settling States on the State Compliance Review Committee shall within five (5) business days select an alternate Settling State as a replacement.
2. If the affected state on the State Compliance Review Committee disputes that it has a disqualifying active litigation or other conflict of interest, the determination of whether that state has a conflict disqualifying it from serving on the State Compliance Review Committee shall be made by the remaining states on the State Compliance Review Committee.
E. Enforcement Actions:
1. Any written notice or resolution by the State Compliance Review Committee regarding the matters set forth in Sections XIX.B and XIX.C shall provide the State Compliance Review Committee’s assessment of the matter but will not be an official opinion of any individual Settling State.
2. Following the issuance of a written notice or resolution of the State Compliance Review Committee pursuant to Section XIX.C, a Settling State or Anda may take whatever action it deems necessary related to the written notice or resolution issued by the State Compliance Review Committee, provided that the Settling State or Anda is either (a) the Settling State that sought review by the State Compliance Review Committee, or (b) Anda.
Such action may include but is not limited to bringing an action to enforce the settlement agreement, filing a new original action, or, the parties to a Notice attempting to negotiate a Corrective Action Plan directly with each other.
3. The Settling States agree that prior to taking any court or administrative action, other than an action that is necessary to address an immediate threat to the health, safety, or welfare of the citizens of the Settling State, or that a public emergency requiring immediate action exists, it will follow the process outlined in Sections XIX.B and XIX.C.
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4. A Settling State or Anda must bring a court or administrative action within six (6) months of any resolution of the State Compliance Review Committee, unless the alleged violation is also an independent violation of state or federal law, or an action that a Settling State concludes is necessary to address an immediate threat to the health, safety, or welfare of the citizens of the State, or that a public emergency requiring immediate action exists, in which cases, the applicable statute of limitations (if any) for sovereign actions shall apply.
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Exhibit R
Agreement on Attorneys’ Fees, Expenses and Costs
This Agreement on Attorneys’ Fees, Expenses, and Costs (“Fee Agreement”) is entered between Teva, Allergan, and the Plaintiffs’ Executive Committee appointed in the multidistrict litigation in the Northern District of Ohio, In re National Prescription Opiate Litigation, No. 1:17- MD-2804 (“MDL PEC”), in connection with the Teva Global Opioid Settlement Agreement (“Teva Agreement”) and the Allergan Public Global Opioid Settlement Agreement (“Allergan Agreement”).
This Fee Agreement becomes effective on the Effective Date of the Teva Agreement and Allergan Agreement or the date that the Consent Judgments anticipated under the Teva Agreement and Allergan Agreement become final in 25 Settling States (whichever is later).
I. Definitions
A. This Fee Agreement incorporates all defined terms in the Teva Agreement and Allergan Agreement, unless otherwise defined herein, and shall be interpreted in a manner consistent with the Teva Agreement and Allergan Agreement.
B. “Allergan.” Allergan Finance, LLC (f/k/a Actavis, Inc., which, in turn, was f/k/a/ Watson Pharmaceuticals, Inc.) and Allergan Limited (f/k/a Allergan plc, which, in turn, was f/k/a Actavis plc). Allergan does not include Teva Pharmaceuticals Industries Ltd. (“Teva Ltd.”), Teva Pharmaceuticals USA, Inc. (“Teva USA”), Cephalon, Inc. (“Cephalon”), Actavis LLC (f/k/a Actavis Inc.) (“Actavis LLC”), Watson Laboratories, Inc. (“Watson”), Actavis Pharma, Inc. (f/k/a Watson Pharma, Inc.) (“Actavis Pharma”), Actavis Elizabeth LLC (“Actavis Elizabeth”), Actavis Kadian LLC (“Actavis Kadian”), Actavis Laboratories FL, Inc. (f/k/a Watson Laboratories, Inc. - Florida) (“Actavis Labs FL”), Actavis Laboratories UT, Inc. (f/k/a Watson Laboratories, Inc. - Utah) (“Actavis Labs UT”), Actavis Mid Atlantic LLC (“Actavis Mid”), Actavis South Atlantic LLC (“Actavis South”), Actavis Totowa LLC (“Actavis Totowa”), or Anda, Inc. (“Anda”).
C. “Applicant.” Any Attorney or MDL Participating Counsel who seeks an award of attorneys’ fees from the Attorney Fee Fund pursuant to the procedures established by the MDL Court and the Fee Panel.
D. “Attorney.” Any of the following retained through a legal contingency fee or hourly fee contract: a solo practitioner, multi-attorney law firm, or other legal representative of a Participating Subdivision or MDL Participating Counsel. This does not include Subdivision in-house attorneys.
E. “Attorney Fee Fund.” An account consisting of funds allocated to pay attorneys’ fees approved pursuant to Section III of this Fee Agreement established by Order of and under the ongoing jurisdiction of the MDL Court, as provided below.
F. “Common Benefit.” Work performed for the benefit of all Participating Subdivisions or Tribal Nations, including, but not limited to, pretrial matters, discovery, trial preparation, trial, settlement negotiations, and all other work that advances the interests of the Participating Subdivisions.
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G. “Common Benefit Fund.” The sub fund of the Attorney Fee Fund described in subsection III.E.
H. “Contingency Fee Fund.” The sub fund of the Attorney Fee Fund described in subsection III.F.
I. “Cost and Expense Fund Administrator.” The administrator appointed by the MDL Court on August 12, 2021 (MDL Docket No. 3828), to administer the Cost Fund and its sub funds as provided in the Fee Agreement.
J. “Court Common Benefit Fund.” The Common Benefit Fund established by the MDL Court in its orders of July 22, 2021, MDL Docket No. 3794, and May 9, 2022, MDL Docket No. 4428.
K. “Fee Entitlement.” Any right, entitlement, or expectation, including but not limited to a fee contract, contingent fee contract, agreement, referral arrangement, co-counsel arrangement, State Back-Stop agreement, or any other arrangement by which counsel could receive compensation or other consideration. For the avoidance of doubt, the scope of Fee Entitlement under subparagraph III.G.3.a does not include any Attorneys’ fees associated with representation of a State.
L. “Fee Panel.” The three-person panel appointed by the MDL Court on August 12, 2021 (MDL Docket No. 3828), to administer and make recommendations for the allocation and distribution of the Attorney Fee Fund and its sub funds as provided in the Fee Agreement.
M. “Later Litigating State” means a State that first files a lawsuit bringing a Released Claim against a Released Entity after the Preliminary Agreement Date.
N. “MDL Court.” United States District Court for the Northern District of Ohio Eastern Division, Case No. 1:17-md-2804, Judge Dan Aaron Polster.
O. “MDL Direct Cost Fund.” The cost fund described in subparagraph II.A.3.a below.
P. “MDL Participating Counsel.” MDL Participating Counsel includes an attorney or firm authorized by MDL 2804 Lead Counsel to perform work for the Common Benefit of Participating Subdivisions. By way of example, it would include insurance counsel and appellant counsel.
Q. “MDL PEC.” The Plaintiffs’ Executive Committee appointed by the MDL Court.
R. “Non-Participating Litigating Subdivision.” A Litigating Subdivision that is not a Participating Subdivision.
S. “Non-Participating State.” A State that is not a Participating State.
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T. “Participating Litigating Subdivision.” A Litigating Subdivision that is also a Participating Subdivision.
U. “Participation Agreement.” An agreement executed by an Attorney that acknowledges the obligation to pay an appropriate MDL Common Benefit Assessment.
V. “Qualified Tribal Representation.” Representation by an attorney of a Participating Tribal Government regarding Released Claims against Released Entities. Such counsel are eligible for Common Benefit Fee consideration. The Teva Tribal Global Settlement and the Allergan Tribal Global Settlement will provide for the contribution to the Common Benefit Fund as determined by the MDL Court.
W. “Qualifying Representation.” Legal services provided for representation of the MDL PEC or Participating Litigating Subdivision regarding Released Claims against Released Entities.
X. “State Back-Stop Agreement.” Any agreement by a Settling State and private counsel for Participating Subdivisions in that State (or legislation enacted in that State) to provide, adjust, or guarantee attorneys’ fees and costs, whether from the Attorney Fee Fund or any other source recognized in the agreement or legislation.1 Y. “Subdivision Cost and Expense Fund.” The fund created to pay approved Subdivision and Tribal Nations costs and expenses as set forth in subparagraph II.A.3.b.
Z. “Teva” means (i) Teva Pharmaceutical Industries Ltd. and (ii) all of its respective past and present direct or indirect parents, subsidiaries, divisions, affiliates, joint ventures, predecessors, successors, assigns, including but not limited to Teva Pharmaceuticals USA, Inc., the Actavis Generic Entities, and Anda Inc.
II. MDL Direct Cost Fund and Subdivision Cost and Expense Fund (“Cost Fund”) A. The total Cost Fund shall be $30 million dollars funded as set forth below.
1. Total cost to be paid by Teva in each of the relevant Payment Years2under this Agreement shall be up to the following amounts, subject to the provisions set forth below:
1 Nothing herein shall be understood to indicate approval for additional State Back-Stop Agreements or modifications of existing State Back-Stop Agreements.
2 Payment Year shall have the same meaning for Teva as set forth in the Teva Agreement and Teva Exhibits M-1 and M-3. Payment Year shall carry the same definition for Allergan as set forth in the Allergan Agreement and Allergan Exhibits M-1 and M-2.
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Cost Fund
Payment
Year 1 $9,000,000.00
Payment
Year 2 $9,000,000.00
2. Total cost to be paid by Allergan in each of the relevant Payment Years under this Agreement shall be up to the following amounts, subject to the provisions set forth below:
Cost Fund
Payment
Year 1 $6,000,000.00
Payment
Year 2 $6,000,000.00
3. The Cost Fund shall be split into the MDL Direct Cost Fund and the Subdivision Cost and Expense Fund.
a. The MDL Direct Cost Fund shall be Seven Million Five Hundred Thousand Dollars ($7,500,000), payable 50% in Year One, and 50% in Year Two. The MDL Direct Cost Fund shall make payment without any delay to reimburse the MDL PEC for an agreed-to portion of the expenses incurred, provided the costs have been approved by the Cost and Expense Fund Administrator appointed by the Court. The MDL Direct Cost Fund will be paid directly to the MDL Opiate Capital Account. The Cost and Expense Fund Administrator may include costs incurred by the MDL PEC in furtherance of litigation, mediation, implementation, and management of the Settlements.
b. The Subdivision Cost and Expense Fund shall be Twenty-Two Million Five Hundred Thousand Dollars ($22,500,000), payable 50% in Year One and 50% in Year Two.
c. It is the intention of the Parties that the Cost Fund shall be administered by the Cost Fund and Expense Fund Administrator (MDL Docket No. 3828), who will be governed by the provisions of this Agreement and shall design the process and procedures for the allocation of costs pursuant to this Agreement and the MDL Court’s Order.
d. The costs of the Cost and Expense Fund Administrator shall be paid from the Cost Fund and allocated by the Cost and Expense Fund Administrator between the MDL Direct Cost Fund and the Subdivision Cost and Expense Fund to fairly charge each fund the cost incurred in implementing and supervising the specific fund.
e. The Cost and Expense Fund Administrator shall set the process and procedures for submission of and criteria for applications for payment of R-5
Subdivisions’ and Tribal Nations’ costs and expenses. The Cost and Expense Fund Administrator shall receive and evaluate applications from Participating Litigating Subdivisions and litigating Tribal Nations, whether filed in Federal Court or State Court, to seek reimbursement for eligible costs in pursuit of claims against Allergan or Teva. The process shall require a showing that the costs or expenses sought were reasonably incurred in furtherance of active litigation of a designated state or federal bellwether trial-set case, or Common Benefit. The Cost and Expense Fund Administrator shall require transparency from all applicants as to any other sources for compensating Attorneys for Subdivisions and Tribal Nations for costs incurred. If funds remain after the reimbursement of approved out-of-pocket costs, the Cost and Expense Fund Administrator may consider reasonable and appropriate payment for client time, costs, or expenses incurred by recognized trial bellwether plaintiffs. At the conclusion of the process, any funds not allocated by the Cost and Expense Fund Administrator shall be transferred to the Common Benefit Fund established in this Exhibit R.
4. In the event that States and Subdivisions enter into an additional global settlement with a party or parties other than Teva or Allergan that is (a) under the jurisdiction of the MDL Court in MDL No. 2804, (b) creates a separate cost fund, and (c) unless the parties agree to another date, such agreement has an effective date prior to June 30, 2023, the Cost and Expense Fund Administrator shall have the authority to aggregate the Cost Fund with the cost fund created under that global settlement agreement. The Cost and Expense Fund Administrator shall have the authority to address the appropriate procedures and required information to allow the costs to be funded from the appropriate cost fund or shared by two or more cost funds.
III. Attorney Fee Fund
A. An Attorney Fee Fund shall be paid in the following amounts and years:
Teva Shall Pay Allergan Shall Pay
Payment
Year 1 $ 46,215,837.93 $ 40,778,855.53
Payment
Year 2 $ 46,215,837.93 $ 40,778,855.53
Payment
Year 3 $ 55,215,837.92 $ 46,778,855.53
Payment
Year 4 $ 55,215,837.92 $ 46,778,855.53
Payment
Year 5 $ 55,215,837.92 $ 0.00
Payment
Year 6 $ 55,215,837.92 $ 0.00
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B. The Attorney Fee Fund shall consist of the Contingency Fee Fund and the Common Benefit Fund.
1. It is the intention of the Parties that the Contingency Fee Fund and the Common Benefit Fund shall be administered by the Fee Panel (MDL Docket No. 3828), which will be governed by the provisions of this Fee Agreement and shall design the process and procedures for the allocation of fees pursuant to this Fee Agreement and the MDL Court’s Order.
C. The fees to be paid under this Fee Agreement are available for Attorneys engaged in Qualifying Representations and Qualified Tribal Representations only. Fees to be paid under this Fee Agreement are not available prior to the Effective Date of the Teva Agreement and Allergan Agreement or if the Teva Agreement does not proceed past Teva’s determination in subsection XI.A of the Teva Agreement or if the Allergan Agreement does not proceed past Allergan’s determination in subsection X.A of the Allergan Agreement. Fees to be paid under this Fee Agreement are not available for representation of States, Non-Participating Subdivisions or NonLitigating Subdivisions and are not available for representation of private hospitals, third-party payors, NAS claimants, personal injury/wrongful death claimants, or any entity other than Participating Litigating Subdivisions. In addition, fees under this Fee Agreement are not available for representation of any individual or entity in matters other than those claims against Released Entities, but may include a reasonable share of representations that involve development of facts for pursuit of opioid-related claims against multiple defendants in the pharmacy, manufacturing, and distribution chain.
D. Attorney Fee Fund and Sub Funds.
1. There shall be a split of the Attorney Fee Fund into the Contingency Fee Fund and the Common Benefit Fund. The split shall be 40% to the Contingency Fee Fund and 60% to the Common Benefit Fund.
2. In no event shall Teva or Allergan be required to pay more into the Attorney Fee Fund in any Payment Year than the maximum amount specified for that Payment Year in subsection III.A., which amounts are reflected in Exhibit M to the Teva Agreement and Allergan Agreement. The amounts allocated to the Contingency Fee Fund and the Common Benefit Fund set by the Fee Panel shall be subject to the reductions and offsets set forth below.
3. Awards of fees from the Contingency Fee Fund shall be available to Attorneys with Qualifying Representations of Participating Litigating Subdivisions eligible to receive an allocation under the Teva Agreement and Allergan Agreement, as set forth in Exhibits F-2 and G to the Teva Agreement and Exhibits F and G to the Allergan Agreement, and shall be made applying the Mathematical Model attached as Exhibit “A” to this Fee Agreement. The collection of the data and calculations for the Mathematical Model has been a cooperative effort among private counsel for a large number of Litigating Subdivisions. The analysis has been spearheaded by Joseph Tann and Andrew Arnold. The Fee Panel is R-7
encouraged to continue working with those counsel in application of the Model.
The Fee Panel shall oversee the application of the Model and resolve any questions or disputes concerning the eligibility of a Counsel to participate as required in subsection III.G. The Panel is empowered to hear disputes concerning and ensure the accuracy of the mathematical calculation.
4. As to awards from the Contingency Fee Fund, there shall be no right of appeal.
5. Any appeal of an award of the Fee Panel from the Common Benefit Fund will be made to the MDL Court and be reviewed under an abuse of discretion standard.
E. Common Benefit Fund (60% of the Attorney Fee Fund).
1. Funds in the Attorney Fee Fund shall be allocated to the Common Benefit Fund according to the schedule set forth below, subject to the adjustments described in paragraph III.E.6. The payments are to be made on the following yearly schedule, subject to the adjustments set forth below:
Teva Shall Pay Allergan Shall Pay
Payment
Year 1 $ 27,729,502.76 $ 24,467,313.32
Payment
Year 2 $ 27,729,502.76 $ 24,467,313.32
Payment
Year 3 $ 33,129,502.75 $ 28,067,313.32
Payment
Year 4 $ 33,129,502.75 $ 28,067,313.32
Payment
Year 5 $ 33,129,502.75 $ 0.00
Payment
Year 6 $ 33,129,502.75 $ 0.00
2. The Common Benefit Fund shall be available to compensate Attorneys engaged in Qualifying Representations of Participating Litigating Subdivisions and Qualified Tribal Representation of Tribal Participating Governments who:
a. have performed work for the Common Benefit of all Participating Subdivisions and/or Tribal Nations consistent with the provisions to the guidelines established by Judge Polster set forth in MDL 2804 and the May 1, 2018 Order, under docket number 358, which is incorporated herein by reference; and
b. satisfy the eligibility criteria set forth in subsection III.G.
3. For purposes of Common Benefit Fund distribution, Attorneys representing Tribal Nations litigating against Teva or Allergan have also reached a settlement for Released Claims with Teva and Allergan. These settlements shall be the subject of separate agreements with Teva and Allergan. Attorneys representing R-8
Tribal Nations are eligible for Common Benefit consideration, provided such agreements with Teva and Allergan became effective under their terms. Such Attorneys must meet the eligibility criteria in subsection III.G.
4. For purposes of Common Benefit Fund distribution, MDL Participating Counsel not engaged in Qualifying Representations of Participating Litigating Subdivisions but who performed work for the Common Benefit pursuant to authorization from the MDL Co-Leads and meet the eligibility criteria in subsection III.G shall be eligible.
5. The Common Benefit Fund shall be overseen by the Fee Panel, which shall determine the allocation of funds to eligible Attorneys consistent with this Fee Agreement and the May 1, 2018 Order.
6. In assessing the benefits that an Applicant has conferred to Participating Subdivisions (including non-Litigating Subdivisions) and/or Tribes for purposes of any compensation decision, the Fee Panel shall give significant weight to the extent to which (i) the Applicant and his or her clients have contributed to increasing (or reducing) the Initial Participation in the Teva Agreement or the Allergan Agreement, and (ii) the Applicant and his or her clients have contributed to increasing (or reducing) the amounts achieved under Incentive Payments A-D through participation in the Teva Agreement, including the Teva Tribal Agreement, or the Allergan Agreement, including the Allergan Tribal Agreement. The Fee Panel shall also consider additional fee recoveries the Applicant may potentially obtain, including, but not limited to, from attorney fee funds under other settlement agreements, State Back-Stop Agreements, representations of States or Tribal Nations, representations of other clients in opioids-related matters, or through the representation of Subdivision clients, whether they participated in the Teva Agreement or Allergan Agreement or not.
It is the intent of this provision to recognize that the goal of the Teva Agreement and Allergan Agreement is to provide for maximum participation by the Subdivisions, maximum abatement funding for all Subdivisions nationally, and the maximum peace for Released Entities. Therefore, representing one or more Non-Participating States or Non-Participating Subdivisions does not further the goal of the Teva Agreement or Allergan Agreement, and should not be considered Common Benefit because it does not increase funds available to Participating Subdivisions’ abatement programs. Representing one or more Later Litigating States or Later Litigating Subdivisions is antithetical to the Teva Settlement and the Allergan Agreement and detracts from Common Benefit. The Fee Panel shall consider this concept of “common detriment” set forth in this paragraph in all of its decision making with respect to the allocation of the Attorney Fee Fund among Applicants, as well as, in its discretion, any offsets provided to Teva or Allergan as set forth in subsection III.H. The Fee Panel shall consider the totality of the Applicant’s Participating Litigating Subdivisions as compared to the Applicant’s Non-Participating Litigating Subdivisions; the Parties recognize that, although the goal is for 100% participation, Applicants with a greater number of clients have a greater probability of having one or more Non-Participating Litigating Subdivisions. As used in this paragraph, “client” or R-9
“representing” a Subdivision shall include any Litigating Subdivision as to which the Applicant has a Fee Entitlement.
7. As set forth in subsection III.H, the Fee Panel must consider the factors described in paragraph III.E.6 to determine how and whether to reduce the amounts to be paid by Teva or Allergan under this Fee Agreement and to determine how to allocate funds among Applicants. They may also, at their discretion, consider other factors. Any reduction in payment obligation or credit to be given Teva or Allergan in this Fee Agreement shall be applied against the last Payment Year for that defendant and working backwards. Any reduction to an Applicant not credited to Teva or Allergan shall be allocated to attorneys whose Litigating Subdivision clients participated in the settlement by the Initial Participation Date.
8. The MDL PEC will seek, and the Attorneys General for Settling States, Teva, and Allergan, will not oppose, a Common Benefit Fee Order requiring an assessment of 7.5% on the gross recovery (by judgment or settlement) of any Non-Participating Subdivision that is subject to the federal court jurisdiction, represented by a MDL PEC firm, represented by any Attorney receiving fees from the Common Benefit Fund, represented by any Attorney that signed a Participation Agreement or paid in a case otherwise under the jurisdiction of the MDL Court.
9. If Teva and Allergan agree to go forward with their respective Agreements under subsections XI.A and X.A of their Agreements, they shall pay the full Common Benefit (60%) Fee into the Common Benefit Fund without regard to the number of Settling States or Participating Subdivisions. Should Teva and/or Allergan pay a judgment to, or settle with, a Non-Participating State or a Non-Participating Litigating Subdivision subsequent to the Reference Date, and such settlement or judgment results in a common benefit fee assessment paid into the Common Benefit Fund or the Court Common Benefit Fund, the following shall apply:
a. Teva or Allergan shall be credited dollar-for-dollar for the amount paid for the fee assessment up to 7.5% of the abatement amount derived from the application of the State Global Allocation Percentage as set forth in Exhibit F-1 or the abatement amount derived from the application of the Subdivision and Special District Allocation Percentage as set forth in Exhibit G that the Non-Participating State or Non-Participating Litigating Subdivision would have received if it had participated in the Settlement Agreement; b. Except as set forth below in subparagraph III.E.9.c, for any settlement or judgment that meets the requirements of paragraph III.E.9 that exceeds the abatement amount derived from the application of the State Global Allocation Percentage as set forth in Exhibit F-1 or the abatement amount derived from the application of the Subdivision and Special District Allocation Percentage as set forth in Exhibit G, no credits shall be taken against Teva or Allergan’s obligation to make payments into the Common Benefit Fund for that portion of the settlement or judgment in excess of the abatement amount derived from the application of the State Global Allocation Percentage as set forth in Exhibit R-10
F-1 or the abatement amount derived from the application of the Subdivision and Special District Allocation Percentage as set forth in Exhibit G; c. For any settlement or judgment that meets the requirements of paragraph III.E.9 that exceeds the abatement amount derived from the application of the State Global Allocation Percentage as set forth in Exhibit F-1 or the abatement amount derived from the application of the Subdivision and Special District Allocation Percentage as set forth in Exhibit G that the Later Litigating State or Later Litigating Subdivision would have received if it had participated in the Settlement Agreement, where the Later Litigating State or Later Litigating Subdivision is represented by any member of the MDL PEC or that member’s law firm, Teva or Allergan shall be credited dollar-for-dollar for the full amount of the 7.5% common benefit fee assessment paid into the Common Benefit Fund or the Court Common Benefit Fund;
d. If a credit is made to Allergan or Teva pursuant to subparagraph III.E.9.c., then that amount shall be calculated as a direct reduction to any common benefit fee award made under this Fee Agreement to the MDL PEC firm(s) that represented the Later Litigating State or Later Litigating Subdivision; e. Any credits shall be taken first against Teva’s or Allergan’s payment to the Common Benefit Fund in Teva’s or Allergan’s respective final Payment Year as set forth in paragraph III.E.1 (for Teva Year 6; for Allergan Year 4), up to the full amount of Teva’s or Allergan’s final year payment obligation, then from the next-to-final Payment Year’s payment obligation, and so on; f. Teva and Allergan shall not be entitled to any credits against the Common Benefit Fund for settlements or judgments paid after Teva’s or Allergan’s final fee Payment Year.
F. Contingency Fee Fund (40% of the Attorney Fee Fund).
1. Funds from the Attorney Fee Fund shall be allocated to the Contingency Fee Fund on the following yearly schedule, subject to the adjustments set forth below:
Teva Shall Pay Allergan Shall Pay
Payment
Year 1 $ 18,486,335.17 $ 16,311,542.21
Payment
Year 2 $ 18,486,335.17 $ 16,311,542.21
Payment
Year 3 $ 22,086,335.17 $ 18,711,542.21
Payment
Year 4 $ 22,086,335.17 $ 18,711,542.21
Payment
Year 5 $ 22,086,335.17 $ 0.00
Payment
Year 6 $ 22,086,335.17 $ 0.00
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2. The Contingency Fee Fund shall be available to compensate Attorneys engaged in Qualifying Representations of Participating Litigating Subdivisions that meet the criteria set forth in subsection III.G.
a. The Contingency Fee Fund shall be available to Attorneys who represent Litigating Subdivisions that are Participating Subdivisions, whether their actions are filed in state or federal court, and meet the eligibility criteria of subsection III.G.
b. Participation in the Contingency Fee Fund by counsel that have a case that is not subject to the jurisdiction of the MDL Court shall not create, provide, or waive jurisdiction of the MDL Court over that Litigating Subdivision, that case or Attorneys, other than to oversee the fairness of the distribution process, and enforcement of this Fee Agreement.
c. Under the terms of the Teva Agreement and Allergan Agreement Litigating Subdivisions must become a Participating Litigating Subdivision under both Agreements to be eligible to participate. Therefore, Exhibit R applies jointly to Teva and Allergan with the Attorneys’ Fee Fund and MDL Cost Fund to include the combined payment from Teva and Allergan.
3. Teva and/or Allergan shall each be entitled to a pro-rata reduction to their own portion of the Contingency Fee Fund payment(s) in accordance with subsection III.F.4., unless, by the Payment Date for the Initial Year Payment, (i) 41 states are Settling States for Teva or 43 states are Settling States for Allergan, (ii) 98% of all Litigating Subdivisions are Participating Subdivisions and/or Subdivisions Subject to a Bar, Case-Specific Resolution, and, (iii) 97% of all Non-Litigating Subdivisions with Populations over 10,000 as listed in Exhibit I are Participating Subdivisions and/or Subdivisions Subject to a Bar, Case-Specific Resolution, in which case no offset shall be applied.
4. If the participation conditions in paragraph III.F.3 are not met, then the amounts owed by Teva and/or Allergan to the Contingency Fee Fund shall be reduced as follows:
a. For Non-Settling States, the Contingency Fee Fund payments shall first be reduced by the amounts identified by the Fee Panel, pursuant to paragraph III.H.7, that would have been owed to counsel for Litigating Subdivisions in Non-Settling States, had those States and those Litigating Subdivisions been Settling States and Participating Subdivisions.
b. Following the calculation in subparagraph III.F.4.a., the Contingency Fee Fund payments shall be reduced to reflect the non-joinder of Litigating Subdivisions in Settling States by subtracting the amounts identified by the Fee Panel, pursuant to paragraph III.H.7, that would have been owed to counsel for Non-Participating Litigating Subdivisions in Settling States had such Litigating Subdivisions been Participating Subdivisions.
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5. In the event that after the date of the Settlement Agreement Teva, prior to the Effective Date of the Teva Agreement, or Allergan, prior to the Effective Date of the Allergan Agreement, settles with any Litigating Subdivision that would have been eligible to participate in the defendant’s Agreement, and, under such settlement agreement pays attorneys’ fees, the Fee Panel shall treat those Litigating Subdivisions as Participating Litigating Subdivisions and, applying the same criteria applicable to all Attorneys for Participating Litigating Subdivisions, determine what amount they would have been paid from the Contingency Fee Fund if they had become Participating Subdivisions under the Teva Agreement or the Allergan Agreement without such prior settlement. That sum, rather than being paid to the Attorney for the previously settling Litigating Subdivision, shall be credited and/or returned to Teva or Allergan as if determined under (a)(ii) above, except that such credit shall not be greater than the amount paid to the Attorneys under the Litigating Subdivision’s prior settlement agreement and credits apply equally over the Fee Payment Years.
6. During the period between the Preliminary Agreement Date and the Effective Date, the MDL PEC, as well as Litigating Subdivisions’ Attorneys, shall make best efforts to cease litigation activity against Teva and Allergan, including by jointly seeking stays or severance of claims against Teva and Allergan, where feasible, or postponements if a motion to stay or sever is not feasible or is denied, so long as such actions are not otherwise detrimental to the Litigating Subdivision.
G. Eligibility.
1. It is the intention of all parties participating in the Fee Panel process that there should be total transparency to the Fee Panel and to all fund participants. In connection with the process to be developed by the Fee Panel, any and all monies in attorney’s fees received or awarded, including prior or future Contingency Fees, Common Benefit Fees, referral fees, expenses paid, promises for payment, or any other Fee Entitlement, to any Applicant in any opioid litigation shall be disclosed to the Fee Panel as a condition of participating in the Attorney Fee Fund and prior to an award from the Fee Panel. Any payment, expectation of payment or perceived entitlement to participate in a State Back-Stop Agreement or any other agreement reached with a Settling State or any Subdivision or any other source regarding payment of fees must be disclosed to the Fee Panel. Similarly, any right to payment from any other fund, for example a fund for payment to lawyers representing Settling States or Tribal Nations or Subdivisions shall be disclosed to the Fee Panel. Because it is anticipated that there will be multiple firms listed on contingent fee agreements with Litigating Subdivisions, the Fee Panel shall establish procedures, with input from Attorneys for Participating Litigating Subdivisions, for who should petition for fees from such groups and to whom the fee shall be paid and thereafter distributed to co-counsel in accordance with applicable agreements. For the avoidance of doubt, all Attorneys that are part of such groups must meet the eligibility criteria in paragraph III.G.3, must be subject to the criteria set forth in subsection III.C, and must be disclosed to the Fee Panel.
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2. An Applicant may apply for and recover attorneys’ fees from the Common Benefit Fund, the Contingency Fee Fund, and any fund created by a past or future State Back-Stop Agreement, provided the Applicant satisfies the requirements relevant to each such fund and requirements for disclosure to the Fee Panel.
3. An Attorney may not receive any payment from the Attorney Fee Fund (which includes both the Contingency Fee Fund and the Common Benefit Fund) unless the following eligibility criteria are met and annually certified by the Attorney:
a. The Attorney must expressly waive the enforcement against the Litigating Subdivision client of all Fee Entitlements (other than under State BackStop Agreements) arising out of or related to any or all Qualifying Representations of any Participating Litigating Subdivision prior to applying for attorneys’ fees from the Attorney Fee Fund. All applications for attorneys’ fees under this Fee Agreement shall include an affirmation by the Attorney of such waiver and notice to the client(s) of such waiver.
Such waiver shall not preclude the Attorney from submitting such Fee Entitlements to the Fee Panel as a factor for consideration in allocating payments from the Attorney Fee Fund or in connection with a State BackStop Agreement. For the avoidance of doubt, no Attorney may recover fees under this Fee Agreement unless the Attorney expressly agrees not to enforce Fee Entitlements as to each and every Participating Litigating Subdivision represented by that Attorney, but such Attorneys may participate in and receive funds from a State Back-Stop Agreement. b. The Attorney must represent that s/he has no present intent to represent or participate in the representation of any Later Litigating Subdivision or Later Litigating State with respect to Released Claims against Released Entities.
c. The Attorney must represent that s/he has not and will not engage in any advertising or solicitation related to Released Claims against Released Entities where such advertising or solicitation relates to a representation of a Subdivision eligible to be a Participating Subdivision after the Reference Date unless the Attorney is recommending participation in the Agreement.
d. The Attorney must represent s/he will not charge or accept any referral fees for any Released Claims brought against Released Entities by Later Litigating Subdivisions or Later Litigating States. This representation shall not prohibit Attorneys from receiving allocated shares of any future common benefit assessments arising out of settlements or judgments with Later Litigating Subdivisions or Later Litigating States that are the result of the MDL Court’s Common Benefit order.
e. The Attorney may not have and must represent that s/he does not have a Fee Entitlement related to a Later Litigating Subdivision or Later Litigating State, other than a potential Common Benefit Fee.
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f. The Attorney must fully disclose the participation, or the anticipation of participation, in any agreement with a Settling State or Participating Subdivision concerning fees arising out of or related to the Teva Agreement or Allergan Agreement, including any fees paid or anticipated to be paid or any State Back-Stop Agreement.
g. The Attorney must identify for the Fee Panel whether s/he utilized state litigation work product or MDL work product, including but not limited to ARCOS data, document repositories, experts developed in the MDL, trial transcripts, or deposition transcripts. The Attorney must identify whether s/he signed the MDL Participation Agreement.
h. Any Attorney who applies for fees from one or both Funds must represent that, having exercised his/her independent judgment, s/he believes the Teva Agreement and the Allergan Agreement to be fair and will make or has made best efforts to recommend both Agreements to his or her Subdivision clients in Settling States. For avoidance of doubt, each Attorney is expected to exercise his or her independent judgment in the best interest of each client individually before determining whether to recommend joining the settlement. All applications for attorneys’ fees or costs under this subsection shall include an affirmation by the Attorney in compliance with the foregoing subparagraphs.
4. No Attorney receiving fees under this Fee Agreement may apply for or recover from the Attorney Fee Fund fees arising from representing a Non-Participating Subdivision except Common Benefit Fees as described in paragraph III.E.2. All applications for attorneys’ fees under this subsection shall include an affirmation by the Attorney of compliance with this paragraph.
5. An Attorney who has filed an application under this subsection and received an award of attorneys’ fees shall provide a certification of compliance with the requirements of this Fee Agreement annually during the years upon which they are still entitled to receive attorneys’ fee payments under this Agreement. This certification will be done as directed by the Panel.
6. If, at any time, the Attorney is unable to make the representations set forth in this subsection, such representations become untrue, or the Attorney falsely represents compliance with the eligibility criteria, the Attorney shall cease to be eligible to receive funds from the Attorney Fee Fund until further review by the Fee Panel of the Attorney’s eligibility under and compliance with this subsection.
7. If an Attorney has a Fee Entitlement with a Later Litigating Subdivision or Later Litigating State or otherwise becomes unable to reaffirm compliance with the eligibility criteria set forth above, the Attorney shall notify the Fee Panel. For the avoidance of doubt, any Attorney who undertakes any new representation of, or has a Fee Entitlement with, a Later Litigating Subdivision or Later Litigating State shall be prohibited from receiving any future funds from the Attorney Fee Fund.
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If an Attorney fails to notify the Fee Panel of such Fee Entitlement with a Later Litigating Subdivision or Later Litigating State, the Attorney shall be required to refund amounts previously paid. The Fee Panel shall notify Teva and Allergan when it receives notification.
8. To the extent an Attorney who has received compensation from the Attorney Fee Fund based on Qualifying Representations of Participating Litigating Subdivisions under the Teva Agreement or the Allergan Agreement, represents a Later Litigating Subdivision or Later Litigating State, such Attorney shall be obligated to refund such amounts received as compensation from the Attorney Fee Fund to Teva or Allergan. Teva, Allergan, or such Attorney may bring any dispute as to whether such Attorney shall be obligated to refund such amounts received from the Attorney Fee Fund to Allergan or Teva to the Fee Panel. Nothing herein shall require a multi-attorney law firm that has received compensation from the Attorney Fee Fund to refund such amounts if an attorney of the firm that is no longer affiliated with such law firm, after such departure, represents a Later Litigating Subdivision or Later Litigating State, provided that (a) neither the law firm nor any of its other attorneys have any contractual or financial arrangement regarding, stand to benefit directly or indirectly from, or directly or indirectly provide financial or other support of any kind to, the former attorney’s representation of the Later Litigating Subdivision or Later Litigating State and (b) if the former attorney was a partner or owner of the multi-attorney law firm at the time that the law firm received compensation from the Attorney Fee Fund, the former attorney shall be obligated to refund such amounts as the former attorney earned as a result of the compensation that the law firm received from the Attorney Fee Fund.
9. In the event that an Attorney is deemed ineligible by the Fee Panel (whether based on its initial application or subsequent recertification), the Fee Panel shall provide notice to the Attorney and give the Attorney 30 days to provide additional information such that the Fee Panel could re-consider the Attorney’s eligibility.
10. To the extent that an Attorney has a Fee Entitlement with a Participating Subdivision and is authorized to bring Released Claims against Released Entities, but such authorization is, in scope, less broad than the category of Released Claims set forth in the Teva Agreement or Allergan Agreement, such Attorney may participate fully in both the Contingency Fee Fund and the Common Benefit Fund, without any reduction imposed by the Fee Panel due to the scope of the authorization, so long as the Participating Subdivision fully releases all Released Claims against Released Entities.
11. Attorneys applying to the Attorney Fee Fund knowingly and expressly agree to be bound by the decisions of the Fee Panel, subject to the limited appeal rights set forth in this Fee Agreement, and waive the ability to assert the lack of enforceability of the allocation reached through the procedures outlined herein.
12. Applicants are under an ongoing obligation to inform the Fee Panel in writing of any additional fees earned, expected, or received related to any Opioid litigation throughout the period of the Fee Panel’s operation.
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H. Calculation of Amounts Due.
1. The Fee Panel shall be solely responsible for determining the amount of fees to be paid to each Applicant. None of the Released Entities shall have any responsibility, obligation, or liability of any kind whatsoever with respect to how attorneys’ fees are calculated under this subsection, except that the Fee Panel may receive information from Teva or Allergan as to (a) the identity of Participating, Non-Participating, Litigating, Later Litigating, and Non-Litigating Subdivisions; (b) the impact of non-participation by a Litigating Subdivision as is relevant to the Fee Panel’s determination in paragraph III.E.6; and (c) such other information as Teva or Allergan may voluntarily elect to provide.
2. The Fee Panel shall establish procedures for making determinations under this Fee Agreement consistent with this Fee Agreement and orders of the MDL Court.
Such procedures may include submission of documentary and/or other evidence, interviews with Applicants and/or other counsel (including counsel for Teva and Allergan) that the Fee Panel deems appropriate, and/or other means of creating a record upon which fee awards will be based.
3. In making determinations under this Fee Agreement, the Fee Panel must apply the eligibility criteria set forth in subsection III.G of this Fee Agreement and the criteria set forth in paragraph III.E.2. In addition, the Fee Panel will give consideration in regard to Common Benefit Fund awards to the Johnson factors, as well as the following factors (which factors may be applied and given relative weight in the Fee Panel’s discretion):
a. The Applicant’s contemporaneously recorded time and labor dedicated to Qualifying Representations along with the Applicant’s financial commitment to such Qualifying Representations. Claimed “time” will not be automatically accepted by the Fee Panel but will be critically reviewed and given substantially more weight and consideration if such time was subject to the audit process described in any Pretrial Order(s) governing the collection of common benefit time;
b. The novelty, time, and complexity of the Qualifying Representations; c. The skill requisite to perform legal services properly and undesirability of the case;
d. The preclusion of other employment by the Applicant due to time dedicated to Qualifying Representations;
e. The Common Benefit, if any, alleged to have been conferred by the Applicant and whether such Common Benefit work product by that Applicant was used by others in parallel litigations against Released Entities whether within or outside the MDL, provided that any Applicant claiming that s/he substantially benefited cases other than those in which s/he entered an appearance as R-17
counsel must substantiate such claims by proffering factual support, such as proper supporting affidavits or other documents as determined by the Fee Panel with input from Attorneys for Participating Litigating Subdivisions; f. Any “common detriment,” as set forth in paragraph III.E.6. g. Any contingent fee agreement or other Fee Entitlement with Participating Subdivisions, enforcement of which, except for State Back-Stop Agreements, are waived in conjunction with the application, the nature and extent of any work for those Participating Subdivisions, whether such Participating Subdivisions actively litigated and, if so, the nature and procedural history of such case(s);
h. The experience, reputation, and ability of the Applicant; i. Whether the Applicant’s clients brought Released Claims against Released Entities;
j. The status of discovery in cases primarily handled by the Applicant; k. The nature of any work by the Applicant on “bellwether” cases or cases that were similarly active in litigation;
l. Any pressure points successfully asserted by the Applicant in cases against Teva or Allergan or any risk for Teva or Allergan created by the Applicant in cases against them;
m. Any risk for defendants created by Applicants in cases against Teva or Allergan;
n. Successful and unsuccessful motion practice in cases worked on by the Applicant;
o. The date of filing of any cases filed by the Applicant; p. Obtaining consolidation of the litigation in the Applicant’s jurisdiction; q. The number and population of entities represented by the Applicant and the fees that would have been awarded under extinguished contingent fee arrangements;
r. Whether the Applicant’s clients brought claims against Teva or Allergan; s. Whether the Applicant has had a leadership role in the litigation, whether in state or federal court;
t. Whether the Applicant has had a leadership role in any negotiations aimed at resolving the litigation;
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u. Whether the Applicant’s cases have survived motions to dismiss; v. The extent to which the Applicant contributed to the work product used for the common benefit of opioids litigants, including, without limitation, work on ARCOS data, Prescription Data Monitoring Programs, IQVIA data, depositions, document production and analysis experts, motions, briefs and pleadings, trial preparations, and trials;
w. The extent to which litigation was done prior to and contributed to completion of settlement negotiations, as distinct from litigation that was done litigating after the announcement of the Teva Agreement or Allergan Agreement, such latter litigation both being of less value and potentially resulting a common detriment to the settlement process; and
x. Any other factors that the Fee Panel finds to be appropriate to consider after input from Applicants to the Attorney Fee Fund.
4. In the event that States and Subdivisions enter into an additional global settlement with a party or parties other than Teva or Allergan that is (a) under the jurisdiction of the MDL Court in MDL No. 2804, (b) creates a separate common benefit fund to be administered by the Fee Panel, and (c) unless the parties agree to another date, such agreement has an effective date prior to June 30, 2023, the Fee Panel may:
a. Consolidate the Common Benefit approval process to include evaluation of all Common Benefit Applications for all settlements entered after November 14, 2022;
b. Determine the fair and equitable allocation of the Aggregate Common Benefit Fees that come after November 14, 2022;
c. Give consideration to the amount and timing of each settlement, including the amount and timing of Common Benefit Fees;
d. The Fee Panel shall abide by the applicable Attorney Fee Agreement in each of the Settlements in Allocating the Common Benefit Fees provided for in the Settlement; and
e. Be guided in their work by the Orders of the Court related to Fees and Costs.
5. The Fee Panel shall develop procedures for receiving a single application, which may be updated or amended based on new information (such as participation by additional Litigating Subdivisions) from each Applicant seeking compensation from each sub fund of the Attorney Fee Fund pursuant to processes and procedures developed by the Fee Panel, which shall not be inconsistent with this Fee Agreement. Any request for attorneys’ fees not included on the single application or through the updating/amendment process designed by the Fee Panel R-19
shall be deemed waived. For purposes of transparency and to permit the Fee Panel to conduct its work, the application from each Applicant shall, at a minimum, require each Applicant to:
a. Identify all Litigating Subdivisions for which s/he is seeking payment from the Attorney Fee Fund;
b. Identify all Subdivisions in both Settling and Non-Settling States (and, where applicable, Tribal Nations) with respect to which s/he has a Fee Entitlement with respect to Relevant Claims against Released Entities, and identify all cocounsel in such cases; c. Identify which of those Subdivisions are Participating Subdivisions and which are not (with similar information for Tribal Nations, where applicable); d. Specify the specific fund or funds within the Attorney Fee Fund from which the Attorney is seeking compensation;
e. Demonstrate his or her eligibility for compensation from the relevant sub funds within the Attorney Fee Fund pursuant to the criteria set forth for the relevant sub fund;
f. Identify any and all Fee Entitlements from representations of States, Tribal Nations, or other plaintiffs related to Released Claims against Released Entities or in opioids-related matters;
g. Notwithstanding “a-f” above, the Panel may consider a supplemental application if the Applicant shows good cause why circumstances exist that will lead to consideration for additional Common Benefit award. Examples would include, but are not limited to, an Applicant having Non-Participating Litigating Subdivision clients that subsequently become Participating Subdivisions, a Bar Date passes that increases participation or the Participation Tier, or an Allocation Agreement is reached.
6. With respect to the Common Benefit Fund, the Fee Panel shall (subject to any applicable MDL Court Order):
a. Review the applications of all Applicants seeking compensation from the Common Benefit Fund, including determining eligibility for each Applicant as set forth in subsection III.G.
b. Reduce, on an annual basis, Teva’s or Allergan’s payment obligations, as set forth in paragraph III.E.7. The Panel shall inform Teva or Allergan, and the MDL PEC of all such amounts and adjust payment obligations accordingly. c. Using criteria set forth in subsections III.E and III.H, allocate amounts from the Common Benefit Fund to eligible Applicants, including payment amounts for each Payment Year. In making such allocations, the Panel shall apply the R-20
principles set forth in paragraph III.E.6 and shall allocate any reduction in the payments specified in paragraph III.E.7 to the amounts paid to Applicants with a Common Benefit Fee Entitlement.
7. With respect to the Contingency Fee Fund, the Fee Panel shall:
a. Review the applications of all Attorneys seeking compensation from the Litigating Subdivision Fee Fund, including determining eligibility for each Attorney as set forth in subsection III.G.
b. Apply the Mathematical Model in Exhibit A.
c. Use such allocations to reduce on an annual basis the payment obligations of Teva or Allergan to the Attorney Fee Fund as set forth in paragraph III.F.4, and distributions therefrom, and inform Teva or Allergan and the MDL PEC of all such adjustments.
8. To the extent that there is a dispute about the calculations of the Fee Panel related to the amounts that Teva or Allergan is required to pay (including application of any reductions or offsets under this Fee Agreement), such disputes shall be presented to the Fee Panel and any disputed funds be paid into/held in escrow.
The Fee Panel shall resolve such disputes expeditiously, with either Party having the right to seek review from the MDL Court.
9. For purposes of determination of fee or cost awards, allocations, reductions, and possible reversions under this Fee Agreement, unless specified otherwise a Subdivision will be considered a Non-Participating Subdivision if it is not a Participating Subdivision as of the deadline for the application for the fee at issue (or, if the determination does not involve a specific application, the date on which the record for such determination closes).
10. In the event that the Fee Panel, through the use of the Mathematical Model set forth in Exhibit A, allocates funds from the Contingency Fee Fund for an Attorney based on a Qualifying Representation of a Participating Litigating Subdivision and that Subdivision is in a Settling State in which the Consent Judgment has not been approved, such funds shall be placed into escrow until the Consent Judgment is approved, after which time they shall be released.
I. Miscellaneous.
1. The Fee Panel shall charge an hourly rate approved by the Court. The PreEffective Date costs associated with the Cost and Expense Fund Administrator shall be paid from funds in the Cost Fund. Post-Effective Date, the cost of the Fee Panel shall be charged against the applicable Fee Fund based on allocation by the Fee Panel and shall not be otherwise funded by Teva and Allergan.
2. The MDL PEC shall provide to Teva and Allergan information they have that identifies Attorneys who represent Litigating Subdivisions who are not R-21
Participating Subdivisions and who have an obligation to pay a common benefit assessment, either due to the MDL Court’s orders or pursuant to a Participation Agreement.
3. Participating Subdivisions agree to instruct their counsel to treat information, work product and expert materials as confidential under Rule 1.6 of the ABA Model Rules of Professional Conduct. Accordingly, an Attorney shall not share information or work product with, or experts or materials to, non-participants (other than the Attorney’s own current clients or their lawyers, consultants, experts or other representatives or agents). However, nothing herein shall prevent MDL Leadership or PEC Counsel from fulfilling their obligations in any MDL and the MDL Court Order.
IV. Miscellaneous
A. Termination. If the Teva Agreement or Allergan Agreement does not proceed past the Reference Date, whether because Teva and Allergan do not determine to proceed or for any other reason, this Fee Agreement shall be null and void, neither Teva nor Allergan shall have any obligation to make any payments under this Fee Agreement other than Fee Panel costs advanced, and Teva, Allergan, and the PEC shall take such steps as are necessary to restore the status quo ante.
B. MDL Court Consideration. This Fee Agreement shall be attached as an exhibit to the Teva Agreement and Allergan Agreement. This Fee Agreement shall also be submitted by Teva, Allergan, and the MDL PEC to the MDL Court for approval pursuant to the motion and order that shall be attached, prior to the Preliminary Agreement Date of the Agreements, as Exhibit B.
1. In the event that the MDL Court, through an order, makes any change to the amounts potentially to be paid by Teva and Allergan under this Fee Agreement, makes any change to the Fee Panel’s consideration of the factors set forth in paragraph III.E.6, or any other material change to the draft Order attached as part of Exhibit B or the terms of this Fee Agreement, Teva, Allergan, and the MDL PEC shall meet and confer concerning such changes.
2. If Teva, Allergan, and the MDL PEC are unable to reach agreement and revisions to this Fee Agreement, this Fee Agreement shall be null and void, Teva and Allergan shall have no obligation to make any payments under this Fee Agreement, and Teva, Allergan, and the MDL PEC shall take such steps as are necessary to restore the status quo ante.
C. Amendment. Once the MDL Court has entered an order implementing this Fee Agreement, this Fee Agreement can only be amended by (1) written agreement of Teva, Allergan, and the MDL PEC and (2) approval by the MDL Court.
D. Jurisdiction and Enforcement. The MDL Court shall have exclusive and ongoing jurisdiction over the enforcement and implementation of this Fee Agreement as set forth herein. The MDL PEC shall be the Authorized Party to enforce this Fee R-22
Agreement, as to the payment obligations of Teva and Allergan as set forth in this subsection and as to Attorneys making application to the Funds under this Fee Agreement. Solely for purposes of assessing or allocating common benefit fees, the MDL Court will continue to have jurisdiction over the work product developed in the MDL Court by and under the direction of the MDL PEC with respect to claims against Teva or Allergan, including data and documents, depositions, expert reports, briefs and pleadings; and the MDL Court’s protective orders, management orders, and other decisions regarding such discovery and other work product, including but not limited to, conditions on its use, will continue in full force and effect. Nothing in this subsection authorizes the MDL Court to act contrary to this Agreement or provides the MDL Court with jurisdiction over the Teva Agreement or Allergan Agreement.
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EXHIBIT S
Agreement on the State Outside Counsel Fee Fund
for Manufacturer Settlements
1. Definitions.
a. “Manufacturer” means any of Teva and Allergan, and “Manufacturers” means all of the foregoing.
b. “Multistate Manufacturer Settlement Agreement” means This Settlement Agreement along with the separate settlement of opioids-related claims among 30 or more states and the other Manufacturer.
c. “This Settlement Agreement” means the settlement agreement between the Settling States and the Manufacturer to which this Agreement is attached as an Exhibit.
d. “Settling Manufacturer” means the Manufacturer that is a party to This Settlement Agreement.
e. “Settling States” has the meaning given such term in the relevant Multistate Manufacturer Settlement Agreement.
2. Creation of a State Outside Counsel Manufacturers Fee Fund. The Settling States have agreed to the creation of a state outside counsel fee fund to pay reasonable attorneys’ fees of Settling States which have retained outside counsel in connection with litigation against one or more Manufacturers (such fund, the “State Outside Counsel Manufacturers Fee Fund”).
3. State Outside Counsel Manufacturers Fee Fund Administration. The State Outside Counsel Manufacturers Fee Fund shall be administered separately from any other funds for the payment of attorneys fees or costs in connection with This Settlement Agreement, including any common benefit fund, contingency fee fund for subdivision counsel, state cost fund, or MDL expense fund. If necessary, a committee of Attorneys General shall be convened to oversee the State Outside Counsel Manufacturers Fee Fund (the “Manufacturers Fee Fund Committee”). The Manufacturers Fee Fund Committee shall be appointed by the Settling State Members of the Enforcement Committee and shall be comprised solely of Attorneys General of Settling States that engaged outside counsel to pursue litigation against one or more Manufacturers. The Settlement Fund Administrator (the “Fee Fund Administrator”) shall administer the State Outside Counsel Manufacturers Fee Fund according to this Exhibit and, if convened, the guidelines and directives of the Manufacturers Fee Fund Committee.
4. State Outside Counsel Manufacturers Fee Eligibility. a. To receive any amount from the State Outside Counsel Manufacturers Fee Fund, both of the following must be true:
1. an outside counsel to a Settling State must have filed and maintained S-2
an action in the name of a Settling State or its Attorney General against a Manufacturer in a state or federal court as of November 1, 2022; and
2. the State must become a Settling State for each Multistate Manufacturer Settlement Agreement for which it is eligible. b. No Settling State (or its outside counsel) shall receive funds from both the State Outside Counsel Manufacturers Fee Fund and any “Additional Restitution Amount” as may be provided for in This Settlement Agreement. c. In addition to the eligibility criteria set forth in Paragraph 4.a, above, and for the avoidance of doubt, only Settling States under This Settlement Agreement are eligible to receive any funds paid into the State Outside Counsel Manufacturers Fee Fund as a result of This Settlement Agreement.
5. State Outside Counsel Manufacturers Fee Fund Amount. The Settling Manufacturer shall pay funds into the State Outside Counsel Manufacturers Fee Fund in an amount equal to, and on the schedule identified in, Exhibit M (the “Contribution”). The Settling Manufacturer’s Contribution shall be subject to a reduction as described in Paragraph 8, below.
6. State Outside Counsel Manufacturers Fee Fund Availability and Calculation of Amount.
a. The State Outside Counsel Manufacturers Fee Fund shall be available to compensate private outside counsel for Settling State Attorneys General for approved fees arising out of representation of the Settling State pursuant to the schedule attached to this agreement as Schedule I (the “Fee Schedule”). b. The Fee Schedule is intended to reflect the fee calculation in subparagraphs 6.c and 6.d, below (the “Fee Calculation”). Subject to adjustments required by Paragraph 8, below, in the event of any discrepancy between the Fee Schedule and the Fee Calculation, the Fee Schedule shall control. Each Settling State, by becoming a Participating State in This Settlement Agreement, agrees that the Fee Schedule reflects the Fee Calculation and waives any right to contest the accuracy of the Fee Schedule, absent manifest error, the exclusion of a Settling State, or the inclusion of a Non-Settling State. The version of the Fee Schedule reflecting any necessary adjustments shall be the “Final Fee Schedule.”
c. Except as provided in Paragraph 6.d, below, fees shall be aggregated across the Multistate Manufacturer Settlement Agreements and be calculated by adding two components: (a) a fixed amount consisting of fifty percent (50%) of the amount of remediation funds allocated to a Settling State and its Subdivisions pursuant to the Multistate Manufacturer Settlement Agreements multiplied by
4.5% (or, if lower, the applicable contingency fee percentage in the Settling State’s outside counsel contract); and (b) a proportional percentage of the S-3
remaining fee due under that Settling State’s contract with its outside counsel assuming that fifty percent (50%) of the Settling State’s recovery is allocable to a Settling State (rather than allocable to the Settling State’s Participating Subdivisions) so that the fees of all eligible Settling States (minus the fixed amount that would have been allocated to any Non-Settling States had they become Settling States) exhausts the State Outside Counsel Manufacturers Fee Fund. The proportional share percentage will be the same for each Settling State included in the State Outside Counsel Manufacturers Fee Fund. Except as set forth in Paragraph 6.d, fees shall be split proportionally among each Multistate Manufacturer Settlement Agreement, as set forth on the Fee Schedule.
d. Notwithstanding the foregoing, fees for the State of Oklahoma, if it becomes a Settling State under the Multistate Manufacturer Settlement Agreement with Allergan, shall be limited to Oklahoma’s share of the State Outside Counsel Manufacturers Fee Fund derived from Allergan’s Contribution. Oklahoma’s share of the State Outside Counsel Manufacturers Fee Fund derived from Teva’s Contribution shall be reallocated proportionally among the other Settling States eligible to receive payments from the State Outside Counsel Manufacturer Fee Fund.
e. All amounts paid will be less the following:
1. Any costs or fees of the Fee Fund Administrator. The Fee Schedule reflects a holdback amount of $50,000 for such administrative expenses of the Fee Fund Administrator, the remainder of which shall be disbursed proportionally to States receiving monies from the State Outside Counsel Manufacturers Fee Fund at the conclusion of such administration.
7. Payment by the Fee Fund Administrator.
a. The Fee Fund Administrator shall hold the Contribution in escrow until the earlier of (1) both Multistate Manufacturer Settlement Agreements become effective or (2) when instructed by the Settling State Members of the Enforcement Committee.
b. Subject to eligibility pursuant to Paragraph 4, above, a Settling State’s outside counsel may receive funds from the State Outside Counsel Manufacturers Fee Fund in the following scenarios (“Payment Scenarios”):
1. The Settling State’s outside counsel agrees that the amount listed for such state on the Final Fee Schedule either satisfies in full or exceeds the amounts owed to all such Settling State’s outside counsel and such counsel has provided written notice waiving all entitlement to additional fee in respect of any Multistate Manufacturer Settlement S-4
Agreement.
2. The Settling State and its outside counsel enter into a signed writing establishing the amount owed to the counsel, which includes an agreement on the payment of the amount listed for such state on the Final Fee Schedule and waives any right of the State or its outside counsel to additional amounts from the State Outside Counsel Manufacturers Fee Fund.
3. A final judgment is entered that is no longer appealable, which judgement adjudicates the amount owed to the Settling State’s counsel in respect of This Settlement Agreement and directs the Manufacturers Fee Fund Committee how to pay the amount listed on the Final Fee Schedule for such State.
If no Payment Scenario is applicable with respect to a Settling State, then the Settling State’s share shall be placed in an interest-bearing escrow account (less reasonable expenses of the Fee Fund Administrator) and held unless and until a Payment Scenario is applicable.
c. Upon the applicability of a Payment Scenario 1 with respect to a Settling State, the Fee Fund Administrator shall pay that Settling State’s outside counsel the amount identified on the Final Fee Schedule for such state or such lesser amount that satisfies the Settling State’s obligation to its outside counsel in full. Any remaining allocation to such State shall be paid to the Settling State.
d. Upon the applicability of a Payment Scenario 2 or 3 with respect to a Settling State, the Fee Fund Administrator shall release monies from the State Outside Counsel Manufacturers Fee Fund in either the amount held by the Fee Fund Administrator, if the amount of the agreement or judgment is equal to or more than the amount held, or the amount indicated in the agreement or in the final judgment, if the amount in the agreement or judgment is less than the amount held.
e. Nothing herein, including the amounts listed in Paragraph 6 above or on any Fee Schedule, shall prevent a Settling State from arguing in any proceeding with its outside counsel that (i) its recovery was less than fifty percent (50%) of the recovery in the settlement agreement down to and including fifteen percent (15%) of the total recovery; (ii) any payment should be discounted by an appropriate discount rate commensurate to the risk of the settlement agreement and the timeline that the Settling State is receiving its payments; (iii) the settlement amount should be lower because the amount a Settling State receives was reduced because such Settling State’s outside counsel failed to obtain joinder from a Settling State’s Subdivision(s) that the outside counsel also represented; or (iv) any S-5
limitation placed by the Settling Manufacturer bars payment of a higher fee to outside counsel.
f. In the event the amount due to the Settling State’s outside counsel from an escrow account is less than the total amount of funds escrowed on the account of the Settling State, the balance shall be paid to the Settling State. In no event, other than a State becoming a Non-Settling State, shall funds revert to a Manufacturer.
8. Non-Settling States; Reversion and Redistribution. Amounts owed by the Settling Manufacturer to the State Outside Counsel Manufacturers Fee Fund shall be reduced by amounts allocated to the fixed amount for such State under This Settlement Agreement in the event that a listed State becomes a Non-Settling State. The payments for the other Settling States reflected in the Fee Schedule shall be adjusted by the Fee Fund Administrator to reflect a recalculated proportional percentage under the Fee Calculation.
9. Interpretation.
a. This Agreement shall be an Exhibit to each Multistate Manufacturer Settlement Agreement and shall include the Fee Schedule setting forth the presumptive payment calculations for each eligible Settling State. By joining This Settlement Agreement, each State agrees on the presumptive accuracy of the Fee Schedule, absent manifest error, the inclusion of a Non-Settling State, or the exclusion of a Settling State. b. It is the intent of all parties that the State Outside Counsel Manufacturers Fee Fund function in a similar manner, with similar calculations and mechanics, as the “State Outside Counsel Fee Fund” established in Exhibit S of that certain settlement agreement dated as of July 21, 2021 setting forth the terms of settlement between and among McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation, on the one hand, and certain settling states and certain participating subdivisions, on the other hand.
S-1
Schedule I to Exhibit S
Fee Schedule
State
Total Fee Allergan Share Teva Share
Alaska $1,252,625.36 $424,966.99 $827,658.36
Delaware $2,194,254.56 $744,425.11 $1,449,829.45
Georgia $6,557,324.06 $2,224,644.65 $4,332,679.41
Hawaii $1,272,349.43 $431,658.60 $840,690.83
Idaho $1,413,869.58 $479,670.88 $934,198.70
Kentucky $5,087,998.16 $1,726,159.60 $3,361,838.56
Mississippi $1,737,202.53 $589,365.16 $1,147,837.38
Nevada
$6,279,564.47 $2,130,411.64 $4,149,152.83
New Mexico
$5,218,189.24 $1,770,328.36 $3,447,860.88
Ohio $6,831,882.94 $2,317,791.78 $4,514,091.16
Oklahoma $1,470,349.73 $1,470,349.73 $-
Puerto Rico $4,823,581.25 $1,636,453.24 $3,187,128.01
South Dakota $673,251.45 $228,408.00 $444,843.46
Admin Expense
Holdbacks
$18,047.03 $31,952.97
Total $16,192,680.76 $28,669,762.00
T-1
Exhibit T
Agreement on the Joint State Cost Fund
1. Definitions.
a. “Opioids Defendant” means Teva, Allergan, or such other defendant in opioids-related litigation that enters into a Multistate Settlement after November 1, 2022, and “Opioids Defendants” means all of the foregoing. b. “Multistate Settlement” means this Settlement Agreement along with any other settlement of opioids-related claims among 30 or more states and an Opioids Defendant.
c. “Settlement Agreement” means the settlement agreement between the Settling States and the Opioids Defendant to which this Agreement is attached as an Exhibit.
d. “Settling Opioids Defendant” means the Opioids Defendant that is a party to the Settlement Agreement.
e. “Settling States” has the meaning given such term in the Settlement Agreement.
2. Creation of a State Cost Fund. The Settling Opioids Defendant and the Settling States agree to the creation of a fund to pay costs and expenses associated with litigation and investigations related to the opioids litigation (such fund, the “State Cost Fund”). The State Cost Fund shall be administered separately from any other funds for the payment of attorneys fees or costs in connection with the Settlement Agreement, including any common benefit fund, contingency fee fund for subdivision counsel, subdivision cost fund, or MDL expense fund.
However, the State Cost Fund shall be administered jointly with similar “State Cost Funds” created in other Multistate Settlements after November 1, 2022; any state cost funds jointly administered in this manner shall be referred to as the “Joint State Cost Fund.” To the extent permissible and feasible, the Joint State Cost Fund may also be jointly administered with any fund for reimbursement of states’ litigation and investigation costs established by a bankruptcy plan, including the Mallinckrodt bankruptcy plan, any plans that may emerge from the bankruptcies of Purdue and Endo, and any similar bankruptcies of opioids defendants. To the extent feasible, the Joint State Cost Fund may also be jointly administered with the State Cost Funds established pursuant to the Distributors Multistate Settlement and the Janssen Multistate Settlement.
3. State Cost Fund Amount. The Settling Opioids Defendant shall pay into the State Cost Fund in the amount listed on, and on the schedule set forth in, Exhibit M (the “Settling Opioids Defendant’s Contribution”) for the purpose paying States’ costs and expenses associated with to the opioid litigation.
T-2
4. Joint State Cost Fund Committee. A committee of Attorneys General or their designated representatives (such committee, the “Joint State Cost Fund Committee”) shall oversee the Joint State Cost Fund. The committee shall be appointed by the Settling State Members of the Enforcement Committee, who shall aim to (i) have equal representation between states that retained contingency fee outside counsel and states that did not retain contingency fee outside counsel with respect to opioids-related litigation, and (ii) maintain consistency of committee membership across state cost funds that compose the Joint State Cost Fund. The Settling State Members of the Enforcement Committee may by majority vote add to or change the composition of the Joint State Cost Fund Committee.
5. Joint State Cost Fund Administrator.
a. The Joint State Cost Fund Committee may select an administrator (the “Joint State Cost Fund Administrator”), who shall administer the Joint State Cost Fund and direct payments to Settling States according to the guidelines and directives of the Joint State Cost Fund Committee. While the expenses of the Joint State Cost Fund Administrator shall be reimbursable pursuant to the principles and guidelines listed below, the Joint State Cost Fund Administrator shall first rely on any separate funds that may be set aside for such purpose in any Multistate Settlement.
b. The Joint State Cost Fund Administrator shall be responsible, under the direction and supervision of the Joint State Cost Fund Committee, for receiving and reviewing applications for reimbursement from the Joint State Cost Fund. This may include the creation of an audit process to ensure the integrity of submissions, as well as reimbursement rules to incentivize accurate submissions.
6. State Cost Fund Guidelines and Principles.
a. Monies in the State Cost Fund shall be released without any delay to reimburse Settling States for documented costs incurred or paid in connection with litigation and investigation related to the opioid litigation. b. In allocating the Joint State Cost Fund, the Joint State Cost Fund Committee shall seek to comply with the following principles:
1. Each State Cost Fund should be used to reimburse costs incurred by States that are Settling States in the Multistate Settlement from which funds are paid. (However, the foregoing sentence does not preclude a Non-Settling State that joins a separate Multistate Settlement from participating in the Joint State Cost Fund with respect to contributions made by other Opioids Defendants.)
2. Funds in any State Cost Fund shall be primarily used to reimburse T-3
costs incurred prior to the date on which the relevant Multistate Settlement was first made available for participation to eligible States. Regardless of other factors considered in prioritizing payments, all costs incurred prior to January 1, 2023, shall be paid before any costs incurred after that date are paid.
3. The Joint State Cost Fund shall prioritize the reimbursement of the following over reimbursement of any State’s litigation or investigation costs:
• the reasonable costs of the Joint State Cost Fund
Administrator;
• repayment of National Association of Attorneys General grants made in connection with opioid investigations and litigation, without regard to when the grants were made; • repayment of state-attributable costs of any mediator in connection with negotiations of a Multistate Settlement;
4. The Joint State Cost Fund shall seek to prioritize costs in the following order:
• litigation-related costs; then
• investigation-related costs; then
• settlement and negotiation related costs; then
• cost shares.
5. Costs incurred by a State’s outside counsel that the State is contractually obligated to reimburse shall be treated as costs incurred by a State.
6. As between similar categories of costs (e.g., defendant-specific litigation-related costs), the Joint State Cost Fund shall first reimburse costs incurred by a State’s outside counsel that the State is contractually obligated to reimburse out of its recovery, and then reimburse costs directly incurred by States.
7. The Joint State Cost Fund shall be available to reimburse only those costs which have not yet been reimbursed to a State from any other source, including any other fund set aside in a Multistate Settlement or bankruptcy plan for the reimbursement of costs or any individual T-4
state settlements.
8. The Joint State Cost Fund should not reimburse expenses that are expected to be reimbursed from another source, such as a bankruptcy debtor, unless such expected reimbursements do not come to fruition within a reasonable amount of time. This includes cost shares paid by states.
9. When coordinating among different state cost funds that each could be used to reimburse a given expense, the Joint State Cost Fund Committee may set guidelines to equitably distribute
reimbursements across all state cost funds in a manner that prioritizes costs unlikely to be otherwise reimbursed to a similarly situated State.
10. The Joint State Cost Fund may deny reimbursement of costs, on either an individual basis or a categorical basis, that a supermajority (75%+) of the Joint State Cost Fund Committee determines to be unreasonable.
11. After all costs identified in the foregoing have been reimbursed, the remaining funds in the Joint State Cost Fund shall be distributed to states in proportion to their allocation of remediation payments in the Mallinckrodt bankruptcy plan. Such distribution shall be treated as a reimbursement for States’ unenumerated costs of administering the Multistate Settlements and no subdivision shares shall be carved out of such disbursement, nor shall any attorney’s fees be assessed against such distribution (unless individually agreed to by a State). c. In applying the foregoing principles, the Joint State Cost Fund Committee shall have the discretion to vary their application in order to ensure equity among similarly situated states and to facilitate the ease and speed of administering the Joint State Cost Fund. The Joint State Cost Fund Committee may also apply percentages to approximate costs attributable to a particular Opioids Defendant (or categories of Opioids Defendants) in a manner that seeks to treat similarly situated states equitably. d. The Joint State Cost Fund Committee shall establish guidelines for the submission and approval of expenses eligible for reimbursement from the Joint State Cost Fund, which guidelines may be coordinated and consolidated with any similar cost funds in other state opioid settlements for purposes of joint administration and efficiency.
e. Unless waived by the Joint State Cost Fund Committee, the Joint State Cost T-5
Fund Administrator shall, in accordance with such guidelines, receive from Settling States records sufficient to demonstrate the incurrence and payment of each expense.
f. Where the Joint State Cost Fund Committee determines by a supermajority vote (75%+) that outside counsel for a Settling State has failed to exercise reasonable diligence in reviewing submitted costs for allowability, and such failure has resulted in the reimbursement of unallowed costs to such outside counsel, the Committee shall have the discretion to reduce or recover payments made to such outside counsel in an amount calculated to incentivize the exercise of reasonable diligence.
7. State Undertakings. Each State submitting for reimbursement of costs from the Joint State Cost Fund agrees:
a. to only submit costs allowable under this Joint State Cost Fund Agreement; b. to provide all back-up documentation that may be requested with respect to any submitted cost and to make itself available for any questions related to such costs;
c. to exercise reasonable diligence to ensure that all submitted costs are allowable under (i) this Joint State Cost Fund Agreement, (ii) the State’s contract with its outside counsel, if relevant, (iii) state law, and (iv) the policies and procedures applicable to the State’s retention of outside counsel, if relevant; and
d. to promptly return any excess payments made to the State or its outside counsel from the Joint State Cost Fund, including payments made for costs that were reimbursed from another source or are not allowable hereunder.
ATTACHMENT #2
Proposed California State-Subdivision Agreement
Regarding Distribution and Use of
Settlement Funds – Teva Settlement
1. Introduction
Pursuant to the Teva Settlement Agreement, dated as of November 22, 2022, and any revision thereto (the “Teva Settlement Agreement”), including Section VIII and Exhibit O, the State of California proposes this agreement (the “CA Teva Allocation Agreement”) to govern the allocation, distribution, and use of Settlement Fund payments made to California pursuant to Sections VI, VII, and VIII of the Teva Settlement Agreement. For the avoidance of doubt, this agreement does not apply to payments made pursuant to Sections IX, XIII, or XIV of the Teva Settlement Agreement.
Pursuant to Exhibit O, Paragraph 4, of the Teva Settlement Agreement, acceptance of this CA Teva Allocation Agreement is a requirement to be an Initial Participating Subdivision. 1 Further, pursuant to Sections X.B and X.C of the Teva Settlement Agreement and Sections IX.B and IX.C of the Allergan Settlement Agreement, eligible Subdivisions must participate in both the Teva Settlement Agreement and Allergan Settlement Agreement, or neither.
2. Definitions
a) CA Participating Subdivision means a Participating Subdivision that is also (a) a Plaintiff Subdivision and/or (b) a Subdivision with a population equal to or greater than 10,000. For the avoidance of doubt, eligible CA Participating Subdivisions are those California subdivisions listed in Exhibit C (excluding Litigating Special Districts) and/or Exhibit I to the Teva Settlement Agreement. b) Allergan Settlement Agreement means the Allergan Settlement Agreement dated November 22, 2022, and any revision thereto.
c) CVS Settlement Agreement means the CVS Settlement Agreement dated December 9, 2022, and any revision thereto as well as any modification thereto entered into by the State of California and CVS.
d) Distributor Settlement Agreement means the Distributor Settlement Agreement dated July 21, 2021, and any revision thereto.
e) Janssen Settlement Agreement means the Janssen Settlement Agreement dated July 21, 2021, and any revision thereto.
f) Walgreens Settlement Agreement means the Walgreens Settlement Agreement dated December 9, 2022, and any revision thereto.
1 A parallel but separate agreement (the “CA Allergan Allocation Agreement”) will govern the allocation, distribution, and use of settlement fund payments under the Allergan Settlement Agreement.
1 g) Walmart Settlement Agreement means the Walmart Settlement Agreement dated November 14, 2022, and any revision thereto.
h) CA Litigating Special District means a Litigating Special District located in California. CA Litigating Special Districts include Downey Unified School District, Elk Grove Unified School District, Kern High School District, Montezuma Fire Protection District (located in Stockton, California), Santa Barbara San Luis Obispo Regional Health Authority, Inland Empire Health Plan, Health Plan of San Joaquin, San Leandro Unified School District, Pleasant Valley School District Board, and LA Care Health Plan.
i) Plaintiff Subdivision means a Subdivision located in California, other than a CA Litigating Special District, that filed a lawsuit, on behalf of the Subdivision and/or through an official of the Subdivision on behalf of the People of the State of California, against one or more Opioid Defendants prior to October 1, 2020. j) Opioid Defendant means any defendant (including but not limited to Teva Pharmaceutical Industries Ltd., Allergan Finance, LLC, Allergan Limited, CVS Health Corporation, CVS Pharmacy, Inc., Walgreen Co., Walmart Inc., Johnson & Johnson, Janssen Pharmaceuticals, Inc., Purdue Pharma L.P., Cardinal Health, Inc., AmerisourceBergen Corporation, and McKesson Corporation) named in a lawsuit seeking damages, abatement, or other remedies related to or caused by the opioid public health crisis in any lawsuit brought by any state or local government on or before October 1, 2020.
3. General Terms
This agreement is subject to the requirements of the Teva Settlement Agreement, as well as applicable law, and the Teva Settlement Agreement governs over any inconsistent provision of this CA Teva Allocation Agreement. Terms used in this CA Teva Allocation Agreement have the same meaning as in the Teva Settlement Agreement unless otherwise defined herein.
Pursuant to Section VIII(E)(1) of the Teva Settlement Agreement, (a) all Settlement Fund payments will be used for Opioid Remediation, except as allowed by Section VIII(C) of the Teva Settlement Agreement; and (b) at least seventy percent (70%) of Settlement Fund payment amounts will be used solely for future Opioid Remediation.
4. State Allocation
The Settlement Fund payments to California,
2 pursuant to the Teva Settlement Agreement, shall
be allocated as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the 2 For purposes of clarity, use of the term “California” refers to the geographic territory of California and the state and its local governments therein. The term “State” or “State of California” refers to the State of California as a governmental unit. 2 Settlement Fund shall be combined pursuant to this CA Teva Allocation Agreement, and 15% of that total shall be allocated to the State of California (the “State of California Allocation”), 70% to the California Abatement Accounts Fund (“CA Abatement Accounts Fund”), and 15% to the California Subdivision Fund (“CA Subdivision Fund”).
A. State of California Allocation
Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by the State for future Opioid Remediation.
B. CA Abatement Accounts Fund
i. Allocation of CA Abatement Accounts Funds
a) Seventy percent of the total Settlement Fund payments will be allocated to the CA Abatement Accounts Fund. The funds in the CA Abatement Accounts Fund will be allocated based on the allocation model developed in connection with the proposed negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as adjusted to reflect only those cities and counties that are eligible, based on population or litigation status, to become a CA Participating Subdivision. The percentage from the CA Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in Appendix 1 in the column entitled abatement percentage (the “Local Allocation”). For the avoidance of doubt, CA Litigating Special Districts and California towns, cities, and counties with a population less than 10,000 are not eligible to receive an allocation of CA Abatement Accounts Funds.
b) A CA Participating Subdivision that is a county, or a city and county, will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision, and will receive payments as provided in the Teva Settlement Agreement. c) A CA Participating Subdivision that is a city will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision. The Local Allocation share for a city that is a CA Participating Subdivision will be paid to the county in which the city is located, rather than to the city, so long as: (a) the county is a CA Participating Subdivision, and (b) the city has not advised the Settlement Fund Administrator that it requests direct payment at least 60 days prior to a Payment Date. A Local Allocation share allocated to a city but paid to a county is not required to be spent exclusively for abatement activities in that city, but will become part of the county’s share of the CA Abatement Accounts Funds, which will be used in accordance with Section 4.B.ii (Use of CA Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii (CA Abatement Accounts Fund Oversight).
d) A city within a county that is a CA Participating Subdivision may opt in or out of direct payment at any time, and it may also elect direct payment of only a portion of its share, with the remainder going to the county, by providing notice to the Settlement Fund Administrator at least 60 days prior to a Payment Date. For purposes of this CA Teva 3 Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San Jose and Eureka will be deemed to have elected direct payment if they become Participating Subdivisions.
e) The State will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision.
f) Funds received by a CA Participating Subdivision, and not expended or encumbered within five years of receipt and in accordance with the Teva Settlement Agreement and this CA Teva Allocation Agreement shall be transferred to the State; provided however, that CA Participating Subdivisions have seven years to expend or encumber CA Abatement Accounts Funds designated to support capital outlay projects before they must be transferred to the State. This provision shall not apply to the Cost Reimbursement Funds, which shall be controlled by Appendix 2.
ii. Use of CA Abatement Accounts Funds
a) The CA Abatement Accounts Funds will be used for future Opioid Remediation in one or more of the areas described in the List of Opioid Remediation Uses, which is Exhibit E to the Teva Settlement Agreement.
b) In addition to this requirement, no less than 50% of the funds received by a CA Participating Subdivision from the Abatement Accounts Fund in each calendar year will be used for one or more of the following High Impact Abatement Activities:
(1) the provision of matching funds or operating costs for substance use disorder facilities within the Behavioral Health Continuum Infrastructure Program; (2) creating new or expanded Substance Use Disorder (“SUD”) treatment infrastructure; (3) addressing the needs of communities of color and vulnerable populations (including sheltered and unsheltered homeless populations) that are disproportionately impacted by SUD;
(4) diversion of people with SUD from the justice system into treatment, including by providing training and resources to first and early responders (sworn and non-sworn) and implementing best practices for outreach, diversion and deflection, employability, restorative justice, and harm reduction; and/or
(5) interventions to prevent drug addiction in vulnerable youth. c) The California Department of Health Care Services (“DHCS”) may add to this list (but not delete from it) by designating additional High Impact Abatement Activities. DHCS 4 will make reasonable efforts to consult with stakeholders, including the CA Participating Subdivisions, before adding additional High Impact Abatement Activities to this list. d) For the avoidance of doubt, and subject to the requirements of the Teva Settlement Agreement and applicable law, CA Participating Subdivisions may form agreements or ventures, or otherwise work in collaboration with, federal, state, local, tribal or private sector entities in pursuing Opioid Remediation activities funded from the CA Abatement Accounts Fund. Further, provided that all CA Abatement Accounts Funds are used for Opioid Remediation consistent with the Teva Settlement Agreement and this CA Teva Allocation Agreement, a county and any cities or towns within the county may agree to reallocate their respective shares of the CA Abatement Accounts Funds among themselves, provided that any direct distribution may only be to a CA Participating Subdivision and any CA Participating Subdivision must agree to their share being reallocated.
iii. CA Abatement Accounts Fund Oversight
a) Pursuant to Section 5 below, CA Participating Subdivisions receiving settlement funds must prepare and file reports annually regarding the use of those funds. DHCS may regularly review the reports prepared by CA Participating Subdivisions about the use of CA Abatement Accounts Funds for compliance with the Teva Settlement Agreement and this CA Teva Allocation Agreement.
b) If DHCS determines that a CA Participating Subdivision’s use of CA Abatement Accounts Funds is inconsistent with the Teva Settlement Agreement or this CA Teva Allocation Agreement, whether through review of reports or information from any other sources, DHCS shall send a request to meet and confer with the CA Participating Subdivision. The parties shall meet and confer in an effort to resolve the concern. c) If the parties are unable to reach a resolution, DHCS may conduct an audit of the Subdivision’s use of the CA Abatement Accounts Funds within one year of the request to meet and confer, unless the parties mutually agree in writing to extend the meet and confer time frame.
d) If the concern still cannot be resolved, the State may bring a motion or action in the court where the State has filed its Consent Judgment to resolve the concern or otherwise enforce the requirements of the Teva Settlement Agreement or this CA Teva Allocation Agreement. However, in no case shall any audit be conducted, or motion be brought, as to a specific expenditure of funds, more than five years after the date on which the expenditure of the funds was reported to DHCS, in accordance with this agreement. e) Notwithstanding the foregoing, this Agreement does not limit the statutory or constitutional authority of any state or local agency or official to conduct audits, 5 investigations, or other oversight activities, or to pursue administrative, civil, or criminal enforcement actions.
C. CA Subdivision Fund
i. Fifteen percent of the total Settlement Fund payments will be allocated to the CA Subdivision Fund. All funds in the CA Subdivision Fund will be allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. The funds will be used, subject to any limits imposed by the Teva Settlement Agreement and this CA Teva Allocation Agreement, to fund future Opioid Remediation and reimburse past opioidrelated expenses, which may include fees and expenses related to litigation, and to pay the reasonable fees and expenses of the Special Master as set forth in Appendix 2.
The CA Subdivision Funds will be allocated as follows:
a) First, funds in the CA Subdivision Fund shall be used to pay the Special Master’s reasonable fees and expenses in accordance with the procedures and limitations set forth in Appendix 2 to this document;
b) Second, funds will be allocated to Plaintiff Subdivisions that are Initial Participating Subdivisions that have been awarded Costs, as defined by and in accordance with the procedures and limitations set forth in Appendix 2 to this document. c) Funds remaining in the CA Subdivision Fund, which shall consist of no less than 50% of the total CA Subdivision Fund received in any year pursuant to Appendix 2, Section 2.c.v, will be distributed to Plaintiff Subdivisions that are Initial Participating Subdivisions, in relative proportion to the Local Allocation. These funds shall be used to fund future opioid-related projects and to reimburse past opioid-related expenses, which may include fees and expenses related to litigation against any Opioid Defendant.
D. Provision for State Back-Stop Agreement
On August 6, 2021, Judge Dan Polster of the U.S. District Court, Northern District of Ohio, Eastern Division, issued an order (ECF Docket Number 3814) (“MDL Fees Order”) in the National Prescription Opiate Litigation (MDL No. 2804) “cap[ping] all applicable contingent fee agreements at 15%.” Private counsel representing Plaintiff Subdivisions should seek its contingency fees and costs from the Attorney Fee Fund or Cost Funds under the Teva Settlement Agreement and Allergan Settlement Agreement, and, if applicable, the CVS Settlement Agreement, Distributor Settlement Agreement, Janssen Settlement Agreement, Walgreens Settlement Agreement, and Walmart Settlement Agreement.
A Plaintiff Subdivision may separately agree to use its share of the CA Subdivision Fund to pay for fees or costs incurred by its contingency-fee counsel (“State Back-Stop Agreement”), pursuant to Exhibit R, section I(X), of the Teva Settlement Agreement and the MDL Fees Order, 6 so long as such contingency fees do not exceed a total contingency fee of 15% of the total gross recovery of the Plaintiff Subdivision pursuant to the Teva Settlement, inclusive of contingency fees from the national Attorney Fee Fund and this State Back-Stop Agreement. Before seeking fees or litigation costs and expenses from a State Back-Stop Agreement, private counsel representing Plaintiff Subdivisions must first seek contingency fees and costs from the Attorney Fee Fund or Cost Funds created under the Teva Settlement Agreement. Further, private counsel may only seek reimbursement for litigation fees and costs that have not previously been reimbursed through prior settlements or judgments.
To effectuate a State Back-Stop Agreement pursuant to this section, an agreement in the form of Appendix 3 may be entered into by a Plaintiff Subdivision, private counsel, and the California Office of the Attorney General. The California Office of the Attorney General shall, upon the request of a Plaintiff Subdivision, execute any agreement executed by a Plaintiff Subdivision and its private counsel if it is in the form of Appendix 3. The California Office of the Attorney General will also consider requests from Plaintiff Subdivisions to execute and enter into agreements presented in other forms.
For the avoidance of doubt, this agreement does not require a Plaintiff Subdivision to request or enter into a State Back-Stop Agreement, and no State Back-Stop Agreement shall impose any duty or obligation on the State of California or any of its agencies or officers, including without limitation the Attorney General.
5. State and Subdivision Reporting
a) DHCS will prepare an annual written report regarding the State’s use of funds from the settlement until those funds are fully expended and for one year thereafter. These reports will be made publicly available on the DHCS web site.
b) Each CA Participating Subdivision that receives payments of funds from the settlement will prepare written reports at least annually regarding the use of those funds, until those funds are fully expended and for one year thereafter. These reports will also include a certification that all funds that the CA Participating Subdivision has received through the settlement have been used in compliance with the Teva Settlement Agreement and this CA Teva Allocation Agreement. The report will be in a form reasonably determined by DHCS. Prior to specifying the form of the report DHCS will confer with representatives of the Plaintiff Subdivisions.
c) The State and all CA Participating Subdivisions receiving CA Abatement Accounts Funds will track all deposits and expenditures. Each such subdivision is responsible solely for the CA Abatement Accounts Funds it receives. A county is not responsible for oversight, reporting, or monitoring of CA Abatement Accounts Funds received by a city within that county that receives direct payment. Unless otherwise exempt, Subdivisions’ expenditures and uses of CA Abatement Accounts Funds and other Settlement Funds will be subject to the normal budgetary and expenditure process of the Subdivision. 7 d) Each Plaintiff Subdivision receiving CA Subdivision Funds will track all deposits and expenditures, as required by the Teva Settlement Agreement and this CA Teva Allocation Agreement. Among other things, Plaintiff Subdivisions using monies from the CA Subdivision Fund for purposes that do not qualify as Opioid Remediation must identify and include in their annual report, the amount and how such funds were used, including if used to pay attorneys’ fees, investigation costs, or litigation costs. Pursuant to Section VIII(C) of the Teva Settlement Agreement, such information must also be reported to the Settlement Fund Administrator and Teva.
e) In each year in which DHCS prepares an annual report DHCS will also host a meeting to discuss the annual report and the Opioid Remediation activities being carried out by the State and Participating Subdivisions.
6. Miscellaneous
a) The State or any CA Participating Subdivision may bring a motion or action in the court where the State has filed its Consent Judgment to enforce the requirements of this CA Teva Allocation Agreement. Before filing such a motion or action the State will meet and confer with any CA Participating Subdivision that is the subject of the anticipated motion or action, and vice versa.
b) Except as provided in the Teva Settlement Agreement, this CA Teva Allocation Agreement is not enforceable by any party other than the State and the CA Participating Subdivisions. It does not confer any rights or remedies upon, and shall not be enforceable by, any third party.
c) Except as provided in the CA Teva Allocation Agreement, if any provision of this agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this agreement, or the application of such provision to persons, entities, or circumstances other than those as to which it is invalid or unenforceable, will not be affected thereby, and each other provision of this agreement will be valid and enforceable to the fullest extent permitted by law. d) Except as provided in the Teva Settlement Agreement, this agreement shall be governed by and interpreted in accordance with the laws of California. 8 APPENDIX 1
DISCLAIMER: The allocation percentages herein are estimates only and should not be relied on for decisions regarding legal rights, releases, waivers, or other decisions affecting current or potential legal claims. Percentages shown in the Plaintiff Subdivision Percentage column may change pursuant to Section 4.C. of the California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds—Teva Settlement, whereas the percentages shown in the Abatement Percentage column should not change. Participating Subdivisions, underlying calculations, and the calculated allocation percentages are subject to change. Regarding the column herein entitled “Abatement Percentage,” pursuant to Section 4.B.e., the State of California will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” payments allocated to a Plaintiff Subdivision, which is not an Initial Participating Subdivision, will be re-allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. Regarding the column herein entitled “Abatement Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Abatement Account Funds received, pursuant to Section 4.B. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Subdivision Funds received, pursuant to Section 4.C.
Regarding the column herein entitled “Weighted Allocation Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the combined and weighted allocation of the Abatement Percentage and the Plaintiff Subdivision Percentage.
APPENDIX 1
100.000% 100.000% 100.000%
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
County Alameda County Alameda 2.332% 2.853% 2.4237952%
City Alameda Alameda 0.069% 0.0570162%
City Albany Alameda 0.013% 0.0107768%
City Berkeley Alameda 0.152% 0.1249656%
City Dublin Alameda 0.033% 0.040% 0.0338810%
City Emeryville Alameda 0.023% 0.0185765%
City Fremont Alameda 0.108% 0.0888576%
City Hayward Alameda 0.117% 0.0966218%
City Livermore Alameda 0.054% 0.0446740%
City Newark Alameda 0.026% 0.0217626%
City Oakland Alameda 0.486% 0.595% 0.5055601%
City Piedmont Alameda 0.014% 0.0114064%
City Pleasanton Alameda 0.067% 0.0554547%
City San Leandro Alameda 0.039% 0.0321267%
City Union City Alameda 0.043% 0.0352484%
County Amador County Amador 0.226% 0.277% 0.2349885%
County Butte County Butte 1.615% 1.975% 1.6783178%
City Chico Butte 0.216% 0.264% 0.2246499%
City Oroville Butte 0.079% 0.0646595%
County Calaveras County Calaveras 0.226% 0.277% 0.2351644% County Colusa County Colusa 0.059% 0.0489221%
County Contra Costa County Contra Costa 2.102% 2.571% 2.1844585% City Antioch Contra Costa 0.037% 0.0301879%
City Brentwood Contra Costa 0.026% 0.0215339%
City Clayton Contra Costa 0.002% 0.0018060%
City Concord Contra Costa 0.055% 0.0456676%
City Danville Contra Costa 0.010% 0.0082255%
City El Cerrito Contra Costa 0.023% 0.0189024%
City Hercules Contra Costa 0.010% 0.0078273%
1 of 15
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivisio
Percentage
Weighted
Allcation
Percentage
City Lafayette Contra Costa 0.006% 0.0046030%
City Martinez Contra Costa 0.012% 0.0098593%
City Moraga Contra Costa 0.004% 0.0031007%
City Oakley Contra Costa 0.010% 0.0079416%
City Orinda Contra Costa 0.005% 0.0038157%
City Pinole Contra Costa 0.013% 0.0110909%
City Pittsburg Contra Costa 0.053% 0.0436369%
City Pleasant Hill Contra Costa 0.013% 0.0106309%
City Richmond Contra Costa 0.146% 0.1201444%
City San Pablo Contra Costa 0.018% 0.0148843%
City San Ramon Contra Costa 0.021% 0.0176459%
City Walnut Creek Contra Costa 0.026% 0.0212132%
County Del Norte County Del Norte 0.114% 0.140% 0.1189608% County El Dorado County El Dorado 0.768% 0.939% 0.7980034% City Placerville El Dorado 0.015% 0.0127642%
City South Lake Tahoe El Dorado 0.081% 0.0665456%
County Fresno County Fresno 1.895% 2.318% 1.9693410%
City Clovis Fresno 0.065% 0.0536211%
City Coalinga Fresno 0.012% 0.0098554%
City Fresno Fresno 0.397% 0.3270605%
City Kerman Fresno 0.005% 0.0042534%
City Kingsburg Fresno 0.008% 0.0066167%
City Mendota Fresno 0.002% 0.0019387%
City Orange Cove Fresno 0.004% 0.0035607%
City Parlier Fresno 0.008% 0.0069755%
City Reedley Fresno 0.012% 0.0098804%
City Sanger Fresno 0.018% 0.0146135%
City Selma Fresno 0.015% 0.0127537%
County Glenn County Glenn 0.107% 0.131% 0.1116978%
County Humboldt County Humboldt 1.030% 1.260% 1.0703185%
APPENDIX 1
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2 of 15
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percenta
Allcation
Percentage
City Arcata Humboldt 0.054% 0.0447660%
City Eureka Humboldt 0.117% 0.143% 0.1216284%
City Fortuna Humboldt 0.032% 0.0266837%
County Imperial County Imperial 0.258% 0.315% 0.2679006% City Brawley Imperial 0.011% 0.0087986%
City Calexico Imperial 0.019% 0.0152799%
City El Centro Imperial 0.158% 0.1302522%
City Imperial Imperial 0.006% 0.0048791%
County Inyo County Inyo 0.073% 0.089% 0.0754413%
County Kern County Kern 2.517% 3.079% 2.6159145%
City Arvin Kern 0.006% 0.0046425%
City Bakersfield Kern 0.212% 0.1747198%
City California City Kern 0.009% 0.0070820%
City Delano Kern 0.030% 0.0249316%
City McFarland Kern 0.003% 0.0025644%
City Ridgecrest Kern 0.015% 0.0120938%
City Shafter Kern 0.013% 0.0103417%
City Tehachapi Kern 0.009% 0.0073580%
City Wasco Kern 0.008% 0.0069861%
County Kings County Kings 0.293% 0.2413469%
City Avenal Kings 0.007% 0.0056335%
City Corcoran Kings 0.013% 0.0107032%
City Hanford Kings 0.027% 0.0226038%
City Lemoore Kings 0.016% 0.0131900%
County Lake County Lake 0.795% 0.6545389%
City Clearlake Lake 0.041% 0.050% 0.0426253%
City Lakeport Lake 0.021% 0.026% 0.0222964%
County Lassen County Lassen 0.319% 0.391% 0.3320610%
City Susanville Lassen 0.027% 0.0219295%
County Los Angeles County Los Angeles 13.896% 16.999% 14.4437559%
APPENDIX 1
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Weighted
3 of 15
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percenta
Weighted
Allcation
Percentage
City Agoura Hills Los Angeles 0.005% 0.0040024%
City Alhambra Los Angeles 0.042% 0.0343309%
City Arcadia Los Angeles 0.033% 0.0267718%
City Artesia Los Angeles 0.001% 0.0005100%
City Azusa Los Angeles 0.026% 0.0210857%
City Baldwin Park Los Angeles 0.027% 0.0218520%
City Bell Los Angeles 0.008% 0.0068783%
City Bellflower Los Angeles 0.002% 0.0014485%
City Bell Gardens Los Angeles 0.014% 0.0114301%
City Beverly Hills Los Angeles 0.065% 0.0534897%
City Burbank Los Angeles 0.100% 0.0823132%
City Calabasas Los Angeles 0.006% 0.0048948%
City Carson Los Angeles 0.019% 0.0159805%
City Cerritos Los Angeles 0.005% 0.0039682%
City Claremont Los Angeles 0.010% 0.0082584%
City Commerce Los Angeles 0.000% 0.0002971%
City Compton Los Angeles 0.044% 0.0361882%
City Covina Los Angeles 0.028% 0.0229127%
City Cudahy Los Angeles 0.001% 0.0006020%
City Culver City Los Angeles 0.055% 0.0449894%
City Diamond Bar Los Angeles 0.001% 0.0006993%
City Downey Los Angeles 0.052% 0.0429994%
City Duarte Los Angeles 0.003% 0.0027261%
City El Monte Los Angeles 0.031% 0.038% 0.0318985%
City El Segundo Los Angeles 0.033% 0.0268020%
City Gardena Los Angeles 0.034% 0.0278088%
City Glendale Los Angeles 0.166% 0.1366586%
City Glendora Los Angeles 0.016% 0.0134411%
City Hawaiian Gardens Los Angeles 0.005% 0.0040549%
City Hawthorne Los Angeles 0.050% 0.0407833%
APPENDIX 1
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Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percenta
Weighted
Allcation
Percentage
City Hermosa Beach Los Angeles 0.018% 0.0145307%
City Huntington Park Los Angeles 0.023% 0.0190667%
City Inglewood Los Angeles 0.059% 0.0489195%
City La Cañada Flintridge Los Angeles 0.003% 0.0025565% City Lakewood Los Angeles 0.005% 0.0039971%
City La Mirada Los Angeles 0.010% 0.0081572%
City Lancaster Los Angeles 0.045% 0.0369689%
City La Puente Los Angeles 0.002% 0.0012999%
City La Verne Los Angeles 0.024% 0.0194190%
City Lawndale Los Angeles 0.002% 0.0017731%
City Lomita Los Angeles 0.004% 0.0031940%
City Long Beach Los Angeles 0.439% 0.3614151%
City Los Angeles Los Angeles 2.715% 3.321% 2.8218811%
City Lynwood Los Angeles 0.016% 0.0134345%
City Malibu Los Angeles 0.002% 0.0019269%
City Manhattan Beach Los Angeles 0.032% 0.0260686%
City Maywood Los Angeles 0.004% 0.0035528%
City Monrovia Los Angeles 0.031% 0.0254455%
City Montebello Los Angeles 0.030% 0.0250670%
City Monterey Park Los Angeles 0.031% 0.0256677%
City Norwalk Los Angeles 0.031% 0.0258228%
City Palmdale Los Angeles 0.046% 0.0375827%
City Palos Verdes Estates Los Angeles 0.006% 0.0053102% City Paramount Los Angeles 0.011% 0.0091483%
City Pasadena Los Angeles 0.146% 0.1200524%
City Pico Rivera Los Angeles 0.022% 0.0183333%
City Pomona Los Angeles 0.111% 0.0911933%
City Rancho Palos Verdes Los Angeles 0.002% 0.0012645%
City Redondo Beach Los Angeles 0.062% 0.0506992%
City Rosemead Los Angeles 0.003% 0.0028260%
APPENDIX 1
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Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percenta
Weighted
Allcation
Percentage
City San Dimas Los Angeles 0.003% 0.0022016%
City San Fernando Los Angeles 0.013% 0.0104837%
City San Gabriel Los Angeles 0.018% 0.0147726%
City San Marino Los Angeles 0.009% 0.0073791%
City Santa Clarita Los Angeles 0.022% 0.0178167%
City Santa Fe Springs Los Angeles 0.031% 0.0257531%
City Santa Monica Los Angeles 0.158% 0.1298513%
City Sierra Madre Los Angeles 0.006% 0.0048646%
City Signal Hill Los Angeles 0.010% 0.0084884%
City South El Monte Los Angeles 0.005% 0.0039603%
City South Gate Los Angeles 0.020% 0.0166272%
City South Pasadena Los Angeles 0.012% 0.0095334%
City Temple City Los Angeles 0.005% 0.0039498%
City Torrance Los Angeles 0.112% 0.0919820%
City Walnut Los Angeles 0.006% 0.0047305%
City West Covina Los Angeles 0.049% 0.0404521%
City West Hollywood Los Angeles 0.013% 0.0108517%
City Whittier Los Angeles 0.032% 0.0260581%
County Madera County Madera 0.349% 0.427% 0.3630669%
City Chowchilla Madera 0.012% 0.0097332%
City Madera Madera 0.039% 0.0318441%
County Marin County Marin 0.564% 0.690% 0.5861325%
City Larkspur Marin 0.015% 0.0124697%
City Mill Valley Marin 0.020% 0.0168401%
City Novato Marin 0.028% 0.0229824%
City San Anselmo Marin 0.009% 0.0078062%
City San Rafael Marin 0.089% 0.0729823%
County Mariposa County Mariposa 0.084% 0.103% 0.0876131% County Mendocino County Mendocino 0.439% 0.536% 0.4558394% City Ukiah Mendocino 0.039% 0.0317153%
APPENDIX 1
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Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
County Merced County Merced 0.551% 0.674% 0.5724262%
City Atwater Merced 0.024% 0.0195846%
City Livingston Merced 0.006% 0.0045873%
City Los Banos Merced 0.020% 0.0165142%
City Merced Merced 0.061% 0.0500762%
County Modoc County Modoc 0.065% 0.080% 0.0678250%
County Mono County Mono 0.023% 0.029% 0.0242606%
County Monterey County Monterey 0.908% 1.111% 0.9437083% City Greenfield Monterey 0.006% 0.0050552%
City King City Monterey 0.005% 0.0037355%
City Marina Monterey 0.017% 0.0144098%
City Monterey Monterey 0.041% 0.0336540%
City Pacific Grove Monterey 0.009% 0.0074842%
City Salinas Monterey 0.094% 0.0776576%
City Seaside Monterey 0.023% 0.0191772%
City Soledad Monterey 0.007% 0.0060870%
County Napa County Napa 0.288% 0.352% 0.2994325%
City American Canyon Napa 0.017% 0.0136869%
City Napa Napa 0.078% 0.0642783%
County Nevada County Nevada 0.441% 0.539% 0.4579827%
City Grass Valley Nevada 0.024% 0.0197805%
City Truckee Nevada 0.003% 0.0023843%
County Orange County Orange 4.364% 5.339% 4.5363576%
City Aliso Viejo Orange 0.014% 0.0113841%
City Anaheim Orange 0.554% 0.678% 0.5759282%
City Brea Orange 0.086% 0.0708897%
City Buena Park Orange 0.087% 0.0714352%
City Costa Mesa Orange 0.124% 0.152% 0.1288366%
City Cypress Orange 0.033% 0.0271937%
City Dana Point Orange 0.001% 0.0005560%
APPENDIX 1
7 of 15
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percenta
Weighted
Allcation
Percentage
City Fountain Valley Orange 0.055% 0.0455980%
City Fullerton Orange 0.137% 0.168% 0.1425744%
City Garden Grove Orange 0.213% 0.1752482%
City Huntington Beach Orange 0.247% 0.302% 0.2568420%
City Irvine Orange 0.139% 0.170% 0.1442350%
City Laguna Beach Orange 0.047% 0.058% 0.0493043%
City Laguna Hills Orange 0.014% 0.0115457%
City Laguna Niguel Orange 0.001% 0.0007071%
City Laguna Woods Orange 0.001% 0.0006546%
City La Habra Orange 0.060% 0.073% 0.0621049%
City Lake Forest Orange 0.012% 0.0101249%
City La Palma Orange 0.012% 0.0095439%
City Los Alamitos Orange 0.008% 0.0069190%
City Mission Viejo Orange 0.014% 0.0117560%
City Newport Beach Orange 0.179% 0.1470134%
City Orange Orange 0.150% 0.1231320%
City Placentia Orange 0.029% 0.035% 0.0298912%
City Rancho Santa Margarita Orange 0.001% 0.0006296%
City San Clemente Orange 0.008% 0.010% 0.0086083%
City San Juan Capistrano Orange 0.008% 0.0065510%
City Santa Ana Orange 0.502% 0.614% 0.5213866%
City Seal Beach Orange 0.020% 0.0165891%
City Stanton Orange 0.035% 0.0291955%
City Tustin Orange 0.073% 0.0600341%
City Westminster Orange 0.104% 0.127% 0.1082721%
City Yorba Linda Orange 0.044% 0.0362223%
County Placer County Placer 1.045% 1.278% 1.0861002%
City Auburn Placer 0.017% 0.0141114%
City Lincoln Placer 0.031% 0.0255599%
City Rocklin Placer 0.076% 0.0625485%
APPENDIX 1
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Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Roseville Placer 0.196% 0.1616559%
County Plumas County Plumas 0.205% 0.251% 0.2128729%
County Riverside County Riverside 4.534% 5.547% 4.7128296% City Banning Riverside 0.017% 0.0143848%
City Beaumont Riverside 0.021% 0.0171135%
City Blythe Riverside 0.012% 0.0096714%
City Canyon Lake Riverside 0.000% 0.0001761%
City Cathedral City Riverside 0.067% 0.0553614%
City Coachella Riverside 0.021% 0.0173054%
City Corona Riverside 0.147% 0.1207083%
City Desert Hot Springs Riverside 0.024% 0.0200433%
City Eastvale Riverside 0.000% 0.0002747%
City Hemet Riverside 0.051% 0.0421792%
City Indio Riverside 0.056% 0.0457794%
City Jurupa Valley Riverside 0.001% 0.0008991%
City Lake Elsinore Riverside 0.021% 0.0172949%
City La Quinta Riverside 0.063% 0.0516732%
City Menifee Riverside 0.032% 0.0260909%
City Moreno Valley Riverside 0.137% 0.1130348%
City Murrieta Riverside 0.048% 0.059% 0.0497423%
City Norco Riverside 0.016% 0.0134542%
City Palm Desert Riverside 0.083% 0.0682465%
City Palm Springs Riverside 0.076% 0.0629862%
City Perris Riverside 0.009% 0.0076774%
City Rancho Mirage Riverside 0.052% 0.0431098%
City Riverside Riverside 0.268% 0.2206279%
City San Jacinto Riverside 0.010% 0.0085936%
City Temecula Riverside 0.022% 0.0180086%
City Wildomar Riverside 0.008% 0.0062500%
County Sacramento County Sacramento 3.797% 4.645% 3.9465887%
APPENDIX 1
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Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivisio
Percentage
Weighted
Allcation
Percentage
City Citrus Heights Sacramento 0.057% 0.0465312%
City Elk Grove Sacramento 0.130% 0.1066994%
City Folsom Sacramento 0.108% 0.0890850%
City Galt Sacramento 0.017% 0.0143704%
City Rancho Cordova Sacramento 0.008% 0.0067679%
City Sacramento Sacramento 0.721% 0.882% 0.7496530%
County San Benito County San Benito 0.106% 0.130% 0.1101417% City Hollister San Benito 0.027% 0.0225355%
County San Bernardino County San Bernardino 3.259% 3.987% 3.3878124% City Adelanto San Bernardino 0.008% 0.0066640%
City Apple Valley San Bernardino 0.025% 0.0207360%
City Barstow San Bernardino 0.015% 0.0122056%
City Chino San Bernardino 0.064% 0.0525893%
City Chino Hills San Bernardino 0.001% 0.0006388%
City Colton San Bernardino 0.031% 0.0253443%
City Fontana San Bernardino 0.112% 0.0920543%
City Grand Terrace San Bernardino 0.006% 0.0051051%
City Hesperia San Bernardino 0.035% 0.0291522%
City Highland San Bernardino 0.004% 0.0029061%
City Loma Linda San Bernardino 0.009% 0.0071188%
City Montclair San Bernardino 0.039% 0.0322108%
City Ontario San Bernardino 0.179% 0.1472934%
City Rancho Cucamonga San Bernardino 0.084% 0.0689431%
City Redlands San Bernardino 0.057% 0.0469150%
City Rialto San Bernardino 0.073% 0.0603206%
City San Bernardino San Bernardino 0.178% 0.1461880%
City Twentynine Palms San Bernardino 0.002% 0.0012605%
City Upland San Bernardino 0.052% 0.0424460%
City Victorville San Bernardino 0.033% 0.0269400%
City Yucaipa San Bernardino 0.016% 0.0128772%
APPENDIX 1
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Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percenta
Weighted
Allcation
Percentage
City Yucca Valley San Bernardino 0.003% 0.0021228%
County San Diego County San Diego 5.706% 6.980% 5.9309748% City Carlsbad San Diego 0.128% 0.1050485%
City Chula Vista San Diego 0.189% 0.231% 0.1961456%
City Coronado San Diego 0.044% 0.0359095%
City El Cajon San Diego 0.113% 0.0933582%
City Encinitas San Diego 0.061% 0.074% 0.0630289%
City Escondido San Diego 0.145% 0.1192204%
City Imperial Beach San Diego 0.014% 0.0118283%
City La Mesa San Diego 0.055% 0.068% 0.0575593%
City Lemon Grove San Diego 0.022% 0.0183911%
City National City San Diego 0.080% 0.0656808%
City Oceanside San Diego 0.213% 0.1753428%
City Poway San Diego 0.062% 0.0511040%
City San Diego San Diego 1.975% 2.416% 2.0531169%
City San Marcos San Diego 0.089% 0.0733897%
City Santee San Diego 0.033% 0.0268401%
City Solana Beach San Diego 0.017% 0.0138564%
City Vista San Diego 0.052% 0.0425144%
Consolidated San Francisco San Francisco 3.026% 3.702% 3.1457169% County San Joaquin County San Joaquin 1.680% 2.055% 1.7460399% City Lathrop San Joaquin 0.009% 0.0075394%
City Lodi San Joaquin 0.053% 0.0439484%
City Manteca San Joaquin 0.054% 0.0443454%
City Ripon San Joaquin 0.013% 0.0104219%
City Stockton San Joaquin 0.313% 0.383% 0.3256176%
City Tracy San Joaquin 0.084% 0.0692047%
County San Luis Obispo County San Luis Obispo 0.816% 0.999% 0.8484126% City Arroyo Grande San Luis Obispo 0.024% 0.0199053%
City Atascadero San Luis Obispo 0.029% 0.0240680%
APPENDIX 1
ge
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Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City El Paso de Robles (Paso Robles) San Luis Obispo 0.043% 0.0353456% City Grover Beach San Luis Obispo 0.017% 0.0137881%
City Morro Bay San Luis Obispo 0.020% 0.0160922%
City San Luis Obispo San Luis Obispo 0.077% 0.0637841%
County San Mateo County San Mateo 1.074% 1.313% 1.1159599% City Belmont San Mateo 0.021% 0.0169860%
City Burlingame San Mateo 0.019% 0.0152537%
City Daly City San Mateo 0.044% 0.0363880%
City East Palo Alto San Mateo 0.013% 0.0103982%
City Foster City San Mateo 0.020% 0.0166101%
City Half Moon Bay San Mateo 0.004% 0.0031638%
City Hillsborough San Mateo 0.013% 0.0110029%
City Menlo Park San Mateo 0.015% 0.0126209%
City Millbrae San Mateo 0.013% 0.0105836%
City Pacifica San Mateo 0.016% 0.0130625%
City Redwood City San Mateo 0.056% 0.0463511%
City San Bruno San Mateo 0.021% 0.0172161%
City San Carlos San Mateo 0.013% 0.0108885%
City San Mateo San Mateo 0.052% 0.0425841%
City South San Francisco San Mateo 0.043% 0.0353943%
County Santa Barbara County Santa Barbara 1.132% 1.385% 1.1768968% City Carpinteria Santa Barbara 0.001% 0.0008938%
City Goleta Santa Barbara 0.004% 0.0028969%
City Lompoc Santa Barbara 0.047% 0.0389379%
City Santa Barbara Santa Barbara 0.122% 0.1004559%
City Santa Maria Santa Barbara 0.058% 0.0479179%
County Santa Clara County Santa Clara 2.404% 2.941% 2.4987553% City Campbell Santa Clara 0.014% 0.0112566%
City Cupertino Santa Clara 0.008% 0.0066824%
City Gilroy Santa Clara 0.025% 0.0202891%
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APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Los Altos Santa Clara 0.013% 0.0103338%
City Los Gatos Santa Clara 0.013% 0.0103220%
City Milpitas Santa Clara 0.036% 0.0298120%
City Morgan Hill Santa Clara 0.015% 0.0124619%
City Mountain View Santa Clara 0.041% 0.0334608%
City Palo Alto Santa Clara 0.039% 0.0323080%
City San Jose Santa Clara 0.294% 0.360% 0.3054960%
City Santa Clara Santa Clara 0.067% 0.0549723%
City Saratoga Santa Clara 0.004% 0.0034161%
City Sunnyvale Santa Clara 0.053% 0.0434069%
County Santa Cruz County Santa Cruz 0.783% 0.957% 0.8135396% City Capitola Santa Cruz 0.020% 0.0168191%
City Santa Cruz Santa Cruz 0.143% 0.1180348%
City Scotts Valley Santa Cruz 0.015% 0.0126525%
City Watsonville Santa Cruz 0.063% 0.0520136%
County Shasta County Shasta 1.095% 1.339% 1.1380191%
City Anderson Shasta 0.024% 0.0198896%
City Redding Shasta 0.284% 0.2334841%
City Shasta Lake Shasta 0.004% 0.0031993%
County Siskiyou County Siskiyou 0.228% 0.279% 0.2373393% County Solano County Solano 0.760% 0.6260795%
City Benicia Solano 0.031% 0.0253903%
City Dixon Solano 0.016% 0.0130849%
City Fairfield Solano 0.109% 0.0897317%
City Suisun City Solano 0.021% 0.0176183%
City Vacaville Solano 0.119% 0.0976497%
City Vallejo Solano 0.167% 0.1373644%
County Sonoma County Sonoma 1.218% 1.490% 1.2661290%
City Healdsburg Sonoma 0.032% 0.0266929%
City Petaluma Sonoma 0.081% 0.0667507%
APPENDIX 1
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Participatin
Subdivision
Classificatio
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Rohnert Park Sonoma 0.041% 0.0340759%
City Santa Rosa Sonoma 0.184% 0.1519070%
City Sonoma Sonoma 0.022% 0.0183438%
City Windsor Sonoma 0.016% 0.0129298%
County Stanislaus County Stanislaus 1.722% 1.4182273%
City Ceres Stanislaus 0.041% 0.0340260%
City Modesto Stanislaus 0.217% 0.1788759%
City Newman Stanislaus 0.006% 0.0046964%
City Oakdale Stanislaus 0.018% 0.0145531%
City Patterson Stanislaus 0.015% 0.0126590%
City Riverbank Stanislaus 0.010% 0.0085699%
City Turlock Stanislaus 0.065% 0.0531966%
County Sutter County Sutter 0.306% 0.374% 0.3179548%
City Yuba City Sutter 0.074% 0.0606242%
County Tehama County Tehama 0.213% 0.261% 0.2216654%
City Red Bluff Tehama 0.014% 0.0117771%
County Trinity County Trinity 0.082% 0.101% 0.0855476%
County Tulare County Tulare 0.809% 0.990% 0.8410949%
City Dinuba Tulare 0.014% 0.0116929%
City Exeter Tulare 0.004% 0.0032479%
City Farmersville Tulare 0.003% 0.0027879%
City Lindsay Tulare 0.007% 0.0057111%
City Porterville Tulare 0.021% 0.0171845%
City Tulare Tulare 0.037% 0.0302273%
City Visalia Tulare 0.066% 0.0545872%
County Tuolumne County Tuolumne 0.486% 0.594% 0.5047621% County Ventura County Ventura 2.192% 2.681% 2.2781201%
City Camarillo Ventura 0.002% 0.0012815%
City Fillmore Ventura 0.002% 0.0020294%
City Moorpark Ventura 0.008% 0.0067337%
APPENDIX 1
g
n
14 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Oxnard Ventura 0.156% 0.190% 0.1617338%
City Port Hueneme Ventura 0.021% 0.0174145%
City San Buenaventura (Ventura) Ventura 0.085% 0.0702181% City Santa Paula Ventura 0.014% 0.0119072%
City Simi Valley Ventura 0.065% 0.0533043%
City Thousand Oaks Ventura 0.022% 0.0179902%
County Yolo County Yolo 0.357% 0.437% 0.3713319%
City Davis Yolo 0.055% 0.0451747%
City West Sacramento Yolo 0.066% 0.0544321%
City Woodland Yolo 0.058% 0.0477904%
County Yuba County Yuba 0.214% 0.262% 0.2225679%
City Marysville Yuba 0.014% 0.0112079%
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APPENDIX 2
Cost Reimbursement Procedure
1. Additional defined terms:
a) Costs means the reasonable amounts paid for the attorney and other City Attorney and County Counsel staff time for individuals employed by a Plaintiff Subdivision at the contractual rate, inclusive of benefits and overhead, together with amounts paid for court reporters, experts, copying, electronic research, travel, vendors, and the like, which were not previously reimbursed and which were paid or incurred (i) prior to December 31, 2022 in litigation against any Opioid Defendant and/or (ii) in negotiating and drafting any CA Allocation Agreement(s) concerning a settlement with any Opioid Defendant(s).
Costs does not include attorneys’ fees, costs, or expenses incurred by private contingency fee counsel. No part of the CA Abatement Accounts Fund will be used to reimburse Costs.
b) First Claims Date means October 1, 2023 or when all applications for reimbursement of Costs, in whole or in part, from funds available under Section XIV and Exhibit R of the Teva Settlement Agreement, Section XIII and Exhibit R of the Allergan Settlement Agreement, Section X and Exhibit R of the Distributor Settlement Agreement, Section XI and Exhibit R of the Janssen Settlement Agreement, Section X and Exhibit R of the CVS Settlement Agreement, Section IX and Exhibit R of the Walgreens Settlement Agreement, or Section IX and Exhibit R of the Walmart Settlement Agreement, have been finally determined under the provisions of those agreements, whichever comes first. c) Special Master means a retired judicial officer or former public lawyer, not presently employed or retained by a Plaintiff Subdivision, who will aggregate, review, and determine the reasonable Costs to be awarded to each Plaintiff Subdivision that submits a claim for reimbursement of Costs. The Special Master will be selected by a majority vote of the votes cast by Plaintiff Subdivisions, with each such subdivision having one vote. d) Plaintiff Subdivision Committee means the committee of Plaintiff Subdivisions that will review and approve the invoices submitted by the Special Master reflecting his or her reasonable time and expenses.
2. Cost Reimbursement to Plaintiff Subdivision
a) Purpose. Substantial resources have been expended to hold Opioid Defendants accountable for creating and profiting from the opioid crisis, and this effort has been a significant catalyst in creating National Opioid Settlements with various manufacturers, distributors, and chain pharmacies.
b) Claims Procedure.
1 i. If a Plaintiff Subdivision is eligible to seek reimbursement of Costs, in whole or in part, from funds available under Section XIV and Exhibit R of the Teva Settlement Agreement, Section XIII and Exhibit R of the Allergan Settlement Agreement, Section X and Exhibit R of the CVS Settlement Agreement, Section IX and Exhibit R of the Walgreens Settlement Agreement, Section IX and Exhibit R of the Walmart Settlement Agreement, Section X or Exhibit R of the Distributor Settlement Agreement, or Section XI or Exhibit R of the Janssen Settlement Agreement, it must first make a timely application for reimbursement from such funds. To allow sufficient time for determination of those applications, no claim for Costs to the CA Subdivision Fund under this Agreement may be made before the First Claims Date. ii. A Plaintiff Subdivision that wishes to be reimbursed from the CA Subdivision Fund must submit a claim to the Special Master no later than forty-five (45) days after the First Claims Date. The Special Master will then compile and redistribute the aggregated claim totals for each Plaintiff Subdivision via email to representatives of all the Plaintiff Subdivisions. A claim for attorney and staff time must list, for each attorney or staff member included in the claim, the following information: name, title, total hours claimed, hourly rate (including, if sought, benefits and share of overhead), and narrative summarizing the general nature of the work performed by the attorney or staff member. For reimbursement of “hard” costs, the subdivision may aggregate across a category (e.g., total for travel costs). It is the intention of the Plaintiff Subdivisions that submission of documents related to reimbursement of Costs does not waive any attorney-client privilege or exemptions to the California Public Records Act.
iii. The Special Master may request, at his or her sole option, additional documents or details to assist in the final award of Costs.
iv. The Special Master will review claims for reasonableness and will notify each Plaintiff Subdivision of the final determination of its claim, and will provide a list of all final awards to all Plaintiff Subdivisions by email or, upon request, via First Class U.S. Mail. Any Plaintiff Subdivision may ask the Special Master to reconsider any final award within twenty-one (21) days. The Special Master will make a final determination on any such reconsideration request within thirty (30) days of receipt. v. Any decision of the Special Master is final and binding, and will be considered under the California Arbitration Act, Code of Civil Procedure section 1280 et seq. as a final arbitration award. Nothing in this agreement is intended to expand the scope of judicial review of the final award for errors of fact or law, and the Parties agree that they may only seek to vacate the award if clear and convincing evidence demonstrates one of the factors set forth in Code of Civil Procedure, section 1286.2, subdivision (a). Plaintiff Subdivisions will have fourteen (14) days after all final awards are made, together with any final determination of a request for reconsideration, to seek review in the Superior Court of California, pursuant to Code of Civil Procedure, section 1285, where the State has filed its Consent Judgment. 2 vi. The Special Master will prepare a report of Costs that includes his or her fees and expenses at least ninety (90) days before the Payment Date for each Annual Payment. The Special Master’s preparation of a report of Costs does not discharge a Plaintiff Subdivision’s reporting requirement under Section VIII.C of the Teva Settlement Agreement.
vii. A member of the Plaintiff Subdivision Committee, which is a CA Participating Subdivision, will submit to the Settlement Fund Administrator and Teva a report of the fees and expenses incurred by the Special Master pursuant to Section VIII.C of the Teva Settlement Agreement.
c) Claims Priority and Limitation.
i. The Special Master will submit invoices for compensation of reasonable fees and expenses to the Plaintiff Subdivision Committee no later than ninety (90) days prior to the Payment Date for each Annual Payment. The Plaintiff Subdivision Committee will promptly review and, if reasonable, approve the Special Master’s invoice for compensation. The Plaintiff Subdivision Committee will submit approved invoices to the Settlement Fund Administrator for payment. The Special Master’s approved invoices have priority and will be paid first from the CA Subdivision Fund before any award of Costs, subject to the limitation in Section 2.c.v below. ii. Final Awards of Costs that do not exceed seventy-five thousand dollars ($75,000.00) will be paid next in priority after the Special Master’s approved invoices.
iii. Final Awards of Costs in excess of seventy-five thousand dollars ($75,000.00) will be paid proportionally from the funds remaining in that year’s Annual Payment. iv. Any claim for Costs that is not paid in full will be allocated against the next year’s distribution from the CA Subdivision Fund, until all approved claims for Costs are paid in full.
v. In no event will more than 50% of the total CA Subdivision Fund received in any year be used to pay Costs or the Special Master’s approved invoices. vi. In no event shall more than $28 million of the total CA Subdivision Funds paid pursuant to the Teva Settlement Agreement, Allergan Settlement Agreement, Distributor Settlement Agreement, CVS Settlement Agreement, Janssen Settlement Agreement, Walgreens Settlement Agreement, and the Walmart Settlement Agreement be used to pay Costs.
d) Collateral Source Payments and Third-Party Settlement. i. In the event a Plaintiff Subdivision is awarded compensation, in whole or in part, by any source of funds created as a result of litigation against an Opioid Defendant for 3 its reasonable Costs, it will reduce its claim for Costs from the CA Subdivision Fund by that amount. If a Plaintiff Subdivision has already received a final award of Costs from the CA Subdivision Fund, it will repay the fund up to the prior award of Costs via a payment to the Settlement Fund Administrator or notify the Settlement Fund Administrator that its allocation from the next and subsequent Annual Payments should be reduced accordingly. If the Plaintiff Subdivision is repaying any prior award of Costs, that repayment will occur as soon as is feasible after the Plaintiff Subdivision’s receipt of Cost funds from the collateral source, but no more than 90 days after its receipt from the collateral source. The Settlement Fund Administrator will add any repaid Costs to the CA Subdivision Fund. Any Plaintiff Subdivision that has submitted for reimbursement to any national fund and has not received a final determination by the First Claims Date may request that the settlement administrator withhold some or all of its payment from the CA Subdivision Fund in order to avoid repayment.
ii. In the event a Plaintiff Subdivision reaches a monetary settlement or compromise against any Opioid Defendant outside of the National Opioid Settlement, the monetary portion of such settlement, net of fees paid to outside contingency fee counsel and of funds earmarked strictly for abatement, will be credited against its Costs and the subdivision will be ineligible to recover those credited Costs from the CA Subdivision Fund. Plaintiff Subdivisions negotiating monetary settlements or compromises against any Opioid Defendant outside of the National Opioid Settlement will negotiate for funds to repay any Costs it previously received from the CA Subdivision Fund or for Costs it otherwise might be eligible to claim from the CA Subdivision Fund. If such a settlement is paid after all final approved claims for Costs by all Plaintiff Subdivisions are satisfied in full, the settling subdivision will reimburse the CA Subdivision Fund in that amount by making payment to the Settlement Fund Administrator to add to the CA Subdivision Fund in a manner consistent with the repayments described in section 2.d.i above. 4 APPENDIX 3
CALIFORNIA-SUBDIVISION BACKSTOP AGREEMENT
On August 6, 2021, Judge Polster of the US District Court for the Northern District of Ohio issued an Order (the Order), docket number 3814, in In Re National Prescription Opiate Litigation, MDL 2804, addressing contingent attorney fee contracts between political subdivisions eligible to participate in the Teva Settlement and their counsel.
In light of the Order, and at the request of [SUBDIVISION], the [SUBDIVISION], its counsel [COUNSEL], and the California Attorney General, on behalf of the State of California, are entering into this California-Subdivision Backstop Agreement (Backstop Agreement). [SUBDIVISION] and [COUNSEL] intend this Backstop Agreement to constitute a State BackStop Agreement as that term is used in the Order and in Exhibit R (Agreement on Attorneys’ Fees, Costs, and Expenses) of the Teva Settlement Agreement.
Pursuant to this Backstop Agreement, [SUBDIVISION] may, subject to the limitations of the Teva Settlement Agreement and CA Teva Allocation Agreement, as well as any other limitations imposed by law, use funds that it receives from the Teva Settlement CA Subdivision Fund to pay a contingent fee to [COUNSEL]. Any such payment from [SUBDIVISION] to [COUNSEL], together with any contingency fees that [COUNSEL] may receive from the national Attorney Fee Fund, will not exceed a total contingency fee of [PERCENTAGE NOT TO EXCEED 15%] of the total gross recovery of [SUBDIVISION] from the Teva Settlement. [COUNSEL] certify that they first sought fees and costs from the Attorney Fee Fund created under the Teva Settlement Agreement before seeking or accepting payment under this backstop agreement. [COUNSEL] further certify that they are not seeking and will not accept payment under this backstop agreement of any litigation fees or costs that have been reimbursed through prior settlements or judgments.
The Attorney General is executing this agreement solely because the definition of “State BackStop Agreement” in Exhibit R of the Teva Settlement Agreement requires such agreements to be between “a Settling State” and private counsel for a participating subdivision. Neither the California Attorney General nor the State of California have any obligations under this Backstop Agreement, and this Backstop Agreement does not require the payment of any state funds to [SUBDIVISION], [COUNSEL], or any other party.
[DATE] [SUBDIVISION SIGNATURE BLOCK]
[DATE] [COUNSEL SIGNATURE BLOCK]
[DATE] [ATTORNEY GENERAL SIGNATURE BLOCK]
1 ATTACHMENT #3
1 February 8, 2023
ALLERGAN PUBLIC GLOBAL OPIOID SETTLEMENT AGREEMENT
I. Definitions............................................................................................................................2 II. Participation by States and Condition to Preliminary Agreement ..............................18 III. Cessation of Litigation Activities.....................................................................................19 IV. Injunctive Relief................................................................................................................20 V. Release................................................................................................................................20 VI. Monetary Relief Overview and Maximum Payments ...................................................25 VII. Annual Payments to Settlement Fund ............................................................................26 VIII. Allocation and Use of Settlement Funds.........................................................................38 IX. Participation by Subdivisions and Special Districts......................................................44 X. Condition to Effectiveness of Agreement and Filing of Consent Judgment................49 XI. Potential Payment Adjustments......................................................................................49 XII. Additional Restitution Amount .......................................................................................50 XIII. Plaintiffs’ Attorneys’ Fees and Costs..............................................................................51 XIV. Enforcement and Dispute Resolution .............................................................................51 XV. Judgment and Settlement Set-Off Related to Teva .......................................................57 XVI. Miscellaneous ....................................................................................................................58 2 February 8, 2023
ALLERGAN PUBLIC GLOBAL OPIOID SETTLEMENT AGREEMENT
Whereas, the Settling States, Participating Subdivisions, Participating Special Districts, and Allergan (as those terms are defined below) share a common desire to resolve disputes between them relating to opioid medications according to the terms set out in this agreement dated as of November 22, 2022 (the “Agreement”);
Whereas, the Parties, Participating Subdivisions, and Participating Special Districts agree and understand that upon satisfaction of the conditions set forth in Sections II and XI, this Agreement will be binding on the Settling States, Allergan, Participating Subdivisions, and Participating Special Districts;
Whereas, the Parties, Participating Subdivisions, and Participating Special Districts agree and understand that this Agreement will then be filed as part of Consent Judgments in the respective courts of each of the Settling States, pursuant to the terms set forth in Section III; Whereas, the Parties, Participating Subdivisions, and Participating Special Districts agree and understand that they shall at all times act in good faith to implement and execute their obligations under this Agreement and shall not act in any way to purposefully frustrate the right of any party to receive the benefits due under the Agreement; Whereas, the Parties, Participating Subdivisions, and Participating Special Districts to this Agreement now desire to avoid further expense and proceedings and to settle their disputes under the terms and conditions of this Agreement as set forth below; NOW, THEREFORE, IT IS HEREBY AGREED by and between the Parties, Participating Subdivisions, and Participating Special Districts by and through their respective counsel, as follows:
I. Definitions
Unless otherwise specified, the following definitions apply:
1. “Abatement Accounts Fund” means a component of the Settlement Fund described in subsection VIII.F.
2. “Additional Restitution Amount” means the amount available to Settling States listed in Exhibit M of $16,192,680.76.
3. “Affiliated Company(ies)” means (1) when used with respect to AbbVie Inc. (“AbbVie”) all of the entities listed in Exhibit J-1; (2) when used with respect to Allergan all of the entities listed in Exhibit J-2; and (3) additionally shall include other entities owned now or in the past either wholly or partially and either directly or indirectly by either AbbVie or Allergan and/or each of their respective past parents, but only to the extent those other entities played any role relating to Covered Conduct and/or Released Claims during the period when they were owned 3 February 8, 2023
either wholly or partially and either directly or indirectly by either AbbVie or Allergan and/or each of their respective past parents.
4. “Agreement” means this Allergan Public Global Opioid Settlement Agreement, inclusive of all exhibits.
5. “Alleged Harms” means the alleged past, present, and future financial or societal and related expenditures arising out of the alleged misuse and abuse of opioid products, non-exclusive examples of which are described in the documents listed on Exhibit A, that have allegedly arisen as a result of the physical and bodily injuries sustained by individuals suffering from opioid-related addiction, abuse, death, and other related diseases and disorders, and that have allegedly been caused by Allergan.
6. “Allergan” means Allergan Finance, LLC (f/k/a Actavis, Inc., which, in turn, was f/k/a/ Watson Pharmaceuticals, Inc.) and Allergan Limited (f/k/a Allergan plc, which, in turn, was f/k/a Actavis plc). Allergan does not include Teva Pharmaceuticals Industries Ltd. (“Teva Ltd.”), Teva Pharmaceuticals USA, Inc. (“Teva USA”), Cephalon, Inc. (“Cephalon”), Actavis LLC (f/k/a Actavis Inc.) (“Actavis LLC”), Watson Laboratories, Inc. (“Watson”), Actavis Pharma, Inc. (f/k/a Watson Pharma, Inc.) (“Actavis Pharma”), Actavis Elizabeth LLC (“Actavis Elizabeth”), Actavis Kadian LLC (“Actavis Kadian”), Actavis Laboratories FL, Inc. (f/k/a Watson Laboratories, Inc. - Florida) (“Actavis Labs FL”), Actavis Laboratories UT, Inc. (f/k/a Watson Laboratories, Inc. - Utah) (“Actavis Labs UT”), Actavis Mid Atlantic LLC (“Actavis Mid”), Actavis South Atlantic LLC (“Actavis South”), Actavis Totowa LLC (“Actavis Totowa”), or Anda, Inc. (“Anda”).
7. “Allocation Statute” means a state law that governs allocation, distribution, and/or use of some or all of the Settlement Fund amounts allocated to that State and/or its Subdivisions and/or its Special Districts. In addition to modifying the allocation, as set forth in subsection VIII.E.2, an Allocation Statute may, without limitation, contain a Statutory Trust, further restrict expenditure of funds, form an advisory committee, establish oversight and reporting requirements, or address other default provisions and other matters related to the funds. An Allocation Statute is not required to address all three (3) types of funds comprising the Settlement Fund or all default provisions.
8. “Annual Payment” means the total amount of the Net Abatement Amount payable into the Settlement Fund by Allergan on each Payment Date (including the Initial Year Payment), as calculated by the Settlement Fund Administrator pursuant to Section VII or agreed to pursuant to Section VII.B.6, which shall not exceed the maximum payment for any given year as set forth in Exhibit M. This term does not include the Additional Restitution Amount or amounts paid pursuant to Section XIII.
9. “Appropriate Official” means the official defined in subsection XVI.F.4. 4 February 8, 2023
10. “Attorney Fee and Cost Payment” means the total amount of the Global Settlement Attorney Fee Amount payable by Allergan on the Payment Date of each year into the (1) Attorney Fee and Cost Fund described in Exhibit R, (2) the State Cost Fund described in Exhibit T, and (3) the State Outside Counsel Fee Fund described in Exhibit S, for attorneys’ fees, expenses, and costs of the Settling States and Participating Subdivisions.
11. “Attorney Fee and Cost Fund” means an account consisting of $187,115,422.10 to pay attorneys’ fees and costs of Litigating Subdivisions that become Participating Subdivisions and the MDL Expense Fund, amounts pursuant to the agreement on attorneys’ fees and costs attached as Exhibit R.
12. “Bar” means either (1) a ruling by the highest court of the State, or the intermediate court of appeals when not subject to further review by the highest court of the State in a State with a single intermediate court of appeals, setting forth the general principle that no Subdivisions or Special Districts in the State may maintain Released Claims against Released Entities, whether on the ground of the Agreement (or the release in it) or otherwise; (2) a law barring Subdivisions and Special Districts in the State from maintaining or asserting Released Claims against Released Entities (either through a direct bar or through a grant of authority to release claims and that authority is exercised in full); or (3) a Settlement Class Resolution in the State with full force and effect. For the avoidance of doubt, a law or ruling that is conditioned or predicated upon payment by a Released Entity (apart from payments by Allergan incurred under the Agreement) shall not constitute a Bar.
13. “Base Payment” means the payments made pursuant to Section VII.D.
14. “Case-Specific Resolution” means either (1) a law barring specified Subdivisions or Special Districts from maintaining Released Claims against Released Entities (either through a direct Bar or through a grant of authority to release claims and that authority is exercised in full) or (2) a ruling by a court of competent jurisdiction over a particular Subdivision or Special District that has the legal effect of barring the Subdivision or Special District from maintaining any Released Claims at issue against Released Entities, whether on the ground of the Agreement (or the release in it) or otherwise. For the avoidance of doubt, a law, ruling, or release that is conditioned or predicated upon a post-Effective Date payment by a Released Entity (apart from payments by Allergan incurred under the Agreement or injunctive relief obligations incurred by it) shall not constitute a Case-Specific Resolution.
15. “Claim” means any past, present or future cause of action, claim for relief, crossclaim or counterclaim, theory of liability, demand, derivative, claim, request, assessment, charge, covenant, damage, debt, lien, loss, fine, penalty, restitution, reimbursement, disgorgement, expenses, judgment, right, obligation, dispute, suit, contract, controversy, agreement, parens patriae claim, promise, performance, warranty, omission, or grievance of any nature whatsoever, whether legal, equitable, statutory, regulatory or administrative, whether arising under federal, 5 February 8, 2023
state or local common law, statute, regulation, guidance, ordinance or principles of equity, whether filed or unfiled, whether asserted or unasserted, whether known or unknown, whether accrued or unaccrued, whether foreseen, unforeseen or unforeseeable, whether discovered or undiscovered, whether suspected or unsuspected, whether fixed or contingent, and whether existing or hereafter arising, in all such cases, including but not limited to any request for declaratory, injunctive, or equitable relief, compensatory, punitive, or statutory damages, absolute liability, strict liability, restitution, subrogation, contribution, indemnity, apportionment, disgorgement, reimbursement, attorney fees, expert fees, consultant fees, fines, penalties, expenses, costs or any other legal, equitable, civil, administrative, or regulatory remedy whatsoever. Claim does not include any individuals’ personal injury or wrongful death cause of action.
16. “Claim Over” means a Claim asserted by a Non-Released Entity against a Released Entity on the basis of contribution, indemnity, or other claim over on any theory relating to a Non-Party Covered Conduct Claim asserted by a Releasor.
17. “Compensatory Restitution Amount” means the aggregate amount of payments by Allergan hereunder other than amounts paid as attorneys’ fees and costs or identified pursuant to subsection VIII.C as being used to pay attorneys’ fees and investigation costs or litigation costs.
18. “Consent Judgment” means a state-specific consent judgment, the general terms of which shall be agreed by the Settling States and Allergan prior to the Reference Date and shall include (1) approval of this Agreement and (2) the release set forth in Section V, including the full and final resolution of any Released Claims that the Settling State has brought against Released Entities.
19. “Court” means the respective court for each Settling State to which the Agreement and the Consent Judgment are presented for approval and/or entry as to that Settling State, or the Northern District of Ohio for purposes of administering the Attorney Fee and Cost Fund and any related fee and cost agreements.
20. “Covered Conduct” means any actual or alleged act, failure to act, negligence, statement, error, omission, breach of any duty, conduct, event, transaction, agreement, service, work, misstatement, misleading statement, or other activity of any kind whatsoever from the beginning of time through the Reference Date of this Agreement (and any past, present, or future consequence of any such act, failure to act, negligence, statement, error, omission, breach of duty, conduct, event, transaction, agreement, service, work, misstatement, misleading statement, or other activity) arising from or relating in any way to (a) the availability, discovery, research, development, manufacture, packaging, repackaging, marketing, promotion, advertising, labeling, relabeling, recall, withdrawal, distribution, delivery, monitoring, reporting, supply, sale, prescribing, dispensing, physical security, warehousing, use or abuse of, or operating procedures relating to, any Product, or any system, plan, policy, procedure, or advocacy relating to any Product or class of Products, including, but not limited to, any unbranded or branded 6 February 8, 2023
promotion, marketing, or advertising, unbranded information, patient support or assistance, educational programs, consultancy, research, or other programs, campaigns, lobbying, or grants, sponsorships, charitable donations, or other funding relating to any Product or class of Products; (b) the characteristics, properties, risks, or benefits of any Product or class of Products; (c) the monitoring, reporting, disclosure, non-monitoring, non-reporting, or non-disclosure to federal, state, or other regulators of orders for any Product or class of Products; (d) the selective breeding, harvesting, extracting, purifying, exporting, importing, applying for quota for, procuring quota for, handling, promoting, manufacturing, processing, packaging, supplying, distributing, converting, or selling of, or otherwise engaging in any activity relating to, a precursor or component of Product, including but not limited to natural, synthetic, semi-synthetic, or chemical raw materials, starting materials, finished active pharmaceutical ingredients, drug substances, or any related intermediate of Product; and/or (e) diversion control programs or suspicious order monitoring related to any Product. The foregoing is not intended to apply to claims alleging contamination of products.
21. “Covered Special Districts” means a Special District that is (1) a school district with K-12 student enrollment of at least 25,000 or 0.12% of a State’s population, whichever is greater; (2) a fire district that covers a population of 25,000, or 0.20% of a State’s population if a State’s population is greater than 18 million (though, if a fire district’s population is not easily calculable from state data sources and agreed to between the State and Allergan, it is calculated by dividing the population of the county or counties a fire district serves by the number of fire districts in the county or counties); or (3) a healthcare district or hospital district with at least 125 hospital beds in one or more hospitals rendering services in that district.
22. “Designated State” means Illinois.
23. “Divested Actavis Generic Entity(ies)” means Actavis LLC, Watson, Actavis Pharma, Actavis Elizabeth, Actavis Kadian, Actavis Labs FL, Actavis Labs UT, Actavis Mid, Actavis South, and Actavis Totowa.
24. “Divested Entity(ies)” means those companies listed on Exhibit J-3, which includes the Divested Actavis Generic Entities.
25. “Effective Date” means the date sixty (60) days after the Reference Date.
26. “Eligible State” means a State that is not a Prior Settling State and is thus eligible to participate in this Agreement and become a Settling State.
27. “Enforcement Committee” means a committee consisting of representatives of the Settling States and of the Participating Subdivisions. Exhibit B contains the organizational bylaws of the Enforcement Committee. Notice pursuant to subsection XVI.P shall be provided when there are changes in membership or contact information.
7 February 8, 2023
28. “Exhibit G Participant” means a Participating Subdivision or Participating Special District that appears in Exhibit G at the relevant point in time. Nothing about the use of the term Exhibit G Participant changes the ability to amend the list of entities listed on Exhibit G pursuant to this Agreement.
29. “Global Settlement Abatement Amount” means the total abatement amount of $2,149,873,027.00. (This figure does not reflect the application of the Prior Settlements Credit or potential offsets. It also does not include amounts paid to the Additional Restitution Amount, which may be used for abatement.)
30. “Global Settlement Amount” means $2,372,972,184.12 and consists of the Global Settlement Abatement Amount, the Global Settlement Attorney Fee Amount, and the Additional Restitution Amount.
31. “Global Settlement Attorney Fee Amount” means $206,906,476.36, which consists of the Attorney Fee and Cost Fund, the State Outside Counsel Fee Fund, and the State Cost Fund.
32. “Implementation Administrator” means the vendor agreed to by the Parties and retained by Teva and Allergan to provide notice pursuant to Section X.A and to manage the initial joinder period for Subdivisions and Special Districts, including the issuance and receipt of Settlement Participation Forms.
33. “Implementation Costs” means the costs for the Implementation Administrator, which shall be paid for pursuant to subsection VI.D.
34. “Incentive A” means the incentive payment described in subsection VII.E.5.
35. “Incentive B” means the incentive payment described in subsection VII.E.6.
36. “Incentive C” means the incentive payment described in subsection VII.E.7.
37. “Incentive D” means the incentive payment described in subsection VII.E.8.
38. “Incentive Payment” means the payments made pursuant to Section VII.E.
39. “Initial Participating Special District” means a Special District that meets the requirements set forth in subsection IX.L.
40. “Initial Participating Subdivision” means a Subdivision that meets the requirements set forth in subsection IX.D.
41. “Initial Participation Date” means the date ninety (90) days after the Preliminary Agreement Date, unless it is extended by written agreement of Allergan and the Enforcement Committee.
42. “Initial Year Payment” means the first Annual Payment of the Net Abatement Amount payable into the Settlement Fund by Allergan on the Payment Date as 8 February 8, 2023
calculated by the Settlement Fund Administrator pursuant to Section VII or agreed to pursuant to Section VII.B.6, which shall not exceed the maximum payment for the Initial Year Payment as set forth in Exhibit M.
43. “Injunctive Relief Terms” means the terms described in Section IV and set forth in Exhibit P.
44. “Later Litigating Special District” means a Special District (or Special District official asserting the right of or for the Special District to recover for Alleged Harms to the Special District and/or the people thereof) that is not a Litigating Special District and that files a lawsuit bringing a Released Claim against a Released Entity, or that adds such a Claim to a pre-existing lawsuit, after the Preliminary Agreement Date. It may also include a Litigating Special District whose Claims were resolved by a Bar or Case-Specific Resolution, which is later revoked following the execution date of this Agreement, when such Litigating Special District takes any affirmative step in its lawsuit other than seeking a stay, removal or dismissal with prejudice.
45. “Later Litigating Subdivision” means a Subdivision (or Subdivision official asserting the right of or for the Subdivision to recover for Alleged Harms to the Subdivision and/or the people thereof) that is not a Litigating Subdivision and that files a lawsuit bringing a Released Claim against a Released Entity, or that adds such a Claim to a pre-existing lawsuit, after the Preliminary Agreement Date. It may also include a Litigating Subdivision whose Claims were resolved by a Bar or Case-Specific Resolution, which is later revoked following the execution date of this Agreement, when such Litigating Subdivision takes any affirmative step in its lawsuit other than seeking a stay, removal, or dismissal with prejudice.
46. “Later Participating Special District” means a Participating Special District that meets the requirements of subsection IX.M but is not an Initial Participating Special District.
47. “Later Participating Subdivision” means a Participating Subdivision that meets the requirements of subsection IX.E but is not an Initial Participating Subdivision.
48. “Litigating Special District” means a Special District (or Special District official asserting the right of or for the Special District to recover for Alleged Harms to the Special District and/or the people thereof) that brought any Released Claims against any Released Entities on or before the Preliminary Agreement Date that were not separately resolved prior to that date. Exhibit C includes an agreed list of the Litigating Special Districts. Exhibit C will be updated (including with any corrections) periodically, and a final version of Exhibit C will be attached hereto as of the Effective Date.
49. “Litigating Subdivision” means a Subdivision (or Subdivision official asserting the right of or for the Subdivision to recover for Alleged Harms to the Subdivision and/or the people thereof) that brought any Released Claims against any Released 9 February 8, 2023
Entities on or before the Preliminary Agreement Date that were not separately resolved prior to that date. A Prior Settling Subdivision shall not be considered a Litigating Subdivision. Exhibit C includes an agreed list of the Litigating Subdivisions. Exhibit C will be updated (including with any corrections) periodically, and a final version of Exhibit C will be attached hereto as of the Effective Date.
50. “National Arbitration Panel” means the panel described in subsection XIV.G.4.
51. “National Disputes” means the disputes described in subsection XIV.G.
52. “Net Abatement Amount” means $1,799,186,751.00, which is the Global Settlement Abatement Amount adjusted for the Prior Settlements Credit pursuant to subsection VI.C.2.
53. “Non-Litigating Covered Special District” means a Covered Special District that is not a Litigating Special District.
54. “Non-Litigating Special District” means a Special District that is neither a Litigating Special District nor a Later Litigating Special District.
55. “Non-Litigating Subdivision” means a Subdivision that is not (1) a Litigating Subdivision, (2) a Later Litigating Subdivision, or (3) a Prior Settling Subdivision.
56. “Non-Participating Special District” means a Special District that is not a Participating Special District.
57. “Non-Participating Subdivision” means a Subdivision that is not a Participating Subdivision. For the avoidance of doubt, Non-Participating Subdivision also includes Prior Settling Subdivisions.
58. “Non-Party Covered Conduct Claim” means a Claim against any Non-Released Entity involving, arising out of, or related to Covered Conduct (or conduct that would be Covered Conduct if engaged in by a Released Entity).
59. “Non-Party Settlement” means a settlement by any Releasor that settles any NonParty Covered Conduct Claim and includes a release of any Non-Released Entity.
60. “Non-Released Entity” means an entity that is not a Released Entity.
61. “Non-Settling State” means a State that is an Eligible State but not a Settling State.
62. “Opioid Remediation” means care, treatment, and other programs and expenditures (including reimbursement for past such programs or expenditures except where this Agreement restricts the use of funds solely to future Opioid Remediation) designed to (1) address the misuse and abuse of opioid products, (2) treat or mitigate opioid use or related disorders, or (3) mitigate other alleged effects of the opioid abuse crisis, including on those injured as a result of the opioid abuse crisis. Exhibit E 10 February 8, 2023
provides a non-exhaustive list of expenditures that qualify as being paid for Opioid Remediation. Qualifying expenditures may include reasonable related administrative expenses.
63. “Participating Special District” means a Special District that signs the Settlement Participation Form annexed hereto as Exhibit K and meets the requirements for becoming a Participating Special District under Section IX. Participating Special Districts include both Initial Participating Special Districts and Later Participating Special Districts.
64. “Participating Subdivision” means a Subdivision that signs a Settlement Participation Form annexed hereto as Exhibit K and meets requirements for becoming a Participating Subdivision under Section IX. Participating Subdivisions include both Initial Participating Subdivisions and Later Participating Subdivisions.
65. “Parties” means Allergan and the Settling States (each, a “Party”).
66. “Payment Date” means the date on which Allergan makes its Annual Payments (including its Initial Year Payment), Additional Restitution Payments, and Attorney Fee and Cost Payments, pursuant to Section VII and XIII and Exhibits M-1 and M2. The first Payment Date is thirty (30) days after the Effective Date. The second Payment Date is July 15, 2024, the third Payment Date is July 15, 2025, the fourth Payment Date is July 15, 2026, the fifth Payment Date is July 15, 2027, the sixth Payment Date is July 15, 2028, and the seventh Payment Date is July 15, 2029.
67. “Payment Year” means the calendar year during which the applicable Annual Payment is due pursuant to subsection VII.B. Payment Year 1 is 2023, Payment Year 2 is 2024, and so forth. References to payment “for a Payment Year” mean the Annual Payment due that year. References to eligibility “for a Payment Year” mean eligibility in connection with the Annual Payment due during that year.
68. “Preliminary Agreement Date” means the date on which Allergan gives notice to the Settling States and MDL Plaintiffs’ Executive Committee of its determination that a sufficient number of States have agreed to be Settling States to proceed with notice pursuant to Section IX.A. This date shall be no more than fourteen (14) days after the end of the notice period to States (as set forth in Section II.A) unless it is extended by written agreement of Allergan and the Enforcement Committee.
69. “Primary Subdivision” means a Subdivision that has a population of 30,000 or more. A list of Primary Subdivisions in each State is provided in Exhibit I, and such list shall be updated if any Primary Subdivision is inadvertently missed or included.
70. “Prior Settlements Credit” means the credit of $350,686,276.00, reflecting that the allocations for Prior Settling States and Prior Settling Subdivisions for Claims related to the Covered Conduct against Allergan and/or other Released Entities were or will be separately settled. The credit is applied pursuant to subsection VI.A.1.
11 February 8, 2023
71. “Prior Settling State(s)” means Florida, Louisiana, New York, Rhode Island, and West Virginia and all Subdivisions and Special Districts within those States whose Claims were released as part of those States’ settlements.
72. “Prior Settling Subdivision(s)” means the City and County of San Francisco, California, Cuyahoga County, Ohio, and Summit County, Ohio.
73. “Product” means any chemical substance, whether used for medicinal or nonmedicinal purposes, and whether natural, synthetic, or semi-synthetic, or any finished pharmaceutical product made from or with such substance, that is an opioid or opiate, as well as any product containing any such substance. It also includes: 1) the following when used in combination with opioids or opiates: benzodiazepine, carisoprodol, zolpidem, gabapentin, diazepam, estazolam, quazepam, alprazolam, clonazepam, oxazepam, flurazepam, triozolam, temazepam, midazolam; and 2) a combination or “cocktail” of any stimulant or other chemical substance prescribed, sold, bought, or dispensed to be used together that includes opioids or opiates. For the avoidance of doubt, “Product” does not include benzodiazepine, carisoprodol, zolpidem, or gabapentin when not used in combination with opioids or opiates. “Product” includes but is not limited to any substance consisting of or containing buprenorphine, codeine, fentanyl, hydrocodone, hydromorphone, meperidine, methadone, morphine, naloxone, naltrexone, oxycodone, oxymorphone, pentazocine, propoxyphene, tapentadol, tramadol, opium, heroin, carfentanil, any variant of these substances, or any similar substance. “Product” also includes any natural, synthetic, semi-synthetic or chemical raw materials, starting materials, finished active pharmaceutical ingredients, drug substances, and any related intermediate products used or created in the manufacturing process for any of the substances described in the preceding sentence. Further, “Product(s)” includes, but is not limited to, the following: (a) Anexsia, Bancap HC, Combunox, Dilaudid, Dilaudid HP, Duradyne, Esgic with Codeine, Fiorinal with Codeine, Fioricet with Codeine, Kadian, Lorcet, Lorcet Plus, Maxidone, MoxDuo, Norco, Procet, Reprexain, Vicodin, Vicodin ES, Vicodin HP, and Vicoprofen, and any type, version, strength, or dosage of the foregoing; and (b) Aspirin + butalbital + caffeine + codeine phosphate, Fentanyl citrate injection, Fentanyl citrate tablet, Fentanyl transdermal, Homatropine methylbromide + hydrocodone bitartrate, Hydrocodone + acetaminophen, Hydrocodone + ibuprofen, Hydromorphone tablet, Meperidine hydrochloride injection, Meperidine hydrochloride tablet, Morphine sulfate capsule, Morphine sulfate injection, Morphine sulfate tablet, Oxycodone, Oxycodone + acetaminophen, Oxycodone + aspirin, Oxycodone + hydrochloride, Oxycodone + ibuprofen, Oxymorphone tablet, Tramadol hydrocholoride, and any type, version, strength, or dosage of the foregoing.
74. “Reference Date” means the date on which Allergan is to inform the Settling States and MDL Plaintiffs’ Executive Committee of its determination whether there is sufficient resolution of Claims and potential Claims at the Subdivision level to go forward with the settlement. The Reference Date shall be no later than thirty (30) days after the Initial Participation Date, unless it is extended by written agreement of Allergan and the Enforcement Committee.
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75. “Released Claims” means any and all Claims that directly or indirectly are based on, arise out of, or in any way relate to or concern the Covered Conduct occurring prior to the Reference Date. Without limiting the foregoing, “Released Claims” include any Claims that have been asserted against the Released Entities by any Settling State or any of its Litigating Subdivisions or Litigating Special Districts in any federal, state, or local action or proceeding (whether judicial, arbitral, or administrative) based on, relating to, in whole or in part, the Covered Conduct, or any such Claims that could be or could have been asserted now or in the future in those actions or in any comparable action or proceeding brought by a State or any of its Subdivisions or Special Districts or any Releasors (whether or not such State, Subdivision, Special District, or Releasor has brought such action or proceeding).
Released Claims also include all Claims against Released Entities asserted in any proceeding to be dismissed pursuant to the Agreement, whether or not such claims relate to Covered Conduct. “Released Claims” shall be interpreted broadly. This Agreement does not release Claims by private individuals. Claims by private individuals shall be treated in accordance with applicable law. Released Claims is also used herein to describe Claims brought by a Later Litigating Subdivision, Later Litigating Special District, or other non-party Subdivision or Special District that would have been Released Claims if they had been brought by a Releasor against a Released Entity before the Effective Date.
76. “Released Entities” means Allergan and (1) all of Allergan’s past and present direct or indirect parents, subsidiaries, divisions, joint ventures, predecessors, successors, affiliates, business units, assigns, agents (all of the foregoing solely in their capacity as such with respect to the Released Claims), and insurers (solely in their role as insurers, if any, with respect to the Released Claims), including, but not limited to, (a) AbbVie and (b) Divested Actavis Generic Entities and other Divested Entities (and their respective past and current parents, subsidiaries, and affiliates, including but not limited to Teva Ltd., Teva USA, and their subsidiaries and affiliates) but solely as to the branded opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and other Divested Entities and the operation of the Divested Actavis Generic Entities and other Divested Entities related to those branded opioid drugs that are Products before August 2, 2016; (2) any person or entity to the extent, and only to the extent, that such person or entity may have a Claim based on such person or entity having a business relationship with Allergan or AbbVie and/or any of Allergan or AbbVie’s Affiliated Companies, including, but not limited to, for contractual indemnity, equitable or implied indemnity, contribution, comparative fault, reimbursement, or apportionment (including, but not limited to, the respective past and present direct or indirect parents, subsidiaries, divisions, joint ventures, predecessors, successors, affiliates, business units, assigns, partners, manufacturers, contractors, agents, and insurers (all of the foregoing solely in their capacity as such with respect to the Released Claims) of any of the foregoing in (1), including Abbott Laboratories and Abbott Laboratories Inc. (“Abbott”), provided that, for avoidance of doubt, Abbott is not a Released Entity for purposes of Claims related to OxyContin, Purdue Pharma, or Purdue Pharma Inc.; and (ii) Halo Pharmaceuticals, Inc., Shionogi Inc., Mikart, LLC, PDI, Inc., TMS Health, LLC, National Health Information Network, 13 February 8, 2023
Inc., Ventiv Commercial Services, LLC, inVentiv Commercial Services, LLC, UPS Supply Chain Solutions, Inc., and King Pharmaceuticals, Inc., and their respective past and current parents, subsidiaries, and affiliates) against Allergan or AbbVie and/or any of Allergan or AbbVie’s Affiliated Companies relating to any Covered Conduct, Products, class of Products, and/or Released Claims arising from such business relationship; and (3) the respective past and present employees, officers, directors, members, shareholders, partners, trustees, contractors, consultants, and agents (all of the foregoing solely in their capacity as such with respect to the Released Claims) of any of the foregoing in (1) and (2). Notwithstanding the foregoing (and subject to certain provisions, including, but not limited to, the NonParty Settlement at Section V.B.2 and the Set-Off at Section XV below), Released Entities shall exclude Divested Actavis Generic Entities and other Divested Entities (and their respective past and current parents, subsidiaries, and affiliates, including but not limited to Teva Ltd., Teva USA, and their subsidiaries and affiliates, but not Allergan and other Released Entities), but solely as to: (i) their generic opioid drugs that are Products, and/or (ii) the operation of Divested Actavis Generic Entities and other Divested Entities related to those generic opioid drugs that are Products for which Releasors have also sought to hold Allergan (and/or other Released Entities) liable. For the avoidance of doubt, any entity acquired, or joint venture entered into by Allergan after the Reference date is not a Released Entity.
77. “Releasors” means (1) each Settling State; (2) each Participating Subdivision; (3) each Participating Special District; and (4) without limitation and to the maximum extent of the power of each Settling State’s Attorney General and/or Participating Subdivision and Participating Special District to release Claims, (a) the Settling State’s, Participating Subdivision’s, and Participating Special District’s departments, agencies, divisions, boards, commissions, Subdivisions, districts, instrumentalities of any kind and attorneys, including its Attorney General, and any person in their official capacity whether elected or appointed to serve any of the foregoing and any agency, person, or other entity claiming by or through any of the foregoing, (b) any public entities, public instrumentalities, public educational institutions, unincorporated districts, fire districts, irrigation districts, water districts, emergency services districts, school districts, healthcare districts, hospital districts, Sheriffs and law enforcement districts, library districts, coroner’s offices, and public transportation authorities, and other Special Districts in a Settling State, including those with the regulatory authority to enforce state and federal controlled substances acts or the authority to bring Claims related to Covered Conduct seeking money (including abatement (or remediation and/or restitution)) or revoke a pharmaceutical distribution license, and (c) any person or entity acting in a parens patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer, or other capacity seeking relief, including but not limited to, fines, penalties, or punitive damages, on behalf of or generally applicable to the general public with respect to a Settling State or a Subdivision or Special District in a Settling State, whether or not any of them participate in the Agreement. “Releasors” does not include persons acting in an individual capacity, regardless of the type of relief sought. In addition to being a Releasor as provided herein, Participating Subdivisions and Participating Special Districts shall also provide a Settlement 14 February 8, 2023
Participation Form, which is attached as Exhibit K. Each Settling State’s Attorney General represents that he or she has or has obtained (or will obtain no later than the Effective Date) the authority set forth in the Representation and Warranty subsection of Section V.
78. “Revocation Event” means with respect to a Bar, Settlement Class Resolution, or Case-Specific Resolution, a legislative amendment or a revocation, rescission, reversal, overruling, or interpretation that in any way limits the effect of such Bar, Settlement Class Resolution, or Case-Specific Resolution on Released Claims or any other action or event that otherwise deprives the Bar, Settlement Class Resolution or Case-Specific Resolution of force or effect in any material respect.
79. “Settlement Class Resolution” means a class action resolution in a court of competent jurisdiction in a Settling State with respect to a class of Subdivisions and Special Districts in that State that (1) conforms with that Settling State’s statutes, case law, and/or rules of procedure regarding class actions; (2) is approved and entered as an order of a court of competent jurisdiction in that State and has become final as defined in “State-Specific Finality”; (3) is binding on all Non-Participating Subdivisions and Non-Participating Special Districts in that State (other than opt outs as permitted under the next sentence); (4) provides that all such NonParticipating Subdivisions or Non-Participating Special Districts may not bring Released Claims against Released Entities, whether on the ground of the Agreement (or the releases herein) or otherwise; and (5) does not impose any costs or obligations on Allergan other than those provided for in the Agreement, or contain any provision inconsistent with any provision of the Agreement. If applicable state law requires that opt-out rights be afforded to members of the class, a class action resolution otherwise meeting the foregoing requirements shall qualify as a Settlement Class Resolution unless Subdivisions collectively representing more than 1% of the total population of all of that State’s Subdivisions listed in Exhibit G opt out. In seeking certification of any Settlement Class, the applicable State and Participating Subdivisions shall make clear that certification is sought solely for settlement purposes and shall have no applicability beyond approval of the settlement for which certification is sought. Nothing in this Agreement constitutes an admission by any Party that class certification would be appropriate for litigation purposes in any case.
80. “Settlement Fund” means the interest-bearing fund established under the Agreement into which Annual Payments by Allergan are made pursuant to subsection VII. The Settlement Fund comprises the Abatement Accounts Fund, State Fund, and Subdivision Fund.
81. “Settlement Fund Administrator” means the entity that determines the Annual Payments (including calculating Incentive Payments pursuant to Section VII and any amounts subject to offset pursuant to Sections VII.C and XI), and administers and distributes amounts into the Settlement Fund. It shall also administer and distribute the Additional Restitution Amount pursuant to Section XII. The duties of the Settlement Fund Administrator shall be governed by this Agreement. Prior to 15 February 8, 2023
the Initial Participation Date, the Parties shall agree to selection and removal processes for and a detailed description of the Settlement Fund Administrator’s duties all of which shall be appended to the Agreement as Exhibit L.
82. “Settlement Fund Administrator Costs” means any costs and fees associated with or arising out of the duties of the Settlement Fund Administrator with regard to Teva and Allergan’s payments to the Settlement Fund as described in Exhibit L and elsewhere in this Agreement, including those arising from the use of a bank or other financial institution to receive and disburse payments.
83. “Settlement Fund Escrow” means the interest-bearing escrow fund established pursuant to this Agreement to hold disputed payments made under this Agreement.
84. “Settlement Participation Form” means the form attached as Exhibit K that Participating Subdivisions and Participating Special Districts must execute and provide to Allergan and the Implementation Administrator or Settlement Fund Administrator, and which shall (1) make such Participating Subdivisions and Participating Special Districts signatories to this Agreement, (2) include a full and complete release of any and all of such Participating Subdivisions’ and Participating Special Districts’ Claims and (3) require prompt cessation of litigation activity as set forth in Section III, and request for dismissal with prejudice of any Released Claims that have been filed against Released Entities by any such Participating Subdivisions or Participating Special Districts within fourteen (14) business days after the Reference Date.
85. “Settlement Payment Schedule” means the schedule of payments attached to this Agreement as Exhibit M. Actual payment amounts are subject to adjustments consistent with this Agreement.
86. “Settling State” means any Eligible State that has entered into this Agreement.
87. “Special District” means (1) formal and legally recognized sub-entities of a State recognized by the U.S. Census Bureau1and those listed on Exhibit C; and (2) any person, official, or entity thereof acting in an official capacity on behalf of the Special District. Special Districts do not include sub-entities of a State that provide general governance for a defined area that would qualify as a Subdivision. Entities that include any of the following words or phrases in its name shall not be considered a Special District: mosquito, pest, insect, spray, vector, animal, air quality, air pollution, clean air, coastal water, tuberculosis, and sanitary.
88. “State” means any state of the United States of America, the District of Columbia, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S.
Virgin Islands. Additionally, the use of non-capitalized “state” to describe 1 All such entities are found on the “Special District,” “School District,” and “DEP School District” tabs of the Census Bureau’s 2017 Government Units Listing spreadsheet available at https://www2.census.gov/programs-surveys/gus/datasets/2017/govt_units_2017.ZIP. 16 February 8, 2023
something (e.g., “state court”) shall also be read to include parallel entities in commonwealths, territories, and the District of Columbia (e.g., “territorial court”).
89. “State Allocation Percentage” means the allocation percentages for Eligible States as set forth in Exhibit F-2, which have been adjusted from the State Global Allocation Percentages to account for the Prior Settlements Credit.
90. “State Cost Fund” means the fund totaling $3,598,373.50 and described in Exhibit T.
91. “State Global Allocation Percentage” means the allocation percentages for all States as set forth in Exhibit F-1, which represents allocations before the Prior Settlements Credit is applied.
92. “State Fund” means a component of the Settlement Fund described in subsection VIII.D.
93. “State Outside Counsel Fee Fund” means the fund totaling $16,192,680.76 described in Exhibit S.
94. “State-Specific Finality” means, with respect to the Settling State in question:
a. the Agreement and the Consent Judgment have been approved and entered by the Court as to Allergan, including the release of all Released Claims against Released Entities as provided in this Agreement; b. for all lawsuits brought by the Settling State against Released Entities for Released Claims, either previously filed or filed as part of the entry of the Consent Judgment, the Court has stated in the Consent Judgment or otherwise entered an order finding that all Released Claims against Released Entities asserted in the lawsuit have been resolved by agreement; and
c. (1) the time for appeal or to seek review of or permission to appeal from the approval and entry as described in subsection (a) hereof and entry of such order described in subsection (b) hereof has expired; or (2) in the event of an appeal, the appeal has been dismissed or denied, or the approval and entry described in (a) hereof and the order described in subsection (b) hereof have been affirmed in all material respects (to the extent challenged in the appeal) by the court of last resort to which such appeal has been taken and such dismissal or affirmance has become no longer subject to further appeal (including, without limitation, review by the United States Supreme Court).
95. “State-Subdivision Agreement” means an agreement that a Settling State reaches with the Subdivisions in that State regarding the allocation, distribution, and/or use of funds allocated to that State and to Exhibit G Participants in that State. A StateSubdivision Agreement shall be effective if approved pursuant to the provisions of Exhibit O or if adopted by statute. Preexisting agreements addressing funds other 17 February 8, 2023
than those allocated pursuant to this Agreement shall qualify if the approval requirements of Exhibit O are met. A State and its Subdivisions may revise, supplement, or refine a State-Subdivision Agreement if approved pursuant to the provisions of Exhibit O or if adopted by statute.
96. “Statewide Payment Amount” means the amount from an Annual Payment to be paid to a Settling State, its separate types of funds (if applicable), and its Exhibit G Participants.
97. “Statutory Trust” means a trust fund established by state law to receive funds allocated to a State’s Abatement Accounts Fund and restrict their expenditure to Opioid Remediation purposes subject to reasonable administrative expenses. A State may give a Statutory Trust authority to allocate one or more of the three Settlement Funds, but this is not required.
98. “Subdivision” means (1) a formal and legally recognized sub-entity of a State that provide general governance for a defined area, such as a municipality, county, parish, city, town, incorporated township, village, borough, or any other entities that provide municipal-type government within a State, and (2) any person, official, or entity thereof acting in an official capacity on behalf of the Subdivision (including, without limitation, district attorneys, county attorneys, city attorneys, Sheriffs, and any other official, employee, or representative). Unless otherwise specified, “Subdivision” includes all functional counties and parishes and other functional levels of sub-entities of a State that provide general governance for a defined area. Historic, non-functioning sub-entities of a State (such as Connecticut counties) are not Subdivisions, unless the entity has filed a lawsuit that includes a Released Claim against a Released Entity in a direct, parens patriae, or any other capacity. For purposes of this Agreement, the term Subdivision does not include Special Districts.
99. “Subdivision and Special District Allocation Percentage” means for Subdivisions and Special Districts in a Settling State that are eligible to receive an allocation from the Subdivision Fund pursuant to subsection VIII.D or subsection VIII.E, the percentage as set forth in Exhibit G. The aggregate Subdivision and Special District Allocation Percentage of all Subdivisions and Special Districts receiving a Subdivision and Special District Allocation Percentage in each State shall equal 100%. Immediately upon the effectiveness of any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by subsection VIII.E.3 (or upon the effectiveness of an amendment to any StateSubdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by subsection VIII.E.3) that addresses allocation from the Subdivision Fund, whether before or after the Initial Participation Date, Exhibit G will automatically be amended to reflect the allocation from the Subdivision Fund pursuant to the State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by Section VIII.E.3. The Subdivision and Special District Allocation Percentages contained in Exhibit G may not change once notice is distributed pursuant to subsection X.A, except upon the effectiveness 18 February 8, 2023
of any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by subsection VIII.E.3 (or upon the effectiveness of an amendment to any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by subsection VIII.E.3) that addresses allocation from the Subdivision Fund. For the avoidance of doubt, no Subdivision or Special District not listed on Exhibit G shall receive an allocation from the Subdivision Fund and no provision of this Agreement shall be interpreted to create such an entitlement.
100. “Subdivision Fund” means a component of the Settlement Fund described in subsection VIII.A.
101. “Teva” means (i) Teva Pharmaceutical Industries Ltd. and, (ii) all of its respective past and present direct or indirect parents, subsidiaries, divisions, affiliates, joint ventures, predecessors, successors, assigns, including but not limited to the Divested Actavis Generic Entities and Anda Inc.
102. “Teva Global Opioid Settlement Agreement” means the settlement agreement between and among the Settling States, Participating Subdivisions, Participating Special Districts, and Teva to resolve opioid-related Claims against Teva and the other Released Entities (as defined therein).
103. “Threshold Motion” means a motion to dismiss or equivalent dispositive motion made at the outset of litigation under applicable procedure. A Threshold Motion must include as potential grounds for dismissal, any applicable Bar or the relevant release by a Settling State, Participating Subdivision, or Participating Special District provided under this Agreement and, where appropriate under applicable law, any applicable limitations defense.
II. Participation by States and Condition to Preliminary Agreement A. Notice to States. On November 22, 2022 this Agreement shall be distributed to all Eligible States. The Eligible States’ Attorneys General shall then have a period of thirty (30) days to decide whether to become Settling States. Eligible States will decide whether to become Settling States for both this Agreement and the Teva Global Opioid Settlement Agreement, or decline participation in both settlements. However, if Teva enters bankruptcy prior to the Effective Date, Eligible States can choose to only join this Agreement. If a State is only an Eligible State with respect to one of the Agreements, the State need only decide whether to become a Settling State with respect to the Agreement for which it is an Eligible State.
States that determine to become Settling States shall so notify the Enforcement Committee and Allergan within thirty (30) days after November 22, 2022 and shall further commit to obtaining any necessary additional State releases prior to the Effective Date. This notice 19 February 8, 2023
period for States may be extended by written agreement of Allergan and the Enforcement Committee.
B. Ineligible States. Non-Settling States and Prior Settling States shall not be eligible for any payments or have any rights in connection with this Agreement.
C. Condition to Preliminary Agreement. Following the notice period to Eligible States set forth in subsection II.A above, Allergan shall determine on or before the Preliminary Agreement Date whether, in its sole discretion enough States have agreed to become Settling States to proceed with notice to Subdivisions as set forth in Section X below. The determination to proceed shall be in the sole discretion of Allergan and may be based on any criteria or factors deemed relevant by Allergan. If Allergan determines that this condition has been satisfied, and that notice to the Subdivisions should proceed, it will so notify the Settling States by providing notice to the Enforcement Committee on the Preliminary Agreement Date. If Allergan determines that this condition has not been satisfied, it will so notify the Settling States by providing notice to the Enforcement Committee, and this Agreement will have no further effect and all releases and other commitments or obligations contained herein will be void, other than Allergan’s funding of Implementation Costs to date. The Preliminary Agreement Date may be extended by written agreement of Allergan and the Enforcement Committee.
D. Later Joinder by States. After the Preliminary Agreement Date, an Eligible State may only become a Settling State with the consent of Allergan, in its sole discretion. If a State becomes a Settling State more than thirty (30) days after the Preliminary Agreement Date, the Subdivisions and Special Districts in that State that become Participating Subdivisions and Participating Special Districts within ninety (90) days of the State becoming a Settling State shall be considered Initial Participating Subdivisions or Initial Participating Special Districts.
III. Cessation of Litigation Activities
A. Following the Preliminary Agreement Date, if Allergan has determined to proceed with notice pursuant to Section II, all Litigating States that intend to become Settling States and that are engaged in or have engaged in discovery and/or substantive motion practice (“Active Litigation”) against a Released Entity shall make reasonable efforts to immediately cease litigation activity (e.g., written and document discovery, depositions, expert disclosures, and motion practice) against Allergan where feasible, or to minimize litigation activity by means of agreed deadline extensions and agreed postponement of depositions, document productions, and motion practice. Allergan shall cooperate in such efforts. The obligations under this subsection do not extend past the Reference Date if Allergan determines it is not going forward with the Agreement. This paragraph III.A does not apply to Litigating States with a trial date within six (6) months of the Preliminary Agreement Date, though such Litigating States and Allergan shall engage in good faith discussions regarding the potential cessation of litigation activity.
B. Following the execution of the Settlement Participation Form, attached as Exhibit K, a Litigating Subdivision or Litigating Special District that is engaged in active litigation 20 February 8, 2023
against a Released Entity shall make all reasonable efforts to immediately cease all litigation activity (e.g., written and document discovery, depositions, expert disclosures, and motion practice) against Allergan, where feasible, or to minimize litigation activity by means of agreed deadline extensions and agreed postponement of litigation activity by means of agreed deadline extensions and agreed postponement of depositions, document productions, and motion practices. Allergan shall cooperate in such efforts. The obligations under this subsection do not extend past the Reference Date if Allergan determines it is not going forward with the settlement. This paragraph III.B does not apply to Litigating Subdivisions or Litigating Special Districts with a trial date within six (6) months of the Preliminary Agreement Date, though such Litigating Subdivisions or Litigating Special Districts and Allergan shall engage in good faith discussions regarding the potential cessation of litigation activity. Notwithstanding this provision no Litigating Subdivision is required to cease its litigation if it determines such action would be detrimental to its litigation.
C. Following the Reference Date, the Settling States shall endeavor to file Consent Judgments (the contents of which must be agreed upon with Allergan) within thirty (30) days of the Reference Date. Participating Subdivisions and Participating Special Districts, as applicable, shall request dismissal of their actions with prejudice within fourteen (14) days of the Reference Date. The Settling States, Participating Subdivisions, and Participating Special Districts shall use best efforts to get Consent Judgments or orders of dismissal with prejudice, as applicable, entered promptly after filing.
IV. Injunctive Relief
A. Entry of Injunctive Relief. As part of the Consent Judgment, the Parties agree to the Injunctive Relief Terms attached as Exhibit P.
V. Release
A. Scope. As of the Effective Date, the Released Entities will be released and forever discharged from all of the Releasors’ Released Claims. Each Settling State (for itself and its Releasors) and Participating Subdivision (for itself and its Releasors), and Participating Special District (for itself and its Releasors) will, on or before the Effective Date, absolutely, unconditionally, and irrevocably covenant not to bring, file, or claim, or to cause, assist in bringing, or permit to be brought, filed, or claimed, or to otherwise seek to establish liability for any Released Claims against any Released Entity in any forum whatsoever. The releases provided for in the Agreement are intended to be broad and shall be interpreted so as to give the Released Entities the broadest possible bar against any liability relating in any way to Released Claims and extend to the full extent of the power of each Settling State, its Attorney General, each Participating Subdivision, and each Participating Special District to release Claims. The release shall be a complete bar to any Released Claim of all Releasors. Nothing in this Agreement shall release or impair any Claims against Teva Ltd., Teva USA, Cephalon, or Anda, except to the extent expressly set forth in this Agreement.
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B. Claim Over and Non-Party Settlement.
1. Statement of Intent. It is the intent of the Parties that:
a. Released Entities should not seek contribution or indemnification (other than pursuant to an insurance contract) from other parties for their payment obligations under this Agreement;
b. the payments made under this Agreement shall be the sole payments made by the Released Entities to the Releasors involving, arising out of, or related to Covered Conduct (or conduct that would be Covered Conduct if engaged in by a Released Entity);
c. Claims by Releasors against non-Parties should not result in additional payments by Released Entities, whether through contribution, indemnification or any other means; and
d. the Settlement meets the requirements of the Uniform Contribution Among Joint Tortfeasors Act and any similar state law or doctrine that reduces or discharges a released party’s liability to any other parties. e. The provisions of this subsection V.B are intended to be implemented consistent with these principles. This Agreement and the releases and dismissals provided for herein are made in good faith.
2. Contribution/Indemnity Prohibited. No Released Entity shall seek to recover for amounts paid under this Agreement based on indemnification, contribution, or any other theory from a manufacturer, pharmacy, hospital, pharmacy benefit manager, health insurer, third-party vendor, trade association, distributor, or health care practitioner, provided that a Released Entity shall be relieved of this prohibition with respect to any entity that asserts a Claim Over against it. However, and notwithstanding the foregoing, this provision shall not preclude any Released Entity from seeking indemnification, contribution, or any other theory from and against Teva Ltd., Divested Entities, Pfizer Inc., King Pharmaceuticals, Inc., and Alpharma Inc., and/or each of their respective past and current parents, subsidiaries, and/or affiliates. For the avoidance of doubt, nothing herein shall prohibit a Released Entity from recovering amounts owed pursuant to insurance contracts.
3. Non-Party Settlement. To the extent that, on or after the Reference Date, any Releasor enters into a Non-Party Settlement, including in any bankruptcy case or through any plan of reorganization (whether individually or as a class of creditors), the Releasor will include (or in the case of a Non-Party Settlement made in connection with a bankruptcy case, will cause the debtor to include), unless prohibited from doing so under applicable law, in the Non-Party Settlement a prohibition on contribution or indemnity of any kind substantially equivalent to that required from Allergan in subsection V.B.2, or a release from such Non-Released Entity in favor of the Released Entities (in a form equivalent to the releases 22 February 8, 2023
contained in this Agreement) of any Claim Over. The obligation to obtain the prohibition and/or release required by this subsection is a material term of this Agreement. The sole remedy for a Releasor’s failure to include such a provision in a Non-Party Settlement shall be the application of Section V.B.4 below. NonReleased Entities include, but are not limited to, Teva Ltd., Teva USA, Divested Actavis Generic Entities or other Divested Entities, and Anda.
4. Claim Over. In the event that any Releasor obtains a judgment with respect to NonParty Covered Conduct against a Non-Released Entity that does not contain a prohibition like that in subsection V.B.3, or any Releasor files a Non-Party Covered Conduct Claim against a Non-Released Entity in bankruptcy or a Releasor is prevented for any reason from obtaining a prohibition/release in a Non-Party Settlement as provided in subsection V.B.3, and such Non-Released Entity asserts a Claim Over against a Released Entity, then Releasor and Allergan shall take the following actions to ensure that the Released Entities do not pay more with respect to Covered Conduct to Releasors or to Non-Released Entities than the amounts owed under this Agreement by Allergan:
a. Allergan shall notify that Releasor of the Claim Over within sixty (60) days of the assertion of the Claim Over or sixty (60) days of the Effective Date of this Agreement, whichever is later;
b. Allergan and that Releasor shall meet and confer concerning the means to hold Released Entities harmless and ensure that it is not required to pay more with respect to Covered Conduct than the amounts owed by Allergan under this Agreement;
c. That Releasor and Allergan shall take steps sufficient and permissible under the law of the State of the Releasor to hold Released Entities harmless from the Claim Over and ensure Released Entities are not required to pay more with respect to Covered Conduct than the amounts owed by Allergan under this Agreement. Such steps may include, where permissible:
(i) Filing of motions to dismiss or such other appropriate motion by Allergan or Released Entities, and supported by Releasors, in response to any Claim filed in litigation or arbitration; (ii) Reduction of that Releasor’s Claim and any judgment it has obtained or may obtain against such Non-Released Entity by whatever amount or percentage is necessary to extinguish such Claim Over under applicable law, up to the amount that Releasor has obtained, may obtain, or has authority to control from such Non-Released Entity;
(iii) Placement into escrow of funds paid by the Non-Released Entities such that those funds are available to satisfy the Claim Over; 23 February 8, 2023
(iv) Return of monies paid by Allergan to that Releasor under this Agreement to permit satisfaction of a judgment against or settlement with the Non-Released Entity to satisfy the Claim Over; (v) Payment of monies to Allergan by that Releasor to ensure it is held harmless from such Claim Over, up to the amount that Releasor has obtained, may obtain, or has authority to control from such NonReleased Entity; (vi) Credit to Allergan under this Agreement to reduce the overall amounts to be paid under the Agreement such that it is held harmless from the Claim Over; and
(vii) Such other actions as that Releasor and Allergan may devise to hold Allergan harmless from the Claim Over.
d. The actions of that Releasor and Allergan taken pursuant to paragraph (c) must, in combination, ensure Allergan is not required to pay more with respect to Covered Conduct than the amounts owed by Allergan under this Agreement.
e. In the event of any dispute over the sufficiency of the actions taken pursuant to paragraph (c), that Releasor and Allergan may seek review by the National Arbitration Panel, provided that, if the Parties agree, such dispute may be heard by the state court where the relevant Consent Judgment was filed. The National Arbitration Panel shall have authority to require Releasors to implement a remedy that includes one or more of the actions specified in paragraph (c) sufficient to hold Released Entities fully harmless. In the event that the panel’s actions do not result in Released Entities being held fully harmless, Allergan shall have a Claim for breach of this Agreement by Releasors, with the remedy being payment of sufficient funds to hold Allergan harmless from the Claim Over. For the avoidance of doubt, the prior sentence does not limit or eliminate any other remedy that Allergan may have.
C. To the extent that the Claim Over is based on a contractual indemnity, the obligations under subsection V.B.4 shall extend solely to a Non-Party Covered Conduct Claim against a pharmacy, clinic, hospital or other purchaser or dispenser of Products, a manufacturer that sold or promoted Products, a consultant, and/or a pharmacy benefit manager or other thirdparty payor. Allergan shall notify the Settling States, to the extent permitted by applicable law, in the event that any of these types of Non-Released Entities asserts a Claim Over arising out of contractual indemnity against it.
D. General Release. In connection with the releases provided for in the Agreement, each Settling State (for itself and its Releasors), Participating Subdivision and Participating Special District expressly waives, releases, and forever discharges any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States or 24 February 8, 2023
other jurisdiction, or principle of common law, which is similar, comparable, or equivalent to § 1542 of the California Civil Code, which reads:
General Release; extent. A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.
A Releasor may thereafter discover facts other than or different from those which it knows, believes, or assumes to be true with respect to the Released Claims, but each Settling State (for itself and its Releasors), Participating Subdivision and Participating Special District hereby expressly waives and fully, finally, and forever settles, releases, and discharges, upon the Effective Date, any and all Released Claims that may exist as of such date but which Releasors do not know or suspect to exist, whether through ignorance, oversight, error, negligence or through no fault whatsoever, and which, if known, would materially affect the Settling States’ decision to enter into the Agreement, the Participating Subdivisions’ decision to participate in the Agreement, or the Participating Special District’s decision to participate in the Agreement.
E. Res Judicata. Nothing in the Agreement shall be deemed to reduce the scope of the res judicata or claim preclusive effect that the settlement memorialized in the Agreement, and/or any Consent Judgment or other judgment entered on the Agreement, gives rise to under applicable law.
F. Representation and Warranty. The signatories hereto on behalf of their respective Settling State, its Participating Subdivisions, and its Participating Special Districts, expressly represent and warrant that they will obtain on or before the Effective Date (or have obtained) the authority to settle and release, to the maximum extent of the State’s power, all Released Claims of (1) their respective Settling State; (2) any of the Settling State’s past and present executive departments, state agencies, divisions, boards, commissions and instrumentalities with the regulatory authority to enforce state and federal controlled substances acts; (3) any of their respective Settling State’s past and present executive departments, agencies, divisions, boards, commissions and instrumentalities that have the authority to bring Claims related to Covered Conduct seeking money (including abatement and/or remediation) or revocation of a pharmaceutical distribution license; (4) any Participating Subdivisions; and (5) any Participating Special District. For the purposes of clause (3) above, executive departments, agencies, divisions, boards, commissions, and instrumentalities are those that are under the executive authority or direct control of the State’s Governor. Also, for the purposes of clause (3), a release from a State’s Governor is sufficient to demonstrate that the appropriate releases have been obtained.
G. Effectiveness. The releases set forth in the Agreement shall not be impacted in any way by any dispute that exists, has existed, or may later exist between or among the Releasors. Nor shall such releases be impacted in any way by any current or future law, regulation, ordinance, or court or agency order limiting, seizing, or controlling the distribution or use 25 February 8, 2023
of the Settlement Fund or any portion thereof, or by the enactment of future laws, or by any seizure of the Settlement Fund or any portion thereof.
H. Cooperation. Releasors (i) will not encourage any person or entity to bring or maintain any Released Claim against any Released Entity and (ii) will reasonably cooperate with and not oppose any effort by a Released Entity to secure the prompt dismissal of any and all Released Claims.
I. Non-Released Claims. Notwithstanding the foregoing or anything in the definition of Released Claims, the Agreement does not waive, release or limit any criminal liability, Claims for any outstanding liability under any tax or securities law, Claims against parties who are not Released Entities, Claims by private individuals, Claims for Medicaid rebates, Claims asserted, or that could be asserted, by any State, Subdivision, or Special District related to the causes of action in In re: Generic Pharmaceuticals Pricing Antitrust Litigation, in the United States District court for the District of Pennsylvania, MDL No. 2724, and any related action (such excluded claims include, but are not limited to, all antitrust claims and any claims related to any non-opioid generic drugs), and any claims arising under the Agreement for enforcement of the Agreement.
VI. Monetary Relief Overview and Maximum Payments
A. Excluding Allergan’s share of Implementation Costs and costs of the Settlement Fund Administrator, there are three main categories of monetary payments:
1. Annual Payments to the Settlement Fund. These payments are generally addressed in Section VII. The maximum amount Allergan shall pay in Annual Payments to the Settlement Fund is the Net Abatement Amount of $1,799,186,751.00, which reflects the application of the Prior Settlements Credit to the Global Settlement Abatement Amount. Annual Payments will be made over seven (7) years on the Payment Dates. The actual amount paid will depend on, among other things, the level of participation of Eligible States, their Subdivisions, and their Special Districts.
2. Additional Restitution Amount. These payments are generally addressed in Section XII. The maximum amount Allergan shall pay for the Additional Restitution Amount is $16,192,680.76. Payments for the Additional Restitution Amount will be made over four (4) years on the Payment Dates. The actual amount paid will depend on the number of Eligible States listed in Exhibit N that become Settling States.
3. Attorney Fee and Cost Payments. These payments are generally addressed in Section XII and Exhibits M, R, S, and T. They consist of payments for the State Outside Counsel Fee Fund, the State Cost Fund, and the Attorney Fee and Cost Fund. These payments will be made over four (4) on the Payment Dates. The maximum amount Allergan shall pay into these funds is the Global Settlement Attorney Fee Amount of $206,906,476.36.
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B. The aggregate maximum amount Allergan shall pay for these for these payment categories is $2,022,285,908.12 (the “Post-Credit Global Settlement Amount”). This figure does not include costs related to injunctive relief and document disclosure addressed in Exhibit P, Implementation Costs, and Settlement Fund Administrator Costs addressed in this Agreement. AbbVie agrees to satisfy the obligations to make the payments due in this Section VI if for any reason Allergan fails to fulfill its payment obligations under Section VI (the “Payment Obligations”).
C. For purposes of this Agreement only, Releasors represent that fifty-six percent (56%) of the Post-Credit Global Settlement Amount payable by Allergan constitutes consideration for the settlement of Claims involving, arising from, or related to generic opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and other Divested Entities and the operation of Divested Actavis Generic Entities and other Divested Entities related to those generic opioid drugs that are Products before August 2, 2016 that the Releasors are asserting or might otherwise assert or could assert that Allergan (or any other Released Entity) is directly or indirectly and/or jointly or severally liable, including but not limited to, based on parent or control liability or a substantially similar theory. Releasors represent that forty-four percent (44%) of the PostCredit Global Settlement Amount payable by Allergan constitutes consideration for the settlement of Claims involving, arising from, or related to branded opioid drugs that are Products of or attributable to Allergan or any other Released Entity (including but not limited to branded opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and other Divested Entities and the operation of the Divested Actavis Generic Entities and the other Divested Entities related to those branded opioid drugs that are Products before August 2, 2016) that the Releasors are asserting or might otherwise assert or could assert against Allergan or any other Released Entity, of which seventy-seven percent (77%) is specifically involving, arising from, or related to Kadian® (including but not limited to Kadian® manufactured, distributed, marketed, and/or sold from 1997 through 2008 by King Pharmaceuticals, Inc. and/or Alpharma Inc.).
D. Settlement Fund Administrator and Implementation Costs. If this Agreement becomes effective, Allergan shall be responsible for one-third of the Implementation Costs. The full amount of the Implementation Costs shall be jointly advanced by Teva and Allergan. If this Agreement becomes effective, then Allergan shall deduct from Allergan’s Initial Year Payment the difference between the excess amount it advanced for Implementation Costs and its one-third obligation for such costs. Settlement Fund Administrator Costs shall be paid out of interest accrued on the Settlement Fund. Should such interest prove insufficient to fully cover the costs, the remaining cost amounts shall be paid one-third by Teva, onethird by Allergan and one-third from the Settlement Fund through the disbursement of Allergan’s final Payment Allergan shall not be responsible for any costs incurred by the Settlement Fund Administrator after the disbursement of its final Payment.
VII. Annual Payments to Settlement Fund
27 February 8, 2023
A. Structure of Payments to Settlement Fund
1. All payments under this Section VII shall be made into the Settlement Fund, except that where specified, they shall be made into the Settlement Fund Escrow. The Settlement Fund shall be allocated and used only as specified in Section VIII.
2. Allergan shall pay into the Settlement Fund the Net Abatement Amount consisting of $1,799,186,751.00 minus: (1) any offsets specified in subsection VII.C below; (2) any unearned Incentive Payments under subsection VII.E below; and (3) any adjustments under Section XI below.
3. The payments to the Settlement Fund shall be divided into Base Payments and Incentive Payments as provided in subsections VII.D and VII.E below and set out in Exhibit M.
B. Settlement Fund Payment Process
1. Except as otherwise provided in this Agreement, Allergan shall make one Initial Year Payment (the first Annual Payment) and six (6) additional Annual Payments of equal installments of the Net Abatement Amount (after all applicable offsets) into the Settlement Fund. The Settlement Payment Schedule is set forth in Exhibit M. Annual Payments shall be made on the Payment Date, provided that the necessary wire instructions, W-9 form, and Allergan’s Bank Verification Form process is completed for the Settlement Fund at least twenty-one (21) days before the relevant payment is due and Allergan has completed any process required by the Settlement Fund Administrator and/or its financial institution(s) to complete the transaction. If there is a delay in making a payment because any of these conditions were not completed at least twenty-one (21) days in advance of the Payment Date, then the Annual Payment will be made within twenty-one (21) days of the completion of these conditions.
2. The Initial Year Payment shall consist of only Base Payments (after all applicable offsets). The other six (6) Annual Payments shall each consist of Base Payments (after all applicable offsets) and Incentive Payments (after all applicable offsets).
The amount of the Initial Year Payment and each other Annual Payment, payable by Allergan shall not exceed the maximum amounts allocated to each Payment Year in Exhibit M.
3. To determine each Annual Payment for Payment Year 2 forward, the Settlement Fund Administrator shall use the data in its records sixty (60) days prior to the Payment Date for each payment. Prior to the Effective Date, the Parties will include an exhibit to the Agreement setting forth in detail the process for the Settlement Fund Administrator obtaining relevant data and for distributing funds to Settling States and Exhibit G Participants consistent with the terms of this Agreement as quickly as practical.
28 February 8, 2023
4. The Settlement Fund Administrator shall determine the Annual Payment and the Statewide Payment Amount for each Settling State, consistent with the provisions in Exhibit L, by:
a. determining, for each Settling State, the amount of Base Payments and Incentive Payments to which the State is entitled by applying the criteria in this Section;
b. applying any reductions, or offsets required by Sections VII and XI; and c. determining the total amount owed by Allergan to all Settling States and Exhibit G Participant.
5. If, no later than fifty (50) days prior to the Payment Date for each payment for Payment Year 2 forward, Allergan and the Enforcement Committee inform the Settlement Fund Administrator that they agree on the amount of the Annual Payment and the Statewide Payment Amount for each Settling State, Allergan shall pay the agreed-upon Annual Payment amount on the Payment Date and the Settlement Fund Administrator shall treat those amounts as the determination described in subsection VII.B.4. If the Settlement Fund Administrator is not so informed, it shall give notice to Allergan, the Settling States, and the Enforcement Committee of the amount of the Annual Payment, and the Statewide Payment Amount for each Settling State, following the determination described in subsection VII.B.4, and the following timeline shall apply:
a. Within twenty-one (21) days of the notice provided by the Settlement Fund Administrator, Allergan, any Settling State or the Enforcement Committee may dispute, in writing, the calculation of the Annual Payment, or the Statewide Payment Amount for a Settling State. Such disputing party must provide a written notice of dispute to the Settlement Fund Administrator, the Enforcement Committee, any affected Settling State, and Allergan identifying the nature of the dispute, the amount of money that is disputed, and the Settling State(s) affected.
b. Within twenty-one (21) days of the sending of a written notice of dispute, any affected party may submit a response, in writing, to the Settlement Fund Administrator, the Enforcement Committee, any affected Settling State, and Allergan identifying the basis for disagreement with the notice of dispute. c. If no response is filed, the Settlement Fund Administrator shall adjust the amount calculated consistent with the written notice of dispute, and Allergan shall pay the adjusted amount as the Annual Payment on the Payment Date. If a written response to the written notice of dispute is timely sent to the Settlement Fund Administrator, the Settlement Fund Administrator shall notify Allergan of the preliminary amount to be paid, which shall be the greater of the amount originally calculated by the Settlement Fund Administrator or the amount that would be consistent with 29 February 8, 2023
the notice of dispute, provided, however that in no circumstances shall the preliminary amount to be paid be higher than the maximum amount of Base Payments and Incentive Payments for that payment as set forth in Exhibit M. For the avoidance of doubt, a transfer of payments from the Settlement Fund Escrow for other Payment Years does not count toward determining whether the amount to be paid is higher than the maximum amount of Base Payments and Incentive Payments for that payment as set forth in Exhibit M.
d. The Settlement Fund Administrator shall place any disputed amount of the preliminary amount paid by Allergan into the Settlement Fund Escrow and shall disburse any undisputed amount to each Settling State and its Exhibit G Participants.
6. If a Settling State informs the Settlement Fund Administrator that it and its Exhibit G Participants have reached consensus on the amount of its Statewide Payment Amount, determined pursuant to subsection VII.B.3 or VII.B.4, to be distributed to the Settling State, among its separate types of funds (if applicable), and among its Exhibit G Participants, the Settlement Fund Administrator shall disburse the Statewide Payment Amount pursuant to the consensus distribution amounts provided by the Settling State. For a Settling States that does not so notify the Settlement Fund Administrator, the Settlement Fund Administrator shall allocate the Settling State’s Statewide Payment Amount, pursuant to Section VII, among the separate types of funds for the Settling State (if applicable), and among its Exhibit G Participants using the following procedures:
a. As soon as possible for each payment and following the determination described in subsection VII.B.3 and VII.B.4, the Settlement Fund Administrator shall give notice to the relevant Settling States and their Exhibit G Participants of the amount to be received by each Settling State, the amount to be received by the separate types of funds for each Settling State (if applicable), and the amount to be received by each Settling State’s Exhibit G Participants.
b. Within twenty-one (21) days of the notice provided by the Settlement Fund Administrator, any Settling State or Exhibit G Participant may dispute, in writing, the calculation of the amount to be received by a Settling State and/or its Exhibit G Participants. A dispute will be deemed invalid and disregarded if it challenges the allocations adopted by a State-Subdivision Agreement approved pursuant to the provisions of Exhibit O or by statute.
Such disputing party must provide a written notice of dispute to the Settlement Fund Administrator, any affected Settling State, and any affected Exhibit G Participant identifying the nature of the dispute, the amount of money that is disputed, and the Settling State(s) affected. c. Within twenty-one (21) days of the sending of a written notice of dispute, any affected Settling State or any affected Exhibit G Participant may submit 30 February 8, 2023
a response, in writing, to the Settlement Fund Administrator, any affected Settling State and any affected Exhibit G Participant identifying the basis for disagreement with the notice of dispute.
d. If no response is filed, the Settlement Fund Administrator shall adjust the amount calculated consistent with the written notice of dispute. e. The Settlement Fund Administrator shall place any disputed amount into the Settlement Fund Escrow and shall disburse any undisputed amount to the Settling State and its Exhibit G Participants.
7. Disputes described in this subsection (other than those for which no response is filed under subsection VII.B.5.c or VII.B.6.d) shall be resolved in accordance with the terms of Section XIV.
8. The Settlement Fund Administrator may combine the disbursements of Annual Payments with disbursement of funds under other comparable opioid settlements.
In determining when disbursements for each Annual Payment will be made, the Settlement Fund Administrator may take into account the timeline for the availability of disbursements under other comparable opioid settlements.
9. For the avoidance of doubt, Subdivisions and Special Districts not listed on Exhibit G shall not receive an allocation from the Subdivision Fund.
C. Offsets to Annual Payments to the Settlement Fund for Non-Settling States
1. An offset equal to the Net Abatement Amount of $1,799,186,751.00 times the State Allocation Percentage assigned to each Non-Settling State in Exhibit F-2 shall be deducted from the total amount to be paid by Allergan to the Settlement Fund.
2. Non-Settling States shall not be eligible for any payments or have any rights in connection with this Agreement. Accordingly, the stated maximum dollar amounts of the Annual Payments specified in Exhibit M are reduced by the aggregate State Allocation Percentage of Non-Settling States as set forth in Exhibit F-2.
D. Base Payments
1. Allergan shall make Base Payments into the Settlement Fund in an amount equal to 45% of the Net Abatement Amount of $1,799,186,751.00 minus any offsets for Non-Settling States specified in Section VII.C.I. The maximum total for Base Payments is $809,634,037.95. The Base Payments will be paid in accordance with the Settlement Payment Schedule specified by Exhibit M, subject to potential offsets for Non-Settling States as provided in Section VII.C.1.
2. The Base Payments will be allocated by Settling State proportionate to each Settling State’s State Allocation Percentage in Exhibit F-2, adjusted for any Non-Settling State.
31 February 8, 2023
E. Incentive Abatement Payments
1. Allergan shall make potential Incentive Payments totaling up to a maximum of 55% of the Net Abatement Amount of $1,799,186,751.00 for all Settling States with the actual amount depending on whether and the extent to which the criteria set forth below are met in each Settling State. The maximum total for Incentive Payments is $989,552,713.05.
2. The maximum total Incentive Payment for any Settling State shall be no more than the maximum total for Incentive Payments listed in Section VII.E.1 times the Settling State’s State Allocation Percentage specified in Exhibit F-2. Incentive Payments are state-specific, with each Settling State receiving an Incentive Payment based on the incentives for which it is eligible for that year under the criteria set forth below and any offset specified in Section XI.
3. The Incentive Payments shall be divided among four (4) categories, referred to as Incentives A–D. Incentives A–C will be due in installments over six (6) Payment Years beginning with Annual Payment 2 and Incentive D will be due in installments over four (4) years beginning with Annual Payment 4, as shown on Exhibit M. The total amount of Incentive Payments in an Annual Payment shall be the sum of the Incentive Payments for which individual Settling States are eligible for that Payment Year under the criteria set forth below. The Incentive Payments shall be made with respect to a specific Settling State based on its eligibility for that Payment Year under the criteria set forth below.
4. The maximum amount available for Incentive Payments, $989,552,713.05, is divided into two pools. The maximum amount of Incentive Payments for Incentives A-C shall be $863,609,640.48, which is 48% of the maximum Net Abatement Amount. A Settling State may be eligible for its full allocable share of this payment by either achieving Incentive A or by fully earning both Incentives B and C. The maximum amount of Incentive Payments for Incentive D shall be $125,943,072.57, which is 7% of the maximum Net Abatement Amount. (These figures represent maximum payments prior to being adjusted for any offsets and assumes every State is a Settling State and will satisfy the requirements specified below to earn its maximum incentive amount. The Incentive Payments will be paid in accordance with the payment schedule in Exhibit M, subject to potential deductions as provided herein.) A Settling State qualifies to receive Incentive Payments in addition to Base Payments if it meets the incentive eligibility requirements specified below. Settling States may qualify for Incentive Payments in four ways. If a Settling State qualifies for Incentive A, it will become entitled to receive the maximum payment allocable to the State for Incentives A-C as stated in subsection VII.E.5. If a Settling State does not qualify for Incentive A, it can alternatively qualify for Incentive B and/or Incentive C. A Settling State can qualify for Incentive D regardless of whether it qualifies for another Incentive Payment.
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5. Incentive A: Full Participation or Fully Released Claims of Litigating Subdivisions, Litigating Special Districts, Non-Litigating Subdivisions with Population Greater Than 10,000, and Non-Litigating Covered Special Districts. a. A Settling State’s total potential Incentive A payment allocation is $863,609,640.48 times the percentage allocation assigned that Settling State in Exhibit F-2.
b. A State qualifies for Incentive A by: (1) complete participation in the form of releases consistent with Section V above from all Litigating Subdivisions and Litigating Special Districts, Non-Litigating Subdivisions with population over 10,000, and Non-Litigating Covered Special Districts; (2) a Bar; or (3) a combination of approaches in clauses (1)-(2) that achieves the same level of resolution of Subdivision and Special District Claims (e.g., a law barring future litigation combined with full joinder by Litigating Subdivisions and Litigating Special Districts). For purposes of Incentive A, a Subdivision or Special District is considered a “Litigating Subdivision” or “Litigating Special District” if it has brought Released Claims against Released Entities on or before the Reference Date; all other Subdivisions and Special Districts are considered “Non-Litigating.” For purposes of Incentive A, Non-Litigating Covered Special Districts shall not include a Special District with any of the following words or phrases in its name:
mosquito, pest, insect, spray, vector, animal, air quality, air pollution, clean air, coastal water, tuberculosis, and sanitary.
c. If a Settling State qualifies for Incentive A after receiving an Incentive Payment under Incentives B or C, described below, the Settling State’s payments under Incentive A will equal the remainder of its total potential Incentive A payments less any payments previously received under Incentives B or C. A Settling State that receives all of its total potential Incentive A payment allocation shall not receive additional Incentive Payments under Incentives B or C.
d. A Settling State that is not eligible for Incentive A as of two (2) years after the Effective Date shall not be eligible for Incentive A for that Payment Year or any subsequent Payment Years.
6. Incentive B: Early Participation or Released Claims by Litigating Subdivisions and Litigating Special Districts.
a. If a Settling State does not qualify for Incentive A, it may still qualify to receive up to 60% of its total potential Incentive A payment allocation under Incentive B.
b. A Settling State can qualify for an Incentive B payment if Litigating Subdivisions and Litigating Special Districts collectively representing at least 75% of the Settling State’s litigating population are either Participating 33 February 8, 2023
Subdivisions, Participating Special Districts, or have their claims resolved through Case-Specific Resolutions.
(i) A Settling State’s litigating population is the sum of the population of all Litigating Subdivisions and Litigating Special Districts. A Settling State’s litigating population shall include all Litigating Subdivisions and Litigating Special Districts whose populations overlap in whole or in part with other Litigating Subdivisions and Litigating Special Districts, for instance in the case of a Litigating Special District, city, or township contained within a county. (ii) For example, if School District A is a Litigating Special District in City B with a population of 1, City B is itself a Litigating Subdivision with a population of 8, and City B is located within County C, and County C is a Litigating Subdivision with a population 10, then each of their individual populations shall be added together (i.e., 1 + 8 +10) to determine the total litigating population (i.e., 19).
c. The following time periods apply to Incentive B payments:
(i) Period 1: Zero to two hundred ten (210) days after the Effective Date.
(ii) Period 2: Two hundred eleven (211) days to one year after the Effective Date.
(iii) Period 3: One year and one day to two years after the Effective Date. d. Within Period 1: If Litigating Subdivisions and Litigating Special Districts collectively representing at least 75% of a Settling State’s litigating population are Participating Subdivisions or Participating Special Districts, or have their Claims resolved through Case-Specific Resolutions during Period 1, then a sliding scale will determine the share of the funds available under Incentive B, with a maximum of 60% of the Settling State’s total potential Incentive Payment allocation available. Under that sliding scale, if Litigating Subdivisions and Litigating Special Districts collectively representing 75% of a Settling State’s litigating population become Participating Subdivisions or Participating Special Districts, or achieve Case-Specific Resolution status by the end of Period 1, a Settling State will receive 50% of the total amount available to it under Incentive B. If more Litigating Subdivisions and Litigating Special Districts become Participating Subdivisions or Participating Special Districts, or achieve Case-Specific Resolution status, the Settling State shall receive an increased percentage of the total amount available to it under Incentive B as shown in the table below.
34 February 8, 2023
Participation or Case-Specific
Resolution Levels
(As percentage of litigating
population)
Incentive B Award
(As percentage of total
amount available to Settling State
for Incentive B)
75% 50%
76% 52%
77% 54%
78% 56%
79% 58%
80% 60%
85% 70%
90% 80%
95% 90%
100% 100%
e. Within Period 2: If a Settling State did not qualify for an Incentive B payment in Period 1 but Litigating Subdivisions and Litigating Special Districts collectively representing at least 75% of the Settling State’s litigating population become Participating Subdivisions or Participating Special Districts, or achieve Case-Specific Resolution status by the end of Period 2, then the Settling State qualifies for 75% of the Incentive B payment it would have qualified for in Period 1.
f. Within Period 3: If a Settling State did not qualify for an Incentive B payment in Periods 1 or 2, but Litigating Subdivisions and Litigating Special Districts collectively representing at least 75% of the Settling State’s litigating population become Participating Subdivisions or Participating Special Districts, or achieve Case-Specific Resolution status by the end of Period 3, then the Settling State qualifies for 50% of the Incentive B payment it would have qualified for in Period 1. g. A Settling State that receives the Incentive B payment for Periods 1 and/or 2 can receive additional payments if it secures participation from additional Litigating Subdivisions and/or Litigating Special Districts (or Case-Specific Resolutions of their Claims) during Periods 2 and/or 3. Those additional payments would equal 75% (for additional participation or Case-Specific Resolutions during Period 2) and 50% (for additional participation or CaseSpecific Resolutions during Period 3) of the amount by which the increased litigating population levels would have increased the Settling State’s Incentive B payment if they had been achieved in Period 1. h. The percentage of the available Incentive B amount for which a Settling State is eligible by the end of Period 3 shall cap its eligibility for that Payment Year and all subsequent Payment Years. If Litigating Subdivisions and Litigating Special Districts that have become Participating Subdivisions or Participating Special Districts, or achieved Case-Specific Resolution 35 February 8, 2023
status collectively represent less than 75% of a Settling State’s litigating population by the end of Period 3, the Settling State shall not receive any Incentive B payment.
i. If there are no Litigating Subdivisions or Litigating Special Districts in a Settling State, and that Settling State is otherwise eligible for Incentive B, that Settling State will receive its full allocable share of Incentive B. j. Incentives earned under Incentive B shall accrue after each of Periods 1, 2, and 3. Calculations to increase Incentive Payments in later periods based on additional joinder shall not reduce any amount already vested at the end of a prior period.
7. Incentive C: Participation or Release of Claims by Primary Subdivisions a. If a Settling State does not qualify for Incentive A, it may still qualify to receive up to 40% of its total potential Incentive A payment allocation under Incentive C, which has two parts.
b. Part 1: Under Incentive C, Part 1, a Settling State can receive up to 75% of its Incentive C allocation. A Settling State can qualify for a payment under Incentive C, Part 1 only if Primary Subdivisions (whether Litigating Primary Subdivisions or Non-Litigating Primary Subdivisions as of the Reference Date) collectively representing at least 60% of the Settling State’s Primary Subdivision population become Participating Subdivisions or achieve Case-Specific Resolution status.
(i) A Settling State’s Primary Subdivision population is the sum of the population of all Primary Subdivisions (whether Litigating Primary Subdivisions or Non-Litigating Primary Subdivisions as of the Reference Date). A Settling State’s Primary Subdivision population shall include all Primary Subdivisions whose populations overlap in whole or in part with other Primary Subdivisions, for instance in the case of a Primary Subdivision that is a city contained within a Primary Subdivision that is a county. Because Primary Subdivisions include Subdivisions whose populations overlap in whole or in part with other Subdivisions, the Settling State’s Primary Subdivision population may be greater than the Settling State’s total population. (Special Districts are not relevant for purposes of Incentive C calculations.)
(ii) For example, if City A is a Primary Subdivision with a population of 1 within County B, and County B is a Primary Subdivision with a population of 10, then each of their individual populations shall be added together (i.e., 1+10) to determine the total Primary Subdivision population (i.e., 11).
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c. A sliding scale will determine the share of the funds available under Incentive C, Part 1 to Settling States meeting the minimum 60% threshold.
Under that sliding scale, if a Settling State secures participation or CaseSpecific Resolutions from Primary Subdivisions representing 60% of its total Primary Subdivision population, it will receive 40% of the total amount potentially available to it under Incentive C, Part 1. If a Settling State secures participation or Case-Specific Resolutions from Primary Subdivisions representing more than 60% of its Primary Subdivision population, the Settling State shall be entitled to receive a higher percentage of the total amount potentially available to it under Incentive C, Part 1, on the scale shown in the table below. If there are no Primary Subdivisions, and that Settling State is otherwise eligible for Incentive C, that Settling State will receive its full allocable share of Incentive C, Part 1.
Participation or Case-Specific
Resolution Levels
(As percentage of total Primary
Subdivision population)
Incentive C, Part 1 Award
(As percentage of total
amount available to Settling State
for Incentive C, Part 1)
60% 40%
70% 45%
80% 50%
85% 55%
90% 60%
91% 65%
92% 70%
93% 80%
94% 90%
95% 100%
d. Part 2: If a Settling State qualifies to receive an incentive under Incentive C, Part 1, the Settling State can also qualify to receive an additional incentive amount equal to 25% of its total potential Incentive C allocation by securing 100% participation of the ten (10) largest Subdivisions by population in the Settling State. (Special Districts are not relevant for purposes of this calculation.) If a Settling State does not qualify for any amount under Incentive C, Part 1, it cannot qualify for Incentive C, Part 2. e. Incentives earned under Incentive C shall accrue on an annual basis up to three years after the Effective Date. At one, two, and three years after the Effective Date, the Settlement Fund Administrator will conduct a lookback to assess which Subdivisions had agreed to participate or had their Claim resolved through a Case-Specific Resolution that year. Based on the lookback, the Settlement Fund Administrator will calculate the incentives accrued under Incentive C for the year. The percentage of the available Incentive C amount, for both Part 1 and Part 2, for which a Settling State is 37 February 8, 2023
eligible three years after the Effective Date shall cap its eligibility for that Payment Year and all subsequent Payment Years.
8. Incentive D: No Qualifying Lawsuits Surviving Threshold Motions at Two LookBack Dates. a. A Settling State’s total potential Incentive D payment allocation is $125,943,072.57 times the percentage allocation assigned that Settling State in Exhibit F-2.
b. If, at any time within five and one-half (5.5) years of the Preliminary Agreement Date, any Subdivision or Special District within a Settling State files litigation pursuing Released Claims against any Released Entity (a “Qualifying Lawsuit”), then Allergan shall, within thirty (30) days of Allergan or any Released Entity being served or otherwise informed of the prosecution of such Released Claims, provide notice to the Settling State in which such Released Claims are being pursued and shall give the relevant Settling State a reasonable opportunity to extinguish the Released Claims without any payment or any other obligations being imposed upon any Released Entities (apart from the Global Settlement Amount payable by Allergan under the Agreement or the Injunctive Relief Terms incurred by it). The relevant Settling State and Allergan shall confer and use reasonable efforts to promptly resolve a Qualifying Lawsuit so that it is dismissed with prejudice. Nothing in this subsection creates an obligation for a Settling State to make a monetary payment or incur any other obligation to an entity filing a Qualifying Lawsuit.
c. Part 1: Under Incentive D, Part 1, a Settling State shall receive 50% of its total potential Incentive D payment allocation if, at two years after the Effective Date (the “First Look-Back Date”), there are no pending Released Claims from a Qualifying Lawsuit that survived a Threshold Motion within the Settling State against any Released Entities.
d. Part 2: Under Incentive D, Part 2, a Settling State shall receive 50% of its total potential Incentive D payment allocation if, at five and one-half (5.5) years after the Preliminary Agreement Date (the “Second Look-Back Date”), there are no pending Released Claims from a Qualifying Lawsuit that survived a Threshold Motion within the Settling State against any Released Entities.
e. After the First Look-Back Date, a Settling State can become re-eligible for Incentive Payment D Part 1 if the lawsuit that survived a Threshold Motion is dismissed pursuant to a later motion on grounds included in the Threshold Motion, in which case the Settling State shall become eligible for Incentive Payment D less any litigation fees and cost incurred by the Released Entity in the interim, except that if the dismissal motion occurs after the 38 February 8, 2023
completion of opening statements in such action, the Settling State shall not be eligible for Incentive Payment D.
VIII. Allocation and Use of Settlement Funds
A. Components of Settlement Fund. The Settlement Fund shall be comprised of an Abatement Accounts Fund, a State Fund, and a Subdivision Fund for each Settling State. The payments under Section VI into the Settlement Fund shall be initially allocated among those three (3) sub-funds and distributed and used as provided below or as provided for by a StateSubdivision Agreement (or other State-specific allocation of funds). Unless otherwise specified herein, payments placed into the Settlement Fund do not revert back to Allergan.
B. Use of Settlement Payments. It is the intent of the Parties that the payments disbursed from the Settlement Fund to Settling States and Exhibit G Participants be for Opioid Remediation, subject to limited exceptions that must be documented in accordance with subsection VII.C. In no event may less than 85% of Allergan’s payments pursuant to Section VI.A.1-3 over the entirety of all Payment Years (but not any single Payment Year) be spent on Opioid Remediation.
C. While disfavored by the Parties, a Settling State or Exhibit G Participant may use monies from the Settlement Fund (that have not been restricted by this Agreement solely to future Opioid Remediation) for purposes that do not qualify as Opioid Remediation. If, at any time, a Settling State or Exhibit G Participant uses any monies from the Settlement Fund for a purpose that does not qualify as Opioid Remediation, such Settling State or Exhibit G Participant shall identify such amounts and report to the Settlement Fund Administrator and Allergan how such funds were used, including if used to pay attorneys’ fees, investigation costs, litigation costs, or costs related to the operation and enforcement of this Agreement, respectively. It is the intent of the Parties that the reporting under this subsection VIII.C shall be available to the public. For the avoidance of doubt, (a) any amounts not identified under this subsection VIII.C as used to pay attorneys’ fees, investigation costs, or litigation costs shall be included in the “Compensatory Restitution Amount” for purposes of subsection VIII.G and (b) Participating Subdivisions not listed on Exhibit G or Participating Special Districts that receive monies from the Settlement Fund indirectly may only use such monies from the Settlement Fund for purposes that qualify as Opioid Remediation.
D. Allocation of Settlement Fund. The allocation of the Settlement Fund allows for different approaches to be taken in different states, such as through a State-Subdivision Agreement.
Given the uniqueness of States and their Subdivisions, Settling States and Participating Subdivisions are encouraged to enter into State-Subdivision Agreements in order to direct the allocation of their portion of the Settlement Fund. As set out below, the Settlement Fund Administrator will make an initial allocation to three (3) state-level sub-funds. The Settlement Fund Administrator will then, for each Settling State and its Exhibit G Participants, apply the terms of this Agreement and any relevant State-Subdivision Agreement, Statutory Trust, Allocation Statute, or voluntary redistribution of funds as set out below before disbursing the funds.
39 February 8, 2023
1. Base Payments. The Settlement Fund Administrator will allocate Base Payments under subsection VII.D among the Settling States in proportion to their respective State Allocation Percentages. Base Payments for each Settling State will then be allocated 15% to its State Fund, 70% to its Abatement Accounts Fund, and 15% to its Subdivision Fund. Amounts may be reallocated and will be distributed as provided in subsection VIII.E.
2. Incentive Payments. The Settlement Fund Administrator will treat Incentive Payments under subsection VII.E on a State-specific basis. Incentive payments for which a Settling State is eligible under subsection VII.E will be allocated 15% to its State Fund, 70% to its Abatement Accounts Fund, and 15% to its Subdivision Fund. Amounts may be reallocated and will be distributed as provided in subsection VIII.E.
3. Application of Adjustments. If any offset under Section XI applies with respect to a Settling State, the offset shall be applied proportionally to all amounts that would otherwise be apportioned and distributed to the State Fund, the Abatement Accounts Fund, and the Subdivision Fund for that State.
4. Settlement Fund Administrator. Prior to the Initial Participation Date, Allergan and the Enforcement Committee will agree to a detailed mechanism consistent with the foregoing for the Settlement Fund Administrator to follow in allocating, apportioning, and distributing payments, which shall be appended hereto as Exhibit L.
E. Settlement Fund Reallocation and Distribution. As set forth below, within a particular Settling State’s account, amounts contained in the Settlement Fund sub-funds may be reallocated and distributed per a State-Subdivision Agreement or other means. If the apportionment of amounts is not addressed and controlled under subsections VIII.E.1-2, then the default provisions of subsection VIII.E.4 apply. It is not necessary that a StateSubdivision Agreement or other means of allocating funds pursuant to subsections VIII.E.1-2 address all of the Settlement Fund sub-funds. For example, a Statutory Trust might only address disbursements from a Settling State’s Abatement Accounts Fund.
1. Distribution by State-Subdivision Agreement. If a Settling State has a StateSubdivision Agreement, amounts apportioned to that State’s State Fund, Abatement Accounts Fund, and Subdivision Fund under subsection VIII.D shall be reallocated and distributed as provided by that agreement. Any State-Subdivision Agreement entered into or amended after July 26, 2022 shall be applied only if it requires: (1) that all amounts be used for Opioid Remediation except as allowed by subsection VIII.C, and (2) that at least 70% of amounts be used solely for future Opioid Remediation (references to “future Opioid Remediation” include amounts paid to satisfy any future demand by another governmental entity to make a required reimbursement in connection with the past care and treatment of a person related to the Alleged Harms). For a State-Subdivision Agreement to be applied to the relevant portion of an Annual Payment, notice must be provided to Allergan and the Settlement Fund Administrator at least ten (10) days prior to the Settlement 40 February 8, 2023
Administrator’s disbursement of such portion to a Settling State and its Participating Subdivisions and Special Districts.
2. Distribution by Allocation Statute. If a Settling State has an Allocation Statute and/or a Statutory Trust that addresses allocation or distribution of amounts apportioned to such State’s State Fund, Abatement Accounts Fund, and/or Subdivision Fund and that, to the extent any or all such sub-funds are addressed, requires (1) all amounts to be used for Opioid Remediation except as allowed by subsection VIII.C, and (2) at least 70% of all amounts to be used solely for future Opioid Remediation, then, to the extent allocation or distribution is addressed, the amounts apportioned to that State’s State Fund, Abatement Accounts Fund, and Subdivision Fund under subsection VIII.D shall be allocated and distributed as addressed and provided by the applicable Allocation Statute or Statutory Trust. For the avoidance of doubt, an Allocation Statute or Statutory Trust need not address all three (3) sub-funds that comprise the Settlement Fund, and if the applicable Allocation Statute or Statutory Trust does not address distribution of all or some of these three (3) sub-funds, the applicable Allocation Statute or Statutory Trust does not replace the default provisions in subsection VIII.E.4 of any such unaddressed fund. For example, if an Allocation Statute or Statutory Trust that meets the requirements of this subsection VIII.E only addresses funds restricted to abatement, then the default provisions in this Agreement concerning allocation among the three (3) sub-funds comprising the Settlement Fund and the distribution of the State Fund and Subdivision Fund for that State would still apply, while the distribution of the applicable State’s Abatement Accounts Fund would be governed by the qualifying Allocation Statute or Statutory Trust.
3. Voluntary Redistribution. A Settling State may choose to reallocate all or a portion of its State Fund to its Abatement Accounts Fund. An Exhibit G Participant may choose to reallocate all or a portion of its allocation from the Subdivision Fund to the State’s Abatement Accounts Fund or to another Participating Subdivision or Participating Special District. The Settlement Fund Administrator is not required to honor voluntary redistribution for which notice is provided to it less than sixty (60) days prior to the Payment Date.
4. Distribution in the Absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust. If subsections VIII.E.1-2 do not apply, and subject to any voluntary redistribution pursuant to subsection VIII.E.3, amounts apportioned to that State’s State Fund, Abatement Accounts Fund, and Subdivision Fund under subsection VIII.D shall be distributed as follows:
a. Amounts apportioned to that State’s State Fund shall be distributed to that State.
b. Amounts apportioned to that State’s Abatement Accounts Fund shall be distributed consistent with subsection VIII.F. Each Settling State shall submit to the Settlement Fund Administrator a designation of a lead state agency or other entity to serve as the single point of contact for that Settling 41 February 8, 2023
State’s funding requests from the Abatement Accounts Fund and other communications with the Settlement Fund Administrator. The designation of an individual entity is for administrative purposes only and such designation shall not limit funding to such entity or even require that such entity receive funds from this Agreement. The designated entity shall be the only entity authorized to request funds from the Settlement Fund Administrator to be disbursed from that Settling State’s Abatement Accounts Fund. If a Settling State has established a Statutory Trust then that Settling State’s single point of contact may direct the Settlement Fund Administrator to release the State’s Abatement Accounts Fund to the Statutory Trust.
c. Amounts apportioned to that State’s Subdivision Fund shall be distributed to Participating Subdivisions in that State listed on Exhibit G per the Subdivision Allocation Percentage listed in Exhibit G. Subsection X.I shall govern amounts that would otherwise be distributed to Non-Participating Subdivisions listed in Exhibit G.
d. Special Districts shall not be allocated funds from the Subdivision Fund, except through a voluntary redistribution allowed by subsection VIII.E.3. A Settling State may allocate funds from its State Fund or Abatement Accounts Fund for Special Districts.
5. Restrictions on Distribution. No amounts may be distributed from the Subdivision Fund contrary to Section IX, i.e., no amounts may be distributed directly to NonParticipating Subdivisions or to Later Participating Subdivisions in excess of what is permissible under subsection IX.E. Amounts allocated to the Subdivision Fund that cannot be distributed by virtue of the preceding sentence shall be distributed into the sub-account in the Abatement Accounts Fund for the Settling State in which the Subdivision is located, unless those payments are redirected elsewhere by a State-Subdivision Agreement described in subsection VIII.E.1 or by an Allocation Statute or a Statutory Trust described in subsection VIII.E.2.
F. Provisions Regarding Abatement Accounts Fund.
1. State-Subdivision Agreement, Allocation Statute, and Statutory Trust Fund Provisions. A State-Subdivision Agreement, Allocation Statute, or Statutory Trust may govern the operation and use of amounts in that State’s Abatement Accounts Fund so long as it complies with the requirements of subsection VIII.E.1 or VIII.E.2 as applicable, and all direct payments to Subdivisions comply with subsections IX.E-H.
2. Absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust.
In the absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust that addresses distribution, the Abatement Accounts Fund will be used solely for future Opioid Remediation and the following shall apply with respect to a Settling State:
42 February 8, 2023
a. Regional Remediation.
(i) At least 50% of distributions for remediation from a State’s Abatement Accounts Fund shall be annually allocated and tracked to the regional level. A Settling State may allow the Advisory Committee established pursuant to subsection VIII.F.2.d to define its regions and assign regional allocations percentages. Otherwise, a Settling State shall (1) define its initial regions, which shall consist of one (1) or more Subdivisions and which shall be designated by the State agency with primary responsibility for substance abuse disorder services employing, to the maximum extent practical, existing regions established in that State for opioid abuse treatment or other public health purposes; and (2) assign initial regional allocation percentages to the regions based on the Subdivision Allocation Percentages in Exhibit G and an assumption that all Subdivisions listed on Exhibit G will become Participating Subdivisions.
(ii) This minimum regional expenditure percentage is calculated on the Settling State’s initial Abatement Accounts Fund allocation and does not include any additional amounts a Settling State has directed to its Abatement Accounts Fund from its State Fund, or any other amounts directed to the fund. A Settling State may dedicate more than 50% of its Abatement Accounts Fund to the regional expenditure and may annually adjust the percentage of its Abatement Accounts Fund dedicated to regional expenditures as long as the percentage remains above the minimum amount. (iii) The Settling State (1) has the authority to adjust the definition of the regions, and (2) may annually revise the percentages allocated to each region to reflect the number of Subdivisions in each region that are Non-Participating Subdivisions.
b. Subdivision Block Grants. Certain Subdivisions listed on Exhibit G shall be eligible to receive regional allocation funds in the form of a block grant for future Opioid Remediation. A Participating Subdivision listed on Exhibit G eligible for block grants is a county or parish (or in the case of States that do not have counties or parishes that function as political subdivisions, a city) that (1) does not contain a Litigating Subdivision or a Later Litigating Subdivision for which it has the authority to end the litigation through a release, Bar, or other action; (2) either (i) has a population of 400,000 or more or (ii) in the case of California has a population of 750,000 or more; and (3) has funded or otherwise managed an established health care or treatment infrastructure (e.g., health department or similar agency). Each Subdivision listed on Exhibit G eligible to receive block grants shall be assigned its own region.
43 February 8, 2023
c. Small States. Notwithstanding the provisions of subsection VIII.F.2.a, Settling States with populations under four (4) million that do not have existing regions described in subsection VIII.F.2.a shall not be required to establish regions. However, such a Settling State that contains one (1) or more Subdivisions listed on Exhibit G eligible for block grants under subsection VIII.F.2.b shall be divided regionally so that each block-grant eligible Subdivision listed on Exhibit G is a region and the remainder of the State is a region.
d. Advisory Committee. The Settling State shall designate an Opioid Settlement Remediation Advisory Committee (the “Advisory Committee”) to provide input and recommendations regarding remediation spending from that Settling State’s Abatement Accounts Fund. A Settling State may elect to use an existing advisory committee or similar entity (created outside of a State-Subdivision Agreement or Allocation Statute); provided, however, the Advisory Committee or similar entity shall meet the following requirements:
(i) Written guidelines that establish the formation and composition of the Advisory Committee, terms of service for members, contingency for removal or resignation of members, a schedule of meetings, and any other administrative details;
(ii) Composition that includes at least an equal number of local representatives as state representatives;
(iii) A process for receiving input from Subdivisions and other communities regarding how the opioid crisis is affecting their communities, their abatement needs, and proposals for abatement strategies and responses; and
(iv) A process by which Advisory Committee recommendations for expenditures for Opioid Remediation will be made to and considered by the appropriate state agencies.
3. Abatement Accounts Fund Reporting. The Settlement Fund Administrator shall track and assist in the report of remediation disbursements as agreed to among the Parties.
G. Nature of Payment. Allergan, the Settling States, the Participating Subdivisions, and the Participating Special Districts, acknowledge and agree that notwithstanding anything to the contrary in this Agreement, including, but not limited to, the scope of the Released Claims:
1. Allergan has entered into this Agreement to avoid the delay, expense, inconvenience, and uncertainty of further litigation;
2. The Settling States, the Participating Subdivisions, and the Participating Special Districts sought compensatory restitution (within the meaning of 26 U.S.C. 44 February 8, 2023
§ 162(f)(2)(A)) as damages for the Alleged Harms allegedly suffered by the Settling States, Participating Subdivisions and Participating Special Districts;
3. By executing this Agreement the Settling States, the Participating Subdivisions, and the Participating Special Districts certify that: (a) the Compensatory Restitution Amount is no greater than the amount, in the aggregate, of the Alleged Harms allegedly suffered by the Settling States, Participating Subdivisions and Participating Special Districts; and (b) the portion of the Compensatory Restitution Amount received by each Settling State, Participating Subdivision or Participating Special Districts is no greater than the amount of the Alleged Harms allegedly suffered by such Settling State, Participating Subdivision or Participating Special Districts;
4. The payment of the Compensatory Restitution Amount by Allergan constitutes, and is paid for, compensatory restitution (within the meaning of 26 U.S.C. § 162(f)(2)(A)) for alleged damage or harm (as compensation for alleged damage or harm arising out of alleged bodily injury) allegedly caused by Allergan;
5. The Compensatory Restitution Amount is being paid as compensatory restitution (within the meaning of 26 U.S.C. § 162(f)(2)(A)) in order to restore, in whole or in part, the Settling States, Participating Subdivisions and Participating Special Districts to the same position or condition that they would be in had the Settling States, Participating Subdivisions and Participating Special Districts not suffered the Alleged Harms;
6. No portion of the Compensatory Restitution Amount represents reimbursement to any Settling State, Participating Subdivision, Participating Special District, or other person or entity for the costs of any investigation or litigation. The entire Compensatory Restitution Amount is properly characterized as described in subsection VIII.G. No portion of the Compensatory Restitution Amount constitutes disgorgement or is properly characterized as the payment of statutory or other fines, penalties, punitive damages, other punitive assessments, or attorneys’ fees; and
7. The Designated State, on behalf of all Settling States, Participating Subdivisions, and Participating Special Districts (the “Form 1098-F Filer”) shall complete and file Form 1098-F with the Internal Revenue Service on or before February 28 (March 31 if filed electronically) of the year following the calendar year in which the order entering this Agreement becomes binding. On the Form 1098-F, the Form 1098-F Filer shall identify the entire Compensatory Restitution Amount received by the Form 1098-F Filer as remediation/restitution. The Form 1098-F Filer shall also, on or before January 31 of the year following the calendar year in which the order entering this Agreement becomes binding, furnish Copy B of such Form 1098-F (or an acceptable substitute statement) to Allergan.
IX. Participation by Subdivisions and Special Districts 45 February 8, 2023
A. Notice. No later than fifteen (15) days after the Preliminary Agreement Date, the Settling States, with the cooperation of Allergan, shall send individual written notice (which may be delivered via e-mail or other electronic means) of the opportunity to participate in this Agreement and the requirements of participation to all Subdivisions and Special Districts in the Settling State that are (1) Litigating Subdivisions or Litigating Special Districts, or (2) Non-Litigating Subdivisions listed in Exhibit G. To the extent a Non-Litigating Special District is entitled to an allocation for a direct payment through its inclusion in Exhibit G pursuant to a State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution, the Settling States shall also send individual written notice (which may be delivered via e-mail or other electronic means) of the opportunity to participate in this Agreement and the requirements of participation to such Special District. Unless otherwise agreed by the Parties, the version of Exhibit G used for notice shall be the one in place as of the Preliminary Agreement Date. Allergan’s share of costs of the written notice shall be paid by Allergan as part of the Implementation Costs. Notice (which may be delivered via e-mail or other electronic means) shall also be provided simultaneously to counsel of record for Litigating Subdivisions, Litigating Special Districts, and known counsel for Non-Litigating Subdivisions listed on Exhibit G and Non-Litigating Special Districts listed on Exhibit G. The notice will include that the deadline for becoming an Initial Participating Subdivision or Initial Participating Special District is the Initial Participation Date. Nothing contained herein shall preclude a Settling State from providing further notice to or otherwise contacting any of its Subdivisions or Special Districts about becoming a Participating Subdivision or Participating Special District, including beginning any of the activities described in this paragraph prior to the Preliminary Agreement Date.
B. Requirements for Becoming a Participating Subdivision: Non-Litigating Subdivisions. A Non-Litigating Subdivision in a Settling State may become a Participating Subdivision by returning an executed Settlement Participation Form to the Implementation Administrator or Settlement Fund Administrator (which may be executed and returned by electronic means established by the Implementation Administrator or Settlement Fund Administrator) specifying (1) that the Subdivision agrees to the terms of this Agreement pertaining to Subdivisions, (2) that the Subdivision releases all Released Claims against all Released Entities, (3) that the Subdivision agrees to use monies it receives, if any, from the Settlement Fund pursuant to the applicable requirements of Section VIII, and (4) that the Subdivision submits to the jurisdiction of the Court where the Consent Judgment is filed for purposes limited to that Court’s role under the Agreement. The required Settlement Participation Form is attached as Exhibit K. A Non-Litigating Subdivision will decide whether to become a Participating Subdivision for both this Agreement and the Teva Global Opioid Settlement Agreement, or neither. However, if Teva enters bankruptcy prior to the Effective Date, a Non-Litigating Subdivision can choose to only join this Agreement.
C. Requirements for Becoming a Participating Subdivision: Litigating Subdivisions/Later Litigating Subdivisions. A Litigating Subdivision or Later Litigating Subdivision in a Settling State may become a Participating Subdivision by returning an executed Settlement Participation Form to the Implementation Administrator or Settlement Fund Administrator (which may be executed and returned by electronic means established by the Implementation Administrator or Settlement Fund Administrator) that, in addition to the requirements set out in subsection IX.B for Non-Litigating Subdivisions, commits it to 46 February 8, 2023
promptly dismissal its legal action. The required Settlement Participation Form is attached as Exhibit K. A Litigating Subdivision or Later Litigating Subdivision will decide whether to become a Participating Subdivision for both this Agreement and the Teva Global Opioid Settlement Agreement, or neither. However, if Teva enters bankruptcy prior to the Effective Date, a Litigating Subdivision or Later Litigating Subdivision can choose to only join this Agreement. Except for trials begun before the Initial Participation Date, a Litigating Subdivision or a Later Litigating Subdivision may not become a Participating Subdivision after the completion of opening statements in a trial of a legal action it brought that includes a Released Claim against a Released Entity.
D. Initial Participating Subdivisions. A Subdivision qualifies as an Initial Participating Subdivision if it meets the applicable requirements for becoming a Participating Subdivision set forth in subsections IX.B or IX.C by the Initial Participation Date. Provided however, all Subdivision Settlement Participation Forms shall be held by the Implementation Administrator until Allergan provides the notice in subsection X.B that it intends to proceed with the settlement, at which time the obligations created by such forms become effective. If Allergan determines not to proceed, all Settlement Participation Forms shall be returned to Counsel for Litigating Subdivisions or to the Subdivisions not represented by counsel or destroyed to the extent that such destruction is not prohibited by then existing document preservation obligations.
E. Later Participating Subdivisions. A Subdivision that is not an Initial Participating Subdivision may become a Later Participating Subdivision by meeting the applicable requirements for becoming a Participating Subdivision after the Initial Participation Date and agreeing to be subject to the terms of a State-Subdivision Agreement (if any) or any other structure adopted or applicable pursuant to subsections VIII.E or VIII.F. The following provisions govern what a Later Participating Subdivision can receive (but do not apply to Initial Participating Subdivisions):
1. A Later Participating Subdivision shall not receive any share of any Base or Incentive Payments paid to the Subdivision Fund that were due before it became a Participating Subdivision.
2. A Later Participating Subdivision that becomes a Participating Subdivision after the Initial Participation Date but before June 15, 2023 shall receive 75% of the share of the Initial Year Payment that it would have received had it become an Initial Participating Subdivision (unless the Later Participating Subdivision is subject to subsections IX.E.3 or IX.E.4 below). A Later Participating Subdivision that becomes a Participating Subdivision after June 15, 2023 shall receive no share of the Initial Year Payment.
3. A Later Participating Subdivision that, after the Initial Participation Date, maintains a lawsuit for a Released Claim(s) against a Released Entity and has judgment entered against it on every such Claim before it became a Participating Subdivision (other than a consensual dismissal with prejudice) shall receive 50% of the share of future Base Payments or Incentive Payments that it would have received had it become a Later Participating Subdivision prior to such judgment; provided, 47 February 8, 2023
however, that if the Subdivision appeals the judgment and the judgment is affirmed with finality before the Subdivision becomes a Participating Subdivision, the Subdivision shall not receive any share of any Base Payments or Incentive Payments.
4. A Later Participating Subdivision that becomes a Participating Subdivision while a Bar or Case-Specific Resolution involving a different Subdivision exists in its State shall receive 25% of the share of future Base Payments or Incentive Payments that it would have received had it become a Later Participating Subdivision without such Bar or Case-Specific Resolution.
F. No Increase in Payments. Amounts to be received by Later Participating Subdivisions or Later Participating Special Districts shall not increase the payments due from Allergan.
G. Ineligible Subdivisions and Special Districts. Prior Settling Subdivisions and Subdivisions and Special Districts in Non-Settling States or Prior Settling States are not eligible to be Participating Subdivisions or Participating Special Districts.
H. Non-Participating Subdivisions and Non-Participating Special Districts. NonParticipating Subdivisions and Non-Participating Special Districts shall not directly receive any portion of any Base Payments or Incentive Payments, including from the State Fund and direct distributions from the Abatement Accounts Fund; however, a Settling State may choose to fund future Opioid Remediation that indirectly benefits Non-Participating Subdivisions and Non-Participating Special Districts.
I. Unpaid Allocations to Later Participating and Non-Participating Subdivisions. Any Base Payments and Incentive Payments allocated pursuant to subsection VII.E to a Later Participating or Non-Participating Subdivision or a Later Participating or NonParticipating Special District that cannot be paid pursuant to Section IX, will be allocated to the Abatement Accounts Fund for the Settling State in which the Subdivision is located, unless those payments are redirected elsewhere by a State-Subdivision Agreement or by a Statutory Trust.
J. Requirements for Becoming a Participating Special District: Non-Litigating Special Districts. A Non-Litigating Special District in a Settling State may become a Participating Special District by returning an executed Settlement Participation Form to the Implementation Administrator or Settlement Fund Administrator (which may be executed and returned by electronic means established by the Implementation Administrator or Settlement Fund Administrator) specifying (1) that the Special District agrees to the terms of this Agreement pertaining to Special Districts, (2) that the Special District releases all Released Claims against all Released Entities, (3) that the Special District agrees to use monies it receives, if any, from the Settlement Fund pursuant to the applicable requirements of Section VIII, and (4) that the Special District submits to the jurisdiction of the Court where the Consent Judgment is filed for purposes limited to that Court’s role under the Agreement. The required Settlement Participation Form is attached as Exhibit K. A NonLitigating Special District will decide whether to become a Participating Special District for both this Agreement and the Teva Global Opioid Settlement Agreement, or neither. 48 February 8, 2023
However, if Teva enters bankruptcy prior to the Effective Date, a Non-Litigating Special District can choose to only join this Agreement.
K. Requirements for Becoming a Participating Special District: Litigating Special Districts/Later Litigating Special Districts. A Litigating Special District or Later Litigating Special District in a Settling State may become a Participating Special District by returning an executed Settlement Participation Form to the Implementation Administrator or Settlement Fund Administrator (which may be executed and returned by electronic means established by the Implementation Administrator or Settlement Fund Administrator) that, in addition to the requirements set out in subsection IX.J for Non-Litigating Special Districts, commits it to promptly dismiss its legal action. The required Settlement Participation Form is attached as Exhibit K. A Litigating Special District or Later Litigating Special District will decide whether to become a Participating Special District for both this Agreement and the Teva Global Opioid Settlement Agreement, or neither. However, if Teva enters bankruptcy prior to the Effective Date, a Litigating Special District or Later Litigating Special District can choose to only join this Agreement. Except for trials begun before the Initial Participation Date, a Litigating Special District or a Later Litigating Special District may not become a Participating Special District after the completion of opening statements in a trial of a legal action it brought that includes a Released Claim against a Released Entity.
L. Initial Participating Special Districts. A Special District qualifies as an Initial Participating Special District if it meets the applicable requirements for becoming a Participating Special District set forth in subsections IX.J or IX.K by the Initial Participation Date. Provided however, all Special District Settlement Participation Forms shall be held by the Implementation Administrator until Allergan provides the notice in subsection X.B that it intends to proceed with the settlement, at which time the obligations created by such forms become effective.
M. Later Participating Special Districts. A Special District that is not an Initial Participating Special District may become a Later Participating Special District by meeting the applicable requirements for becoming a Participating Special District after the Initial Participation Date and agreeing to be subject to the terms of a State-Subdivision Agreement (if any) or any other structure adopted or applicable pursuant to subsections VIII.E or VIII.F. or any agreement reached by the applicable Settling State with Initial Participating Special Districts. The following provisions govern what a Later Participating Special District can receive (but do not apply to Initial Participating Special Districts):
1. Except for the Initial Year Payment, a Later Participating Special District shall not receive any share of any Base or Incentive Payments paid to the Subdivision Fund that were due before it became a Participating Special District.
2. A Later Participating Special District that becomes a Participating Special District after Initial Participation Date but before June 15, 2023 shall receive 75% of the share of the Initial Year Payment that it would have received had it become an Initial Participating Special District (unless the Later Participating Special District is subject to subsections IX.M.3 or IX.M.4 below). A Later Participating Special 49 February 8, 2023
District that becomes a Participating Special District after June 15, 2023 shall receive no share of the Initial Year Payment.
3. A Later Participating Special District that, after the Initial Participation Date, maintains a lawsuit for a Released Claim(s) against a Released Entity and has judgment entered against it on every such Claim before it became a Participating Special District (other than a consensual dismissal with prejudice) shall receive 50% of the share of future Base Payments or Incentive Payments that it would have received had it become a Later Participating Special District prior to such judgment; provided, however, that if the Special District appeals the judgment and the judgment is affirmed with finality before the Special District becomes a Participating Special District, the Special District shall not receive any share of any Base Payments or Incentive Payments.
4. A Later Participating Special District that becomes a Participating Special District while a Bar or Case-Specific Resolution involving a different Special District exists in its State shall receive 25% of the share of future Base Payments or Incentive Payments that it would have received had it become a Later Participating Special District without such Bar or Case-Specific Resolution.
X. Condition to Effectiveness of Agreement and Filing of Consent Judgment A. Determination to Proceed With Settlement. Allergan will determine on or before the Reference Date whether there has been a sufficient resolution of the Claims of the Subdivisions and Special Districts in the Settling States (through participation under Section IX, Case-Specific Resolution(s), and Bar(s)) to proceed with this Agreement. The determination shall be in the sole discretion of Allergan, in good faith, and may be based on any criteria or factors deemed relevant by Allergan.
B. Notice by Allergan. On or before the Reference Date, Allergan shall inform the Settling States and MDL Plaintiffs’ Executive Committee of its determination pursuant to subsection X.A. If Allergan determines to proceed, the Parties will proceed to file the Consent Judgments. If Allergan determines not to proceed, this Agreement will have no further effect and all releases (including those given by Participating Subdivisions and Participating Special Districts) and other commitments or obligations contained herein will be void and Settlement Participation Forms returned to the Subdivision or Special District or destroyed to the extent not prohibited by then existing legal obligations or document holds.
XI. Potential Payment Adjustments
A. Settlement Class Resolution Opt Outs. If a Settling State is eligible for Incentive A on the basis of a Settlement Class Resolution, and a Primary Subdivision that opted out of the Settlement Class Resolution maintains a lawsuit asserting a Released Claim against a Released Entity, the following shall apply. If the lawsuit asserting a Released Claim either survives a Threshold Motion or has an unresolved Threshold Motion fewer than sixty (60) days prior to the scheduled start of a trial involving a Released Claim, and is resolved with 50 February 8, 2023
finality on terms requiring payment by the Released Entity, Allergan shall receive a dollarfor-dollar offset for the amount paid against its obligation to make remaining Incentive A payments that would be apportioned to that State or Participating Subdivisions listed on Exhibit G.
B. Revoked Bar, Settlement Class Resolution, or Case-Specific Resolution.
1. If Allergan made a payment as a result of the existence of a Bar, Settlement Class Resolution, or Case-Specific Resolution in a Settling State, and that Bar, Settlement Class Resolution, or Case-Specific Resolution is subject to a Revocation Event, Allergan shall receive a dollar-for-dollar offset against its obligation to make remaining payments that would be apportioned to that State or Participating Subdivisions or Participating Special Districts listed on Exhibit G. This offset will be calculated as the dollar amount difference between (1) the total amount of Incentive Payments paid by Allergan during the time the Bar, Settlement Class Resolution, or Case-Specific Resolution subject to the Revocation Event was in effect, and (2) the total amount of Incentive Payments that would have been due from Allergan during that time without the Bar, Settlement Class Resolution, or Case-Specific Resolution subject to the Revocation Event being in effect. The amount of Incentive Payments that would have been due, referenced in (2) above, will be calculated based on considering any Subdivision or Special District that provides a release within one hundred eighty (180) days after the Revocation Event as having been a Participating Subdivision or Participating Special District (in addition to all other Participating Subdivisions and Participating Special Districts) during the time that the Bar, Settlement Class Resolution, or Case-Specific Resolution subject to the Revocation Event was in effect. If a Revocation Event causes a Settling State to no longer qualify for one or both parts of Incentive D, the Settling State and its Exhibit G participants shall return to Allergan all relevant payments made under Incentive D through offsets as set forth above.
2. Notwithstanding anything to the contrary in paragraph 1 above, if a Bar or CaseSpecific Resolution is reinstated by the Settling State, either through the same or different means as the initial Bar or Case-Specific Resolution, Allergan’s right to an offset is extinguished and any amounts withheld to offset amounts paid on account of the revoked, rescinded, reversed, or overruled Bar or Case-Specific Resolution shall be returned to the Settling State, less and except any Incentive Payments that would have been paid during the period in which the Bar or CaseSpecific Resolution was revoked, rescinded, reversed, or overruled.
XII. Additional Restitution Amount
A. Additional Restitution Amount. Allergan shall pay an Additional Restitution Amount to each Settling State listed in Exhibit N in the amount and on the schedule set forth in Exhibit M. The maximum Additional Restitution Amount of $16,192,680.76 shall be reduced by the allocation set forth on Exhibit N for any Non-Settling States listed on Exhibit N. The Settlement Fund Administrator shall allocate such funds among and within the Settling 51 February 8, 2023
States listed in Exhibit N at the same time as its allocation of Annual Payments pursuant to Section VII.B.
B. Additional Restitution Amount funds shall not be subject to allocation as provided in Sections VIII.D through VIII.F
XIII. Plaintiffs’ Attorneys’ Fees and Costs
A. Attorneys’ fees and costs are addressed in the following exhibits and are incorporated herein by reference:
1. The State Outside Counsel Fee Fund is addressed in Exhibit U.
2. The State Cost Fund is addressed in Exhibit S.
3. The Attorney Fee and Cost Fund is addressed and the Agreement on Attorneys’ Fees, Expenses and Costs is set forth in Exhibit R.
XIV. Enforcement and Dispute Resolution
A. Enforceability. The terms of the Agreement and Consent Judgment applicable to or in a Settling State will be enforceable solely by that Settling State and Allergan. Settling States or Participating Subdivisions shall not have enforcement rights with respect either to the terms of this Agreement that apply only to or in other States or to any Consent Judgment entered into by another Settling State. Participating Subdivisions shall not have enforcement rights against Allergan with respect to the Agreement or any Consent Judgment except as to payments that would be allocated to the Subdivision Fund or Abatement Accounts Fund pursuant to Section VII; provided, however, that each Settling State shall allow Participating Subdivisions in that State to notify it of any perceived violations of the Agreement or Consent Judgment.
B. Consent to Jurisdiction and Service of Process. Allergan consents to the jurisdiction of the Court in which the Consent Judgment is filed, and any appellate court thereof, limited to resolution of disputes identified in subsection XIV.G.2; for a civil action for any appropriate relief to enforce compliance with the Parties’ Agreement for Injunctive Relief pursuant to Exhibit P, Section K.5 herein; and for any proceedings for or related to the enforcement or collection of any payments on the Consent Judgment for resolution in the Court in which the Consent Judgment is filed. Allergan further agrees any service of process or notice required for such action or proceeding may be effectuated on Allergan through delivery of all required papers by hand or by a nationally recognized private courier on Allergan’s representatives identified in Section XVI.P herein. To be clear, for the purposes of this Agreement only, Allergan consents to personal jurisdiction before such courts, and will not contend service must be effectuated through personal service of the Hague Convention process.
C. Specific Terms Dispute Resolution.
52 February 8, 2023
1. Any dispute that is addressed by the provisions set forth in the Injunctive Relief Terms in Exhibit P shall be resolved as provided therein and pursuant to Section VIII.E.3 herein.
2. In the event Allergan believes the 85% threshold established in subsection VIII.B is not being satisfied, any Party may request that Allergan and the Enforcement Committee meet and confer regarding the use of funds under subsection VIII.B.
The completion of such meet-and-confer process is a precondition to further action regarding any such dispute. Further action concerning subsection VIII.B shall: (i) be limited to Allergan seeking to reduce its Annual Payments by no more than 5% of the difference between the actual amount of Opioid Remediation and the 85% threshold established in subsection VIII.B; (ii) only reduce Annual Payments to those Settling States and its Participating Subdivisions that are below the 85% threshold established in subsection VIII.B; and (iii) not reduce Annual Payments restricted to future Opioid Remediation.
D. State-Subdivision Enforcement.
1. A Participating Subdivision shall not have enforcement rights against a Settling State in which it is located with respect to the Agreement or any Consent Judgment except: (1) as provided for in a State-Subdivision Agreement, Allocation Statute, or Statutory Trust with respect to intrastate allocation; or (2) in the absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust, as to allegations that: (a) the Settling State’s use of Abatement Accounts Fund monies were not used for uses similar to or in the nature of those uses contained in Exhibit E; or (b) a Settling State failed to pay funds directly from the Abatement Accounts Fund to a Participating Subdivision eligible to receive a block grant pursuant to subsection VIII.F.2.b.
2. A Settling State shall have enforcement rights against a Participating Subdivision located in its territory: (1) as provided for in a State-Subdivision Agreement, Allocation Statute, or Statutory Trust; or (2) in the absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust, as to allegations that the uses of Abatement Accounts Fund monies by Participating Subdivisions listed on Exhibit G were not for uses similar to or in the nature of those uses contained in Exhibit E.
3. As between Settling States and Participating Subdivisions, the above rights are contractual in nature and nothing herein is intended to limit, restrict, change, or alter any other existing rights under law.
E. Enforcement Committee Actions to Enforce Agreement.
1. The Parties agree that in the event of any failure by Allergan to make any required payments under this Agreement, the Enforcement Committee, on its own or through its designee such as a Settling State or Participating Subdivision acting by its authorization and on its behalf, shall have the ability and right to file an action or proceeding in any New York state court, or federal court of the United States of 53 February 8, 2023
America, sitting in New York, for or related to the enforcement or collection of such payments.
2. If any National Dispute involving a Settling State, Participating Subdivision, and/or Allergan is pending before a National Arbitration Panel concerning a given year’s payment to all Settling States, any action or proceeding pursuant to this subsection XIV.E shall be stayed as to any disputed amounts only, but may proceed as to any and all undisputed amounts. In the event there is a dispute between the Parties as to the disputed amounts at issue, the Enforcement Committee or any party to that dispute may seek an expedited determination from the National Arbitration Panel for that proceeding as to the disputed and undisputed amounts.
3. The Parties further Agree that in the event of Allergan’s breach of the Parties’ Agreement for Injunctive Relief (Exhibit P attached hereto), the Enforcement Committee, on its own or through a single designee such as a Settling State shall have the ability and right to file a civil action pursuant to Exhibit P, after completing the processes laid out in Exhibit P, in any New York state court, or federal court of the United States of America, sitting in New York, seeking any appropriate relief to enforce compliance with such Agreement for Injunctive Relief.
4. Allergan and other Released Entities consent to the jurisdiction of the New York state court, or federal court of the United States of America, sitting in New York, and any appellate court from any thereof, in which any action or proceeding is initiated pursuant to this subsection XIV.E, and for enforcement or collection of any related judgment entered by such court. Allergan further agrees any service of process or notice required for such action or proceeding, including for any action or proceeding for enforcement or collection of any judgment entered thereon, may be effectuated on Allergan through delivery of all required papers by hand or by a nationally recognized private courier on Allergan’s representatives identified in Section XVI.P herein. For the purposes of this Agreement only, Allergan consents to personal jurisdiction before such courts and will not contend service must be effectuated through personal service or the Hague Convention process.
5. The enforcement rights under this subsection XIV.E are in addition to, and not in lieu of, any other enforcement and collection rights of the Parties herein, including but not limited to enforcement rights as to payments as allowed by subsection XV.A.
F. Subdivision Payment Enforcement. A Participating Subdivision shall have the same right as a Settling State pursuant to subsection XIV.G.4.a(iv) to seek resolution of any failure by Allergan to make its required Base Payments and/or Incentive Payments in a Payment Year.
G. Other Dispute Resolution Terms.
1. Except as provided in subsection VIII.C, the parties to a dispute shall promptly meet and confer in good faith to resolve any dispute prior to any filing or 54 February 8, 2023
presentation to the Court or National Arbitration Panel. If the parties cannot resolve the dispute informally, and unless otherwise agreed in writing, they shall follow the remaining provisions of this Section XIV to resolve the dispute.
2. Except as provided in subsections XIV.C and XIV.G.4, disputes not resolved informally shall be resolved in either the Court that entered the relevant Consent Judgment or, if no Consent Judgment was entered, a state or territorial court with jurisdiction located wherever the seat of state government is located. State court proceedings shall be governed by the rules and procedures of the forum. For the avoidance of doubt, disputes to be resolved in state court include, but are not limited to, the following:
a. disputes concerning whether expenditures qualify for Opioid Remediation; b. disputes between a Settling State and Participating Subdivisions located in such Settling State as provided by subsection XIV.D, except to the extent the State-Subdivision Agreement provides for other dispute resolution mechanisms. For the avoidance of doubt, disputes between a Settling State and any Participating Subdivision shall not be considered National Disputes;
c. whether this Agreement and relevant Consent Judgment are binding under state law;
d. the extent of the Attorney General’s or other participating entity’s authority under state law, including the extent of the authority to release Claims; e. whether the requirements of a Bar, a Case-Specific Resolution, StateSpecific Finality, Later Litigating Subdivision, Litigating Subdivision, or a Threshold Motion have been met; and
f. all other disputes not specifically identified in subsections XIV.C and XIV.G.4.
3. Any Party may request that the National Arbitration Panel provide an interpretation of any provision of the settlement that is relevant to the state court determination, and the National Arbitration Panel shall make reasonable best efforts to supply such interpretation within the earlier of thirty (30) days or the time period required by the state court proceedings. Any Party may submit that interpretation to the state court to the extent permitted by, and for such weight provided by, the state court’s rules and procedures. If requested by a Party, the National Arbitration Panel shall request that its interpretation be accepted in the form of an amicus curiae brief, and any attorneys’ fees and costs for preparing any such filing shall be paid for by the requesting Party.
4. National Disputes involving a Settling State, Participating Subdivision, and/or Allergan shall be resolved by a National Arbitration Panel. 55 February 8, 2023
a. “National Disputes” are disputes that are exceptions to subsection XIV.G.2’s presumption of resolution in state courts because they involve issues of interpretation of Agreement terms applicable to all Settling States without reference to a particular State’s law. Disputes between a State and any Participating Subdivisions shall not be considered National Disputes.
National Disputes are limited to the following:
(i) the amount of offset and/or credit attributable to Non-Settling States;
(ii) issues involving the scope and definition of “Product”; (iii) interpretation and application of the terms “Covered Conduct” and “Released Entities”;
(iv) disputes over a given year’s Annual Payment or the payment of the Additional Restitution Amount to all Settling States (for the avoidance of doubt, disputes between a Settling State and Allergan over the amounts owed to only that State shall not be considered National Disputes);
(v) questions regarding the performance and/or removal of the Settlement Fund Administrator;
(vi) disputes involving liability of successor entities; (vii) disputes that require a determination of sufficient Subdivision and Special District participation to qualify for Incentives A, B, C, or D,; (viii) disputes that require interpretation of Agreement terms (i) that concretely affect four (4) or more Settling States; and (ii) do not turn on unique definitions and interpretations under State law; and (ix) any dispute subject to resolution under subsection XIV.G.2 but for which all parties to the dispute agree to arbitration before the National Arbitration Panel under the provisions of this subsection XIV.G.4.
b. The “National Arbitration Panel” shall be comprised of three (3) neutral arbitrators. One (1) arbitrator shall be chosen by Allergan, one (1) arbitrator shall be chosen by the Enforcement Committee with due input from Participating Subdivisions, and the third arbitrator shall be agreed upon by the first two (2) arbitrators. The membership of the National Arbitration Panel is intended to remain constant throughout the term of this Agreement, but in the event that replacements are required, the retiring arbitrator shall be replaced by the party that selected him/her.
56 February 8, 2023
(i) The National Arbitration Panel shall make reasonable best efforts to decide all matters within one hundred eighty (180) days of filing, and in no event shall it take longer than one (1) year. (ii) The National Arbitration Panel shall conduct all proceedings in a reasonably streamlined process consistent with an opportunity for the parties to be heard. Issues shall be resolved without the need for live witnesses where feasible, and with a presumption in favor of remote participation to minimize the burdens on the parties. (iii) To the extent allowed under state law, a Settling State, Participating Subdivision, and (at any party’s request) the National Arbitration Panel may certify to an appropriate state court any question of state law. The National Arbitration Panel shall be bound by a final state court determination of such a certified question. The time period for the arbitration shall be tolled during the course of the certification process.
(iv) The arbitrators will give due deference to any authoritative interpretation of state law, including any declaratory judgment or similar relief obtained by a Settling State, Participating Subdivision, or Allergan on a state law issue.
(v) The decisions of the National Arbitration Panel shall be binding on Settling States, Participating Subdivisions, Allergan, and the Settlement Fund Administrator. In any proceeding before the National Arbitration Panel involving a dispute between a Settling State and Allergan whose resolution could prejudice the rights of a Participating Subdivision(s) or Participating Special District(s) in that Settling State, such Participating Subdivision(s) or Participating Special District(s) shall be allowed to file a statement of view in the proceeding.
c. Nothing herein shall be construed so as to limit or otherwise restrict a State from seeking injunctive or other equitable relief in state court to protect the health, safety, or welfare of its citizens.
d. Each party shall bear its own costs in any arbitration or court proceeding arising under this subsection XIV.G. The costs for the arbitrators on the National Arbitration Panel shall be divided and paid equally by the disputing sides for each individual dispute, e.g., a dispute between Allergan and Settling States/Participating Subdivisions shall be split 50% by Allergan and 50% by the Settling States/Participating Subdivisions that are parties to the dispute; a dispute between a Settling State and a Participating Subdivision shall be split 50% by the Settling State and 50% by any Participating Subdivisions that are party to the dispute. 57 February 8, 2023
5. Prior to initiating an action to enforce pursuant to this subsection XIV.G, the complaining party must:
a. Provide written notice to the Enforcement Committee of its complaint, including the provision of the Consent Judgment and/or Agreement that the practice appears to violate, as well as the basis for its interpretation of the disputed provision. The Enforcement Committee shall establish a reasonable process and timeline for obtaining additional information from the involved parties; provided, however, that the date the Enforcement Committee establishes for obtaining additional information from the parties shall not be more than forty-five (45) days following the notice. The Enforcement Committee may advise the involved parties of its views on the complaint and/or seek to resolve the complaint informally. b. Wait to commence any enforcement action until thirty (30) days after the date that the Enforcement Committee establishes for obtaining additional information from the involved parties.
6. If the parties to a dispute cannot agree on the proper forum for resolution of the dispute under the provisions of subsections XIV.G.2 or XIV.G.4, a committee comprising the Enforcement Committee and sufficient representatives of Allergan such that the members of the Enforcement Committee have a majority of one (1) member will determine the forum where the dispute will be initiated within twentyeight (28) days of receiving notification of the dispute relating to the proper forum.
The forum identified by such committee shall be the sole forum for determining where the dispute shall be heard, and the committee’s identification of such forum shall not be entitled to deference by the forum selected.
H. No Effect. Nothing in this Agreement shall be interpreted to limit the Settling State’s Civil Investigative Demand (“CID”) or investigative subpoena authority, to the extent such authority exists under applicable state law and the CID or investigative subpoena is issued pursuant to such authority, and Allergan reserves all of its rights in connection with a CID or investigative subpoena issued pursuant to such authority.
XV. Judgment and Settlement Set-Off Related to Teva
A. The Parties recognize that some of the Settling States, Participating Subdivisions, and Participating Special Districts are pursuing Claims against Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates. If any of them achieves a judgment by verdict, judicial decision, or means other than settlement against any of Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates, each plaintiff listed above shall represent and agree that any payment(s) that the Settling States, Participating Subdivisions, and Participating Special Districts or their counsel receives from Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates 58 February 8, 2023
reflects the amount over and above 56% of the amount they or their counsel received from the Global Settlement Amount due under this Agreement that each and all of them deem to reflect a fair overall settlement value for liability attributable to the generic opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and/or other Divested Entities and/or attributable to the operation of the Divested Actavis Generic Entities and/or other Divested Entities related to those generic opioid drugs that are Products before August 2, 2016.
B. The Settling States, Participating Subdivisions, and Participating Special Districts may reach a settlement agreement with Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates that resolves some or all of their respective Claims. In that event, the Releasors represent and agree that any payment(s) that the Settling States, Participating Subdivisions, and Participating Special Districts or their counsel receives from Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates reflects the amount over and above 56% of the amount they or they counsel received from the Global Settlement Amount due under this Agreement that each and all of them deem to reflect a fair overall settlement value for liability attributable to the generic opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and/or other Divested Entities and/or attributable to the operation of the Divested Actavis Generic Entities and/or other Divested Entities related to those generic opioid drugs that are Products before August 2, 2016. In any such settlement agreement with Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates, the Settling States, Participating Subdivisions, and Participating Special Districts agree that the agreed settlement amount reflects the value the parties to the agreement deem a fair settlement value over and above the payments made or due to be paid under the Allergan Public Global Opioid Settlement Agreement for generic opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and/or other Divested Entities and/or relate to the operation of Divested Actavis Generic Entities and other Divested Entities related to those generic opioid drugs that are Products before August 2, 2016.
XVI. Miscellaneous
A. No Admission. Allergan does not admit liability or wrongdoing. Neither this Agreement nor the Consent Judgments shall be considered, construed, or represented to be (1) an admission, concession, or evidence of liability or wrongdoing or (2) a waiver or any limitation of any defense otherwise available to Allergan.
B. Population of Subdivisions. The population figures for Subdivisions shall be the published U.S. Census Bureau’s population estimates for July 1, 2019, released May 2020. These population figures shall remain unchanged during the term of this Agreement.
C. Population of Special Districts. For any purpose in this Agreement in which the population of a Special District is used: (a) School Districts’ population will be measured by the 59 February 8, 2023
number of students enrolled who are eligible under the Individuals with Disabilities Education Act (“IDEA”) or Section 504 of the Rehabilitation Act of 1973; (b) Health Districts’ and Hospital Districts’ population will be measured at 25% of discharges; and (c) all other Special Districts’ (including Fire Districts’ and Library Districts’) population will be measured at 10% of the population served.
D. Population Associated with Sheriffs. For any purpose in this Agreement in which the population associated with a lawsuit by a sheriff is used, the population will be measured at 20% of the capacity of the jail(s) operated by the sheriff.
E. Most-Favored-Nation Provision.
1. If Allergan enters into any settlement agreement with any Non-Settling State after November 23, 2022 that resolves Claims similar in scope to the Claims released by a Settling State under this Agreement on overall payment terms that are more favorable to such Non-Settling State on a net present value basis (calculated with a 7% discount rate) on overall payment terms the Non-Settling State would have received under this Agreement based on the same level of participation, then the Settling States, individually or collectively, may elect to seek review, pursuant to Section XVI.E.3, of the overall payment terms of this Agreement and the NonSettling State agreement so that the Settling State(s) may obtain, with respect to Allergan, overall payment terms at least as favorable as those obtained by such Non-Settling State. “Overall payment terms” refers to consideration of all payment terms of the two agreements, taken together, including, but not limited to the amount of payments, the timing of payments, and conditions or contingencies on payments.
2. For any settlement with a Non-Settling State involving Released Claims, Allergan shall provide the Enforcement Committee with a copy of the settlement agreement or relevant Consent Judgment within thirty (30) calendar days of the consummation of such settlement. The Enforcement Committee will promptly distribute such copy to all Settling States.
3. In the event that one or more Settling State(s) believes that the overall payment terms of an agreement by Allergan with a Non-Settling State are more favorable to the Non-Settling State, when compared based on the totality of the considerations set forth in Section XVI.E.1, the Settling State(s) and Allergan shall engage in the following process:
a. The Settling State(s) shall provide notice, within sixty (60) calendar days of the date on which a settlement agreement or Consent Judgment is provided to the Enforcement Committee, to Allergan of its intent to seek revision of this Agreement to provide payment terms that are, on an overall basis, as favorable as those obtained by the Non-Settling State. Such notice shall be confidential and not disclosed publicly to the extent allowed by law and shall state, in detail, the basis for the Settling State’s belief that it is entitled to a revision of the Agreement.
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b. Allergan shall, within thirty (30) calendar days, provide a response to the Settling State(s), explaining its position, in detail, as to whether the Settling State(s) is entitled to more favorable overall payment terms than those provided for in this Agreement.
c. In the event the Settling State(s) and Allergan do not reach agreement as to the application of Section XVI.E.1, the Settling State(s) may petition the National Arbitration Panel to seek a ruling from the Panel as to the applicability of Section XVI.E.1, provided that the Settling State(s) may seek such review only if at least five (5) Settling States co-sign the petition.
The Panel shall consider submissions and argument by the parties pursuant to the procedures set forth in Section XIV.G.4.
d. The Settling State(s) and Allergan shall be bound by the determination of the National Arbitration Panel.
4. This Section XVI.E does not apply to, and there is no ability of any Settling State to seek or obtain revision of this Agreement based on, any Non-Settling State agreement with Allergan that is entered into: (a) either the earlier of (i) after the close of expert discovery or (ii) after a date ninety (90) calendar days prior to the scheduled start date of a trial between Allergan and the Non-Settling State or any severed or bifurcated portion thereof, provided that, where, in order to complete a settlement, a Non-Settling State and Allergan jointly request an adjournment of the scheduled start date of a trial within ninety (90) days of that date, this exception will apply as if the trial date had not been adjourned; (b) with a Non-Settling State that previously litigated to judgment a case related to opioids against any manufacturer, distributor, or pharmacy; or (c) the earlier of (i) after a Non-Settling State has obtained any court order or judicial determination that grants judgment (in whole or in part) against Allergan in the Non-Settling State’s case, (ii) after a sanctions ruling against Allergan in the Non-Settling State’s case against Allergan; or (iii) after any ruling has issued in the Non-Settling State’s case against any manufacturer, distributor, or pharmacy on the issue of joint and several liability.
The National Arbitration Panel shall have no power to review agreements that satisfy any of the conditions described in this paragraph.
5. This Section does not apply to, and there is no ability of any Settling State to seek or obtain revision of this Agreement based on, any agreement between Allergan and (a) federally-recognized tribe(s),(b) Non-Participating Subdivisions or (3) Non-Participating Special Districts. This Section XVI.E will not apply to any agreement entered into more than six (6) months after the Reference Date.
F. Tax Reporting and Cooperation.
1. The Parties agree that, unless otherwise required by law, Allergan’s payment of the Compensatory Restitution Amount (after all applicable offsets) payable by Allergan shall be directed to Opioid Remediation for restitution of Alleged Harms allegedly caused by Allergan. By executing this Agreement (or the Settlement 61 February 8, 2023
Participation Form and thereby becoming a signatory to this Agreement), each Settling State, Participating Subdivision, and Participating Special District certify that: (1) the entity suffered Alleged Harms allegedly caused by Allergan; (2) the Compensatory Restitution Amount to be paid by Allergan to the entity represent an amount that is less than or equal to the actual monetary damage allegedly caused by Allergan; and (3) the entity shall use such payments for the sole purpose of Opioid Remediation.
2. Upon request by Allergan, the Settling States, Participating Subdivisions, and Participating Special Districts agree to perform such further acts and to execute and deliver such further documents as may be reasonably necessary for Allergan to establish the statements set forth in subsection VIII.G to the satisfaction of their tax advisors, their independent financial auditors, the Internal Revenue Service, or any other governmental authority, including as contemplated by Treasury Regulations Section 1.162-21(b)(3)(ii) and any subsequently proposed or finalized relevant regulations or administrative guidance.
3. Without limiting the generality of subsection XVI.F, each Settling State, Participating Subdivision, and Participating Special District shall cooperate in good faith with Allergan with respect to any tax claim, dispute, investigation, audit, examination, contest, litigation, or other proceeding relating to this Agreement.
4. The Designated State, on behalf of all Settling States, Participating Subdivisions, and Participating Special Districts, shall designate one of its officers or employees to act as the “appropriate official” within the meaning of Treasury Regulations Section 1.6050X-1(f)(1)(ii)(B) (the “Appropriate Official”).
5. Neither Allergan nor the Settling States, Participating Subdivisions, and Participating Special Districts make any warranty or representation to any Settling jurisdiction or Releasor as to the tax consequences of the payment of the Compensatory Restitution Amount (or any portion thereof).
G. No Third-Party Beneficiaries. Except as expressly provided in this Agreement, no portion of this Agreement shall provide any rights to, or be enforceable by, any person or entity that is not a Settling State or Released Entity. No Settling State may assign or otherwise convey any right to enforce any provision of this Agreement.
H. Calculation. Any figure or percentage referred to in this Agreement shall be carried to seven decimal places.
I. Construction. None of the Parties and no Participating Subdivision shall be considered to be the drafter of this Agreement or of any of its provisions for the purpose of any statute, case law, or rule of interpretation or construction that would or might cause any provision to be construed against the drafter of this Agreement. The headings of the provisions of this Agreement are not binding and are for reference only and do not limit, expand, or otherwise affect the contents or meaning of this Agreement. 62 February 8, 2023
J. Cooperation. Each Party and each Participating Subdivision agrees to use its best efforts and to cooperate with the other Parties and Participating Subdivisions to cause this Agreement and the Consent Judgments to become effective, to obtain all necessary approvals, consents and authorizations, if any, and to execute all documents and to take such other action as may be appropriate in connection herewith. Consistent with the foregoing, each Party and each Participating Subdivision agrees that it will not directly or indirectly assist or encourage any challenge to this Agreement or any Consent Judgment by any other person, and will support the integrity and enforcement of the terms of this Agreement and the Consent Judgments.
K. Entire Agreement. This Agreement, its exhibits and any other attachments, including the attorneys’ fees and cost agreement in Exhibit R, embodies the entire agreement and understanding between and among the Parties and Participating Subdivisions relating to the subject matter hereof and supersedes (1) all prior agreements and understandings relating to such subject matter, whether written or oral and (2) all purportedly contemporaneous oral agreements and understandings relating to such subject matter.
L. Execution. This Agreement may be executed in counterparts and by different signatories on separate counterparts, each of which shall be deemed an original, but all of which shall together be one and the same Agreement. One or more counterparts of this Agreement may be delivered by facsimile or electronic transmission with the intent that it or they shall constitute an original counterpart hereof. One or more counterparts of this Agreement may be signed by electronic signature.
M. Good Faith and Voluntary Entry. Each Party warrants and represents that it negotiated the terms of this Agreement in good faith. Each of the Parties and signatories to this Agreement warrants and represents that it freely and voluntarily entered into this Agreement without any degree of duress or compulsion. The Parties state that no promise of any kind or nature whatsoever (other than the written terms of this Agreement) was made to them to induce them to enter into this Agreement.
N. No Prevailing Party. The Parties each agree that they are not the prevailing party in this action, for purposes of any Claim for fees, costs, or expenses as prevailing parties arising under common law or under the terms of any statute, because the Parties have reached a good faith settlement. The Parties each further waive any right to challenge or contest the validity of this Agreement on any ground, including, without limitation, that any term is unconstitutional or is preempted by, or in conflict with, any current or future law.
O. Non-Admissibility. The settlement negotiations resulting in this Agreement have been undertaken by the Parties and by certain representatives of the Participating Subdivisions in good faith and for settlement purposes only, and no evidence of negotiations or discussions underlying this Agreement shall be offered or received in evidence in any action or proceeding for any purpose. This Agreement shall not be offered or received in evidence in any action or proceeding for any purpose other than in an action or proceeding arising under or relating to this Agreement or in any litigation or arbitration concerning Allergan’s right to coverage under an insurance contract. 63 February 8, 2023
P. Notices. All notices or other communications under this Agreement shall be in writing (including but not limited to electronic communications) and shall be given to the recipients indicated below:
1. For the Attorney(s) General:
Josh Stein, Attorney General
North Carolina Department of Justice
Attn: Daniel Mosteller
PO Box 629
Raleigh, NC 27602
[email protected]
Tom Miller, Attorney General
Office of the Attorney General of Iowa
Attn: Nathan Blake
1305 E. Walnut St.
Des Moines, IA 50319
Jonathan Skrmetti, Attorney General
Office of the Tennessee Attorney General
Attn: Michael Leftwich
P.O. Box 20207
Nashville, TN, 37202-0207
2. For the Plaintiffs’ Executive Committee:
Paul F. Farrell
Farrell Law
P.O. Box 1180
Huntington, WV 25714-1180
Jayne Conroy
Simmons Hanly Conroy LLC
112 Madison Avenue, 7th Floor
New York, NY 10016-7416
[email protected]
Joseph F. Rice
Motley Rice LLC
28 Bridgeside Blvd.
Mount Pleasant, SC 29464
[email protected]
Peter Mougey
Levin Papantonio Rafferty
64 February 8, 2023
316 South Baylen St.
Pensacola, FL 32502
[email protected]
Paul J. Geller
Robbins Geller Rudman & Dowd LLP
120 East Palmetto Park Road
Boca Raton, FL 33432
[email protected]
Steven Skikos
Skikos, Crawford, Skikos & Joseph, LLC
One Sansom Street, Suite 2830
San Francisco, CA 94104
[email protected]
3. For Allergan:
Office of General Counsel
One North Waukegan Road
North Chicago, IL 60064
Copy to Allergan’s attorneys at:
James F. Hurst, P.C.
Kirkland & Ellis LLP
300 North LaSalle
Chicago, IL 60654
[email protected]
Any Party or the Plaintiffs’ Executive Committee may change or add the contact information of the persons designated to receive notice on its behalf by notice given (effective upon the giving of such notice) as provided in this subsection.
Q. No Waiver. The waiver of any rights conferred hereunder shall be effective only if made by written instrument executed by the waiving Party or Parties. The waiver by any Party of any breach of this Agreement shall not be deemed to be or construed as a waiver of any other breach, whether prior, subsequent, or contemporaneous, nor shall such waiver be deemed to be or construed as a waiver by any other Party.
R. Preservation of Privilege. Nothing contained in this Agreement or any Consent Judgment, and no act required to be performed pursuant to this Agreement or any Consent Judgment, is intended to constitute, cause, or effect any waiver (in whole or in part) of any attorneyclient privilege, work product protection, or common interest/joint defense privilege, and each Party agrees that it shall not make or cause to be made in any forum any assertion to the contrary.
S. Successors
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1. The Agreement shall be binding upon, and insure to the benefit of, Allergan and its respective successors and assigns.
2. Prior to Allergan’s last Payment Date, Allergan shall not sell the majority of its voting stock or substantially all its assets without obtaining the acquiror’s agreement that it will constitute a successor with respect to Allergan’s obligations under this Agreement.
3. Prior to Allergan’s last Payment Date, Allergan shall not in one (1) transaction, or a series of related transactions, sell, or transfer assets (other than sales or transfers of inventories, or sales or transfers to an entity owed directly or indirectly by Allergan) having a fair market value equal to twenty-five percent (25%) or more of the consolidated assets of Allergan where the sale or transfer transaction is announced after the Reference Date, is not for fair consideration, and would foreseeably and unreasonably jeopardize Allergan’s ability to make the payments under this Agreement that are due on or before the third Payment Date following the close of a sale or transfer transaction. The above restriction shall not apply if Allergan obtains the acquiror’s agreement that it will be either a guarantor of or successor to the percentage of Allergan’s remaining Payment Obligations under this Agreement equal to the percentage of Allergan’s consolidated assets being sold or transferred in such transaction. Percentages under this section shall be determined in accordance with the United States generally accepted accounting principles and as of the date of Allergan’s most recent publicly filed consolidated balance sheet prior to the date of entry into the sale or transfer agreement at issue.
This Section XVI.S.3 shall be enforceable solely by the Enforcement Committee, and any objection under this Section X.VI.S.3 not raised within twenty (20) calendar days from the date that Allergan transmits notice of the transaction to the Enforcement Committee is waived. Any dispute under this Section XVI.S.3 shall be a National Dispute as described in Section XIV.G and must be raised exclusively with the National Arbitration Panel as described therein within twenty (20) calendar days of the announcement, and the sole remedy shall be an order enjoining the transaction.
T. Modification, Amendment, Alteration. After the Reference Date, any modification, amendment, or alteration of this Agreement by the Parties shall be binding only if evidenced in writing signed by Allergan along with the signatures of at least thirty-seven (37) of those then-serving Attorneys General of the Settling States along with a representation from each Attorney General that either: (1) the advisory committee or similar entity established or recognized by that Settling State (either pursuant to subsection VIII.F.2, by a State-Subdivision Agreement, or by statute) voted in favor of the modification, amendment, or alteration of this Agreement including at least one Participating Subdivision-appointed member; or (2) in States without any advisory committee, that 50.1% of the Participating Subdivisions by population expressed approval of the modification, amendment, or alteration of this Agreement in writing. Provided, however, in the event the modification, amendment, or alteration relates to injunctive relief, interstate allocation between the Settling States, intrastate allocation in a particular Settling State, or fees or costs of Settling States and Participating Subdivisions, then every Settling 66 February 8, 2023
State and each Participating Subdivision affected by that modification, amendment, or alteration must assent in writing. Provided further that, in the event the modification, amendment, or alteration relates to injunctive relief, then such amendment, modification, or alteration of injunctive relief against Allergan will not be effective unless and until any Consent Judgment is modified by a court of competent jurisdiction, except as otherwise provided by the Injunctive Terms.
U. Termination.
1. Unless otherwise agreed to by Allergan and the Settling State in question, this Agreement and all of its terms (except subsection XVI.O and any other nonadmissibility provisions, which shall continue in full force and effect) shall be canceled and terminated with respect to the Settling State, and the Agreement and all orders issued by the courts in the Settling State pursuant to the Agreement shall become null and void and of no effect if one or more of the following conditions applies:
a. A Consent Judgment approving this Agreement without modification of any of the Agreement’s terms has not been entered as to the Settling State by a court of competent jurisdiction on or before one hundred eighty (180) days after the Effective Date; or
b. This Agreement or the Consent Judgment as to that Settling State has been disapproved by a court of competent jurisdiction to which it was presented for approval and/or entry (or, in the event of an appeal from or review of a decision of such a court to approve this Agreement and the Consent Judgment, by the court hearing such appeal or conducting such review), and the time to appeal from such disapproval has expired, or, in the event of an appeal from such disapproval, the appeal has been dismissed or the disapproval has been affirmed by the court of last resort to which such appeal has been taken and such dismissal or disapproval has become no longer subject to further appeal (including, without limitation, review by the United States Supreme Court).
2. If this Agreement is terminated with respect to a Settling State and its Participating Subdivisions for whatever reason pursuant to subsection XVI.U.1, then:
a. An applicable statute of limitation or any similar time requirement (excluding any statute of repose) shall be tolled from the date the Settling State signed this Agreement until the later of the time permitted by applicable law or for one year from the date of such termination, with the effect that Allergan and the Settling State in question shall be in the same position with respect to the statute of limitation as they were at the time the Settling State filed its action; and
b. Allergan and the Settling State and its Participating Subdivisions in question shall jointly move the relevant court of competent jurisdiction for an order 67 February 8, 2023
reinstating the actions and Claims dismissed pursuant to the terms of this Agreement governing dismissal, with the effect that Allergan and the Settling State and its Participating Subdivisions in question shall be in the same position with respect to those actions and Claims as they were at the time the action or Claim was stayed or dismissed.
3. Unless Allergan and the Enforcement Committee agree otherwise, this Agreement, with the exception of the Injunctive Relief Terms that have their own provisions on duration, shall terminate as to all Parties as of Annual Payment 6, provided that Allergan has performed its payment obligations under the Agreement as of that date. Notwithstanding any other provision in this Agreement, all releases under this Agreement will remain effective despite any termination under this paragraph.
V. Waiver. Allergan, for good and valuable consideration the receipt of which is acknowledged, hereby (a) waives, foregoes and relinquishes all rights to utilize and/or seek relief under any of the following laws of the State of Texas for the restructuring of its debts or liabilities related to Released Claims or Claims that would have been Released Claims if they had been brought by a Releasor against a Released Entity before the Effective Date, or this Agreement: Tex. Bus. Orgs. Code § 10.003 (Contents of Plan of Merger: More Than One Successor) or any other statute of Subchapter A of Chapter 10 of Tex. Bus. Orgs. Code to the extent such statute relates to multi-successor or divisive mergers (and/or any other similar laws or statutes in any other state or territory); Tex. Bus. Orgs. Code §§ 11.01–
11.414 (Winding Up and Termination of Domestic Entity); or Tex. Bus. & Com. Code §§
23.01–23.33 (Assignments for the Benefit of Creditors) (collectively, the “Texas Statutes”), and (b) agrees, warrants and represents that it will not file, request or petition for relief under the Texas Statutes related to its debts or liabilities related to Released Claims or Claims that would have been Released Claims if they had been brought by a Releasor against a Released Entity before the Effective Date, or this Agreement, in each case until such time as all of Allergan’s payment obligations incurred hereunder are satisfied in full. The foregoing waiver and relinquishment includes, without limitation, until such time as all of Allergan’s payment obligations hereunder are satisfied in full, Allergan’s rights to execute a divisional merger or equivalent transaction or restructuring related to its debts or liabilities related to Released Claims or Claims that would have been Released Claims if they had been brought by a Releasor against a Released Entity before the Effective Date, or this Agreement that in each case has the intent or foreseeable effect of (i) separating material assets from material liabilities and (ii) assigning or allocating all or a substantial portion of those liabilities to any subsidiary or affiliate that files for relief under chapter 11 of the Bankruptcy Code, or pursuant to which such subsidiary or affiliate that files for relief under chapter 11 of the Bankruptcy Code would be assuming or retaining all or a substantial portion of those liabilities.
W. Governing Law. Except (1) as otherwise provided in the Agreement or (2) as necessary, in the sole judgment of the National Arbitration Panel, to promote uniformity of interpretation for matters within the scope of the National Arbitration Panel’s authority, this Agreement shall be governed by and interpreted in accordance with the respective laws of the Settling State, without regard to the conflict of law rules of such Settling State, that is seeking to enforce the Agreement against Allergan or against which Allergan is seeking enforcement. 68 February 8, 2023
Notwithstanding any other provision in this subsection on governing law, any disputes relating to the Settlement Fund Escrow shall be governed by and interpreted in accordance with the law of the state where the escrow agent has its primary place of business.
i
ALLERGAN PUBLIC GLOBAL OPIOID SETTLEMENT EXHIBITS
EXHIBIT A Alleged Harms..................................................................................................... A-1 EXHIBIT B Enforcement Committee Organizational Bylaws............................................. B-1 EXHIBIT C Litigating Subdivisions and Special Districts List ........................................... C-1 EXHIBIT D [Intentionally Omitted]....................................................................................... D-1 EXHIBIT E List of Opioid Remediation Uses ....................................................................... E-1 EXHIBIT F-1 List of States and Pre-Credit Overall Allocation Percentages......................F-1 EXHIBIT F-2 List of Eligible Settling States and Overall Allocation Percentages.............F-3 EXHIBIT G Subdivisions and Special Districts Eligible to Receive Direct Allocations from the Subdivision Fund and Subdivision Fund Allocation Percentages................................................................................................................................G-1 EXHIBIT H [Intentionally Omitted] ......................................................................................H-1 EXHIBIT I Subdivisions with a Population Greater than 10,000......................................... I-1 EXHIBIT J-1 AbbVie Entities.................................................................................................. J-1 EXHIBIT J-2 Allergan Entities................................................................................................ J-2 EXHIBIT J-3 Divested Entities................................................................................................ J-3 EXHIBIT K Subdivision and Special District Settlement Participation Form ..................K-1 EXHIBIT L Settlement Fund Administrator......................................................................... L-1 EXHIBIT M-1 Payment Schedule.......................................................................................... M-1 EXHIBIT M-2 Payment Schedule for Fee Funds, Cost Funds, and Additional Restitution................................................................................................................................. M-2 EXHIBIT N Additional Restitution Amount Allocation....................................................... N-1 EXHIBIT O Adoption of a State-Subdivision Agreement....................................................O-1 EXHIBIT P Injunctive Relief ...................................................................................................P-1 EXHIBIT Q [Intentionally Omitted] ......................................................................................Q-1 ii
EXHIBIT R Agreement on Attorneys’ Fees, Costs, and Expenses...................................... R-1 EXHIBIT S Agreement on the State Outside Counsel Fee Fund for Manufacturer Settlements..................................................................................................................................S-1 EXHIBIT T Agreement on the State Cost Fund Administration ........................................ T-1 A-1
EXHIBIT A
Alleged Harms
The following export reports that were filed in connection with the case captioned In re National Prescription Opiate Litigation, No. 1:17-md-02804 (N.D. Ohio):
1. Expert report of Professor David Cutler, dated March 25, 2019.
2. Expert report of Dr. Jeffrey B. Liebman, dated March 25, 2019.
3. Expert report of Professor Thomas McGuire regarding damages to Bellwethers, dated March 25, 2019.
4. Report of Professor Thomas McGuire regarding public nuisance, dated March 25, 2019.
B-1
EXHIBIT B
Enforcement Committee Organizational Bylaws
ARTICLE I
These bylaws constitute the code of rules adopted by the Settling States and Participating Subdivisions for the creation of an Enforcement Committee (the “Committee”) to exist and operate during the term of the Agreement in connection with Allergan and shall control the regulation and management of the Committee’s affairs.
ARTICLE II
Purpose
The Committee is organized for the sole purpose of evaluating and taking such action as deemed reasonable, necessary, and appropriate by the members of the Committee on the matters delegated to the Committee under that certain Settlement Agreement between the Settling States and Allergan, dated November ___, 2022.
ARTICLE III
Members of the Committee
(1) Number of Members
The Committee will consist of thirteen (13) members (the “Members”). Upon majority resolution of the Committee, the number of Members may be increased or decreased from time to time, but in no event shall a decrease have the effect of decreasing the total number of Members to less than seven Members.
(2) Initial Members
The Committee initially will consist of eight (8) Settling State Members and five (5) Participating Subdivision Members; two (2) of the Participating Subdivisions shall be counties and two (2)shall be municipalities, and the fifth Participating Subdivision member may be either a county or a municipality. The initial Settling State Members are representatives from: California, Illinois, Iowa, New York, North Carolina, Ohio, Tennessee, and Virginia. The initial Participating Subdivision Members are: [•]. Until the date fifteen (15) months from the Effective Date contained in the Settlement Agreement, the Participating Subdivisions may designate their outside counsel to serve as their representative. After the date fifteen (15) months from the Effective Date, an employee or official of the Participating Subdivision must be the designated as the representative of the Participating Subdivision.
(3) Term of Members
B-2
The term of office for Members of the Committee will be until the end of the term of the Settlement Agreement, six (6) years, unless and until a Member withdraws or resigns from the Committee.
(4) Resignation
Any Member may resign at any time by delivering written notice to the Chairperson of the Committee. Such resignation shall take effect upon receipt or, if later, at the time specified in the notice.
(5) Removal
(a) Any Member may be removed without cause, at any time, by a majority of the entire Committee, at a Regular or Special Meeting called for that purpose. Any Member under consideration of removal must first be notified about the consideration by written notice at least five days prior to the meeting at which the vote takes place. (b) In the event that any Member is not a Settling State or a Participating Subdivision or the Member subsequently becomes a Later Litigating Subdivision, the Member shall be removed immediately without notice or vote of the Committee. (6) Vacancies
In the event of a vacancy, the Members of the same type (Settling State or Participating Subdivision) shall select another Settling State or Participating Subdivision to fill that Member’s position.
(7) Compensation
Members shall not receive any salaries or other compensation for their services, but, by resolution of the Committee, may be reimbursed for any actual expenses incurred in the performance of their duties for the Committee, as long as a majority of disinterested Members approve the reimbursement. Any reimbursement shall be sought from the Settlement Fund Administrator.
ARTICLE IV
Conflicts of Interest and Code of Ethics
If a Member, agent, or employee of the Committee has a conflict of interest, he or she may not participate in a vote, discussion, or decision about the matter. Each Member shall follow any applicable state or local law with respect to conflicts, gifts, and ethics.
ARTICLE V
Committee Meetings
(1) Place of Meetings
B-3
Meetings of the Committee will be held at any place that the Chairperson may designate, including by telephonic or electronic means.
(2) Regular Meetings
Regular meetings of the Committee shall be held as deemed necessary by the Chairperson or any three members.
(3) Notice of Meetings
Written notice of the date, time, place and subject of each meeting must be provided to the Members at least 72 hours before the scheduled time of the meeting, except when there is an emergency or urgent public necessity.
(4) Quorum
A majority of the incumbent Members (not counting vacancies) shall constitute a quorum for the purposes of convening a meeting or conducting business. (5) Voting and Proxy
When it is necessary to vote on any matter before the Committee, Members may vote by electronic means as provided in these Bylaws. Proxy voting is permitted. In order for a matter to pass, the matter must have a majority vote of Members present and must have at least one vote from a Settling State Member and a Participating Subdivision Member. In the event that there is a Quorum, but no Settling State or Participating Subdivision Member is present, then a matter may pass with a simple majority vote. (6) Minutes
The Committee shall prepare and keep minutes. The minutes must state the subject of each deliberation and indicate each vote, order, decision, or other action taken.
ARTICLE VI
Officers
(1) Roster of Officers
The Committee shall have a Chairperson, a Vice Chairperson, and a Secretary. The Committee may have at its discretion, such other officers as may be appointed by the Members of the Committee. One person may hold two or more offices, except those serving as Chairperson.
(2) Election and Removal of Officers
B-4
All officers shall serve two-year terms. The election shall be conducted at the first meeting of the fiscal year. Officers shall remain in office until their successors have been selected.
Officers may serve consecutive terms without limit. The election of officers shall be by majority vote of the Members of the Committee attending the meeting. (3) Vacancies
If a vacancy occurs during the term of office for any elected officer, the Members of the Committee shall elect a new officer to fill the remainder of the term as soon as practical, by majority vote of Members present.
(4) Chairperson
The Chairperson will supervise and control the affairs of the Committee and shall exercise such supervisory powers as may be given him/her by the Members of the Committee. The Chairperson will perform all duties incident to such office and such other duties as may be provided in these bylaws or as may be prescribed from time to time by the Committee. The Chairperson shall preside at all meetings and shall exercise parliamentary control in accordance with Robert’s Rules of Order.
(5) Vice Chairperson
The Vice Chairperson shall act in place of the Chairperson in the event of the Chairperson’s absence, inability, or refusal to act, and shall exercise and discharge such other duties as may be required by the Committee. The Vice Chairperson shall serve as the parliamentarian and interpret any ambiguities of the bylaws. (6) Secretary
The Secretary will keep and maintain all records related to the Committee and take minutes of all meetings.
(7) Records
All elected officers and committee chairpersons shall relinquish their records to the Chairperson immediately upon the completion of their term of office or completion of a project.
(8) Resignation
An officer may resign the office while not resigning membership from the Committee, by submitting a letter to the Chairperson. Vacancies occurring in any office shall be appointed for the remainder of the term.
ARTICLE VII
Duties
B-5
(1) Prior to the Reference Date
The Committee shall be responsible for any additional negotiations with Allergan, including, but not limited to, negotiating extensions of any periods created by the Settlement Agreement.
(2) After the Effective Date
The Committee shall establish procedures for the receipt of notices that a dispute exists concerning the Agreement and review of such disputes, pursuant to Section XIV of the Agreement. Members may engage with Allergan, Settling States, and Participating Subdivisions attempting to resolve any dispute without further action by the Committee.
The Committee may request additional information from Allergan, Settling States, and Participating Subdivisions to the extent the Committee believes such information is necessary to understand, resolve, or provide advice related to a dispute. The Committee shall endeavor to provide advice relative to the dispute no later than 60 days after receipt of notice.
ARTICLE VIII
Rules of Procedure
The proceedings and business of the Committee shall be governed by Robert’s Rules of Order unless otherwise waived by the Committee.
ARTICLE IX
Operations
(1) Records
The Committee will keep correct and complete records and will also keep minutes of the proceedings of the Committee meetings and Committees. The Committee will keep such records at its principal place of business at a place designated by the Chairperson.
All elected officers and committee chairpersons shall relinquish their records to the Chairperson, immediately upon the completion of their term of office. (2) Inspection of Books and Records
The minutes of a meeting are public records and shall be available for public inspection and copying on request to the Committee’s Chairperson or the Chairperson’s designee. (3) Amendments
The bylaws may be amended at any time by a vote of a majority of Members present and must have at least one vote from a Settling State Member and a Participating Subdivision B-6
Member. In the event that there is a Quorum, but no Settling State or Participating Subdivision Member is present, then a matter may pass with a simple majority vote.
C-1
EXHIBIT C
Litigating Subdivisions and Special Districts List1
State Subdivision/Special
District Case Caption Case No. Jurisdiction
AL
Attentus Moulton,
LLC d/b/a Lawrence
Medical Center
The Health Care Authority of the City of
Huntsville D/B/A HH Health System; The
Health Care Authority of the City of
Huntsville D/B/A Huntsville Hospital; The
Health Care Authority of the City of
Huntsville D/B/A Madison Hospital; The
Health Care Authority of the City of
Huntsville D/B/A Huntsville Hospital for
Women and Children; HH Health SystemMorgan, LLC D/B/A Decatur Morgan Hospital - Decatur And Decatur Morgan
Hospital - Parkway; The Health Care
Authority Of Morgan County - City Of
Decatur; HH Health System-Shoals, LLC
D/B/A Helen Keller Hospital and Red Bay
Hospital; HH Health System-Athens
Limestone, LLC D/B/A Athens Limestone
Hospital; Attentus Moulton, LLC D/B/A
Lawrence Medical Center v. Purdue
Pharma L.P., et al.
1:19-op-45143 N.D. Ohio
(Federal)
AL
Bibb County
Healthcare
Authority d/b/a Bibb
Medical Center
Fort Payne Hospital Corporation; The
Bibb County Healthcare Authority; The
Dale County Health Care Authority;
Greene County Hospital Board; Jackson
Hospital & Clinic, Inc.; Escambia County
Alabama Community Hospitals, Inc.;
Mizell Memorial Hospital, Inc.; The
Tombigbee Health Care Authority;
Geneva County Health Care Authority;
Community Hospital, Inc.; The Sylacauga
Health Care Authority; Russellville
Hospital, Inc.; Lakeland Community
Hospital, Inc.; Monroe County
Healthcare Authority; Infirmary Health
Hospitals, Inc.; The DCH Health Care
Authority; The Healthcare Authority For
Baptist Health, An Affiliate Of UAB
Health System; Medical West Hospital
Authority, An Affiliate Of UAB Health
System; Evergreen Medical Center, LLC;
Gilliard Health Services, Inc.; Crestwood
Healthcare, L.P.; Triad Of Alabama,
LLC; QHG Of Enterprise, Inc.; Affinity
Hospital, LLC; Gadsden Regional
Medical Center, LLC; Foley Hospital
Corporation; The Health Care Authority
CV-2021-
900016
AL - Circuit
Court of
Conecuh
County
(State)
1 This list is subject to amendment in the event it proves to be incomplete and other entities that satisfy the definition for “Litigating Subdivision” or “Litigating Special District” are subsequently identified.
C-2
State Subdivision/Special
District Case Caption Case No. Jurisdiction
Of Clarke County, Alabama; BBH PBMC,
LLC; BBH, WBMC, LLC; BBH SBMC,
LLC; BBH CBMC, LLC; and BBH BMC,
LLC v. McKesson Corporation, et al.
AL City of Abbeville City of Abbeville, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45437 N.D. Ohio (Federal)
AL City of Alabaster
City of Alabaster, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:22-op-45013 N.D. Ohio
(Federal)
AL City of Albertville
Marshall County; the Cities of Albertville,
Arab, Boaz and Guntersville; and the
Towns of Douglas and Grant, Alabama v.
Purdue Pharma L.P., et al.
1:18-op-45230 N.D. Ohio
(Federal)
AL City of Alexander City of Alexander City, Alabama v.
Purdue Pharma L.P., et al. 1:19-op-45827
N.D. Ohio
(Federal)
AL City of Arab
Marshall County; the Cities of Albertville,
Arab, Boaz and Guntersville; and the
Towns of Douglas and Grant, Alabama v.
Purdue Pharma L.P., et al.
1:18-op-45230 N.D. Ohio
(Federal)
AL City of Argo City of Argo v. Purdue Pharma L.P., et al. 1:19-op-45744 N.D. Ohio (Federal)
AL City of Ashland City of Ashland, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:19-op-46102 N.D. Ohio (Federal) AL City of Ashville
City of Leesburg, City of Jacksonville,
City of Rainbow City, City of Ashville,
City of Springville, City of Moody, City of
Ragland and City of Thomasville v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45261 N.D. Ohio
(Federal)
AL City of Athens City of Athens, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:19-op-45953 N.D. Ohio (Federal) AL City of Attalla
City of Fultondale, City of Graysville,
City of Centre, Town of Cedar Bluff, City
of Dadeville, Town of Camp Hill, Town of
Oakman, City of Attalla and Town of
Gilbertown, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45265 N.D. Ohio
(Federal)
AL City of Auburn City of Auburn, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:20-op-45282 N.D. Ohio (Federal) AL City of Bay Minette
City of Bay Minette, Alabama; Town of
Loxley, Alabama; and Town of
Summerdale, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:22-op-45018 N.D. Ohio
(Federal)
AL City of Bessemer
The City of Bessemer, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:22-op-45014 N.D. Ohio
(Federal)
AL City of Birmingham City of Birmingham v. Purdue Pharma L.P., et al. 1:17-op-45008 N.D. Ohio (Federal)
AL City of Boaz
Marshall County; the Cities of Albertville,
Arab, Boaz and Guntersville; and the
Towns of Douglas and Grant, Alabama v.
Purdue Pharma L.P., et al.
1:18-op-45230 N.D. Ohio
(Federal)
C-3
State Subdivision/Special
District Case Caption Case No. Jurisdiction
AL City of Brent City of Brent, Alabama v. Purdue Pharma L.P., et al. 1:19-op-45910 N.D. Ohio (Federal)
AL City of Brewton
City of Brewton, Alabama, and City of
Semmes, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
1:21-op-45113 N.D. Ohio
(Federal)
AL City of Bridgeport
Jackson County, City of Bridgeport, City
of Henagar, City of New Hope, City of
Scottsboro, Town of Geraldine and Town
of Woodville, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45634 N.D. Ohio
(Federal)
AL City of Brundidge City of Brundidge, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:19-op-46128 N.D. Ohio (Federal) AL City of Calera
City of Calera, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:21-op-45070 N.D. Ohio
(Federal)
AL City of Carbon Hill
The City of Nauvoo, The City of Cordova,
The City of Carbon Hill, The City of
Sipsey, The City of Parrish and The City
of Oakman, Alabama v. Purdue Pharma
L.P., et al.
1:18-op-45737 N.D. Ohio
(Federal)
AL City of Center Point City of Center Point, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:19-op-46103 N.D. Ohio (Federal) AL City of Centre
City of Fultondale, City of Graysville,
City of Centre, Town of Cedar Bluff, City
of Dadeville, Town of Camp Hill, Town of
Oakman, City of Attalla and Town of
Gilbertown, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45265 N.D. Ohio
(Federal)
AL City of Centreville City of Centreville, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:19-op-46120 N.D. Ohio (Federal) AL City of Chickasaw City of Chickasaw, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:20-op-45115 N.D. Ohio (Federal) AL City of Childersburg
City of Childersburg, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:22-op-45020 N.D. Ohio
(Federal)
AL City of Clanton
City of Clanton, Alabama v.
AmerisourceBergen Drug Corporation, et
al. / The City of Clanton, Alabama; The
City of Columbiana, Alabama; The City of
Helena, Alabama; The City of Pelham,
Alabama v. AmerisourceBergen Drug
Corporation, et al.
1:18-op-46084 /
1:22-op-45016
N.D. Ohio
(Federal)
AL City of Columbiana
The City of Clanton, Alabama; The City
of Columbiana, Alabama; The City of
Helena, Alabama; The City of Pelham,
Alabama v. AmerisourceBergen Drug
Corporation, et al.
1:22-op-45016 N.D. Ohio
(Federal)
AL City of Cordova
The City of Nauvoo, The City of Cordova,
The City of Carbon Hill, The City of
Sipsey, The City of Parrish and The City
of Oakman, Alabama v. Purdue Pharma
L.P., et al.
1:18-op-45737 N.D. Ohio
(Federal)
C-4
State Subdivision/Special
District Case Caption Case No. Jurisdiction
AL City of Cullman
City of Cullman, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:19-op-45248 N.D. Ohio
(Federal)
AL City of Dadeville
City of Dadeville, Alabama v. Purdue
Pharma L.P., et al. / City of Fultondale,
City of Graysville, City of Centre, Town of
Cedar Bluff, City of Dadeville, Town of
Camp Hill, Town of Oakman, City of
Attalla and Town of Gilbertown, Alabama
v. Teva Pharmaceuticals USA, Inc., et al.
1:19-op-45779 /
1:20-op-45265
N.D. Ohio
(Federal)
AL City of Daleville City of Daleville, Alabama v. Purdue Pharma L.P., et al. 1:19-op-45778 N.D. Ohio (Federal)
AL City of Daphne City of Daphne, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:20-op-45227 N.D. Ohio (Federal) AL City of Decatur
City of Decatur, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45201 N.D. Ohio
(Federal)
AL City of Demopolis
City of Demopolis, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45183 N.D. Ohio
(Federal)
AL City of Dora
The Counties of Marion, Pickens and
Walker, Alabama and the Cities of Dora,
Jasper, and Sumiton, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45171 N.D. Ohio
(Federal)
AL City of Dothan City of Dothan, Alabama v. Purdue
Pharma L.P., et al. 1:19-op-45886 N.D. Ohio (Federal)
AL City of East
Brewton
City of East Brewton, Alabama v. Teva
Pharmaceuticals USA Inc., et al. 1:22-op-45005 N.D. Ohio (Federal) Al City of Enterprise
City of Enterprise, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45213 N.D. Ohio
(Federal)
AL City of Eufaula City of Eufaula v. Teva Pharmaceuticals USA, Inc., et al. 1:19-op-46132 N.D. Ohio (Federal)
AL City of Evergreen City of Evergreen, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45422 N.D. Ohio (Federal)
AL City of Fairfield City of Fairfield, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:20-op-45089 N.D. Ohio (Federal) AL City of Fairhope City of Fairhope, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:22-op-45002 N.D. Ohio (Federal) AL City of Fayette
Fayette County, City of Fayette, Town of
Berry and Rodney Ingle, in his capacity
as Sheriff of Fayette County, Alabama v.
Purdue Pharma L.P., et al.
1:18-op-45211 N.D. Ohio
(Federal)
AL City of Florence The City of Florence v. Purdue Pharma L.P., et al. 1:19-op-45073 N.D. Ohio (Federal)
AL City of Foley City of Foley, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:20-op-45287 N.D. Ohio (Federal) AL City of Fort Payne
City of Fort Payne, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:17-op-45079 N.D. Ohio
(Federal)
AL City of Fultondale
City of Fultondale, City of Graysville,
City of Centre, Town of Cedar Bluff, City
of Dadeville, Town of Camp Hill, Town of
1:20-op-45265 N.D. Ohio
(Federal)
C-5
State Subdivision/Special
District Case Caption Case No. Jurisdiction
Oakman, City of Attalla and Town of
Gilbertown, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
AL City of Gadsden
City of Gadsden, Etowah County, and
Todd Entrekin, Sheriff of Etowah County,
Alabama v. Purdue Pharma L.P., et al.
1:17-op-45101 N.D. Ohio
(Federal)
AL City of Geneva City of Geneva, Alabama v. Purdue
Pharma L.P., et al. 1:19-op-45986 N.D. Ohio (Federal)
AL City of Georgiana City of Georgiana, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45436 N.D. Ohio (Federal)
AL City of Graysville
City of Fultondale, City of Graysville,
City of Centre, Town of Cedar Bluff, City
of Dadeville, Town of Camp Hill, Town of
Oakman, City of Attalla and Town of
Gilbertown, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45265 N.D. Ohio
(Federal)
AL City of Greensboro City of Greensboro, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45421 N.D. Ohio (Federal)
AL City of Greenville City of Greenville, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45023 N.D. Ohio (Federal)
AL City of Guin
City of Guin, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45457 N.D. Ohio
(Federal)
AL City of Gulf Shores
The City of Gulf Shores, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:22-op-45019 N.D. Ohio
(Federal)
AL City of Guntersville
Marshall County; the Cities of Albertville,
Arab, Boaz and Guntersville; and the
Towns of Douglas and Grant, Alabama v.
Purdue Pharma L.P., et al.
1:18-op-45230 N.D. Ohio
(Federal)
AL City of Haleyville City of Haleyville, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:19-op-46118 N.D. Ohio (Federal) AL City of Hamilton
City of Hamilton, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45564 N.D. Ohio
(Federal)
AL City of Hartselle
City of Hartselle, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45736 N.D. Ohio
(Federal)
AL City of Headland City of Headland, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:19-op-46131 N.D. Ohio (Federal) AL City of Helena
The City of Clanton, Alabama; The City
of Columbiana, Alabama; The City of
Helena, Alabama; The City of Pelham,
Alabama v. AmerisourceBergen Drug
Corporation, et al.
1:22-op-45016 N.D. Ohio
(Federal)
AL City of Henagar
Jackson County, City of Bridgeport, City
of Henagar, City of New Hope, City of
Scottsboro, Town of Geraldine and Town
of Woodville, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45634 N.D. Ohio
(Federal)
AL City of Homewood City of Homewood, Alabama v. McKesson Corporation, et al. 1:19-op-45973 N.D. Ohio (Federal)
C-6
State Subdivision/Special
District Case Caption Case No. Jurisdiction
AL City of Hoover City of Hoover, Alabama v. Purdue
Pharma L.P., et al. 1:19-op-45746 N.D. Ohio (Federal)
AL City of Hueytown
Jefferson County, Jefferson County Board
of Health, City of Pleasant Grove, City of
Hueytown and City of Mountain Brook
and Mike Hale, in his capacity as Sheriff
of Jefferson County, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45558 N.D. Ohio
(Federal)
AL City of Huntsville City of Huntsville, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:19-op-45947 N.D. Ohio (Federal) AL City of Irondale
City of Irondale, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:22-op-45012 N.D. Ohio
(Federal)
AL City of Jacksonville
City of Leesburg, City of Jacksonville,
City of Rainbow City, City of Ashville,
City of Springville, City of Moody, City of
Ragland and City of Thomasville v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45261 N.D. Ohio
(Federal)
AL City of Jasper
The Counties of Marion, Pickens and
Walker, Alabama and the Cities of Dora,
Jasper, Sumiton, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45171 N.D. Ohio
(Federal)
AL City of Killen The City of Killen, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:20-op-45218 N.D. Ohio (Federal) AL City of Lanett City of Lanett, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:19-op-46130 N.D. Ohio (Federal) AL City of Leeds City of Leeds, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:20-op-45088 N.D. Ohio (Federal) AL City of Leesburg
City of Leesburg, City of Jacksonville,
City of Rainbow City, City of Ashville,
City of Springville, City of Moody, City of
Ragland and City of Thomasville v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45261 N.D. Ohio
(Federal)
AL City of Level Plains City of Level Plains, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:20-op-45100 N.D. Ohio (Federal) AL City of Lincoln City of Lincoln, Alabama v. Cardinal Health, Inc., et al. 1:18-op-45786 N.D. Ohio (Federal)
AL City of Linden City of Linden v. Teva Pharmaceuticals USA, Inc., et al. 1:20-op-45118 N.D. Ohio (Federal)
AL City of Louisville The City of Louisville, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:19-op-46058 N.D. Ohio (Federal) AL City of Luverne City of Luverne, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:20-op-45109 N.D. Ohio (Federal) AL City of Madison The City of Madison, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:20-op-45198 N.D. Ohio (Federal) AL City of Marion
City of Marion, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45217 N.D. Ohio
(Federal)
AL City of Midfield City of Midfield, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45416 N.D. Ohio (Federal)
AL City of Millbrook
City of Millbrook, Alabama and City of
Wetumpka, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
1:21-op-45135 N.D. Ohio
(Federal)
C-7
State Subdivision/Special
District Case Caption Case No. Jurisdiction
AL City of Mobile
City of Mobile, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45076 N.D. Ohio
(Federal)
AL City of Monroeville
Monroe County, Alabama; The City of
Monroeville, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:20-op-45273 N.D. Ohio
(Federal)
AL City of Montgomery City of Montgomery, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45494 N.D. Ohio (Federal)
AL City of Moody
City of Leesburg, City of Jacksonville,
City of Rainbow City, City of Ashville,
City of Springville, City of Moody, City of
Ragland and City of Thomasville v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45261 N.D. Ohio
(Federal)
AL City of Moulton
City of Moulton, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45202 N.D. Ohio
(Federal)
AL City of Mountain
Brook
Jefferson County, Jefferson County Board
of Health, City of Pleasant Grove, City of
Hueytown and City of Mountain Brook
and Mike Hale, in his capacity as Sheriff
of Jefferson County, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45558 N.D. Ohio
(Federal)
AL City of Muscle
Shoals
The City of Muscle Shoals, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:20-op-45268 N.D. Ohio
(Federal)
AL City of Nauvoo
The City of Nauvoo, The City of Cordova,
The City of Carbon Hill, The City of
Sipsey, The City of Parrish and The City
of Oakman, Alabama v. Purdue Pharma
L.P., et al.
1:18-op-45737 N.D. Ohio
(Federal)
AL City of New Hope
Jackson County, City of Bridgeport, City
of Henagar, City of New Hope, City of
Scottsboro, Town of Geraldine and Town
of Woodville, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45634 N.D. Ohio
(Federal)
AL City of Northport
City of Northport, City of Robertsdale and
Town of Brookwood, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45272 N.D. Ohio
(Federal)
AL City of Oakman
The City of Nauvoo, The City of Cordova,
The City of Carbon Hill, The City of
Sipsey, The City of Parrish and The City
of Oakman, Alabama v. Purdue Pharma
L.P., et al.
1:18-op-45737 N.D. Ohio
(Federal)
AL City of Oneonta The City of Oneonta, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:20-op-45210 N.D. Ohio (Federal) AL City of Opelika
City of Opelika, City of Spanish Fort, City
of Centreville, City of Slocomb and Town
of West Blocton v. Teva Pharmaceuticals
USA, Inc., et al.
1:20-op-45208 N.D. Ohio
(Federal)
C-8
State Subdivision/Special
District Case Caption Case No. Jurisdiction
AL City of Opp
City of Opp, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45011 N.D. Ohio
(Federal)
AL City of Orange
Beach
City of Orange Beach, Alabama v. Purdue
Pharma L.P., et al. 1:19-op-45784 N.D. Ohio (Federal)
AL City of Oxford City of Oxford, Alabama v. Purdue
Pharma L.P., et al. 1:19-op-45774 N.D. Ohio (Federal)
AL City of Ozark
City of Ozark, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45214 N.D. Ohio
(Federal)
AL City of Parrish
The City of Nauvoo, The City of Cordova,
The City of Carbon Hill, The City of
Sipsey, The City of Parrish and The City
of Oakman, Alabama v. Purdue Pharma
L.P., et al.
1:18-op-45737 N.D. Ohio
(Federal)
AL City of Pelham
The City of Clanton, Alabama; The City
of Columbiana, Alabama; The City of
Helena, Alabama; The City of Pelham,
Alabama v. AmerisourceBergen Drug
Corporation, et al.
1:22-op-45016 N.D. Ohio
(Federal)
AL City of Pell City City of Pell City, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:20-op-45091 N.D. Ohio (Federal) AL City of Phenix
Phenix City, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45179 N.D. Ohio
(Federal)
AL City of Piedmont City of Piedmont v. AmerisourceBergen Drug Corporation, et al. 21-op-45049 N.D. Ohio (Federal) AL City of Pleasant
Grove
Jefferson County, Jefferson County Board
of Health, City of Pleasant Grove, City of
Hueytown and City of Mountain Brook
and Mike Hale, in his capacity as Sheriff
of Jefferson County, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45558 N.D. Ohio
(Federal)
AL City of Prattville City of Prattville, Alabama v. Purdue Pharma L.P., et al. 1:19-op-45783 N.D. Ohio (Federal)
AL City of Prichard City of Prichard, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45690 N.D. Ohio (Federal)
AL City of Ragland
City of Leesburg, City of Jacksonville,
City of Rainbow City, City of Ashville,
City of Springville, City of Moody, City of
Ragland and City of Thomasville v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45261 N.D. Ohio
(Federal)
AL City of Rainbow
City
City of Leesburg, City of Jacksonville,
City of Rainbow City, City of Ashville,
City of Springville, City of Moody, City of
Ragland and City of Thomasville v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45261 N.D. Ohio
(Federal)
AL City of Rainsville
City of Rainsville and Town of
Hammondville, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:19-op-45135 N.D. Ohio
(Federal)
AL City of Red Bay City of Red Bay, City of Russellville, City of Sheffield and Town of Leighton, 1:19-op-45136 N.D. Ohio (Federal) C-9
State Subdivision/Special
District Case Caption Case No. Jurisdiction
Alabama v. AmerisourceBergen Drug
Corporation, et al.
AL City of Roanoke City of Roanoke, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 22-op-45011 N.D. Ohio (Federal) AL City of Robertsdale
City of Northport, City of Robertsdale and
Town of Brookwood, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45272 N.D. Ohio
(Federal)
AL City of Russellville
City of Red Bay, City of Russellville, City
of Sheffield and Town of Leighton,
Alabama v. AmerisourceBergen Drug
Corporation, et al.
1:19-op-45136 N.D. Ohio
(Federal)
AL City of Saraland City of Saraland, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 22-op-45017 N.D. Ohio (Federal) AL City of Satsuma City of Satsuma, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:20-op-45116 N.D. Ohio (Federal) AL City of Scottsboro
Jackson County, City of Bridgeport, City
of Henagar, City of New Hope, City of
Scottsboro, Town of Geraldine and Town
of Woodville, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45634 N.D. Ohio
(Federal)
AL City of Selma
City of Selma, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45198 N.D. Ohio
(Federal)
AL City of Semmes
City of Brewton, Alabama, and City of
Semmes, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
1:21-op-45113 N.D. Ohio
(Federal)
AL City of Sheffield
City of Red Bay, City of Russellville, City
of Sheffield and Town of Leighton,
Alabama v. AmerisourceBergen Drug
Corporation, et al.
1:19-op-45136 N.D. Ohio
(Federal)
AL City of Sipsey
The City of Nauvoo, The City of Cordova,
The City of Carbon Hill, The City of
Sipsey, The City of Parrish and The City
of Oakman, Alabama v. Purdue Pharma
L.P., et al.
1:18-op-45737 N.D. Ohio
(Federal)
AL City of Slocomb
City of Opelika, City of Spanish Fort, City
of Centreville, City of Slocomb and Town
of West Blocton v. Teva Pharmaceuticals
USA, Inc., et al.
1:20-op-45208 N.D. Ohio
(Federal)
AL City of Spanish Fort
City of Opelika, City of Spanish Fort, City
of Centreville, City of Slocomb and Town
of West Blocton v. Teva Pharmaceuticals
USA, Inc., et al.
1:20-op-45208 N.D. Ohio
(Federal)
AL City of Springville
City of Leesburg, City of Jacksonville,
City of Rainbow City, City of Ashville,
City of Springville, City of Moody, City of
Ragland and City of Thomasville v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45261 N.D. Ohio
(Federal)
AL City of Sumiton
The Counties of Marion, Pickens and
Walker, Alabama and the Cities of Dora,
Jasper, Sumiton, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45171 N.D. Ohio
(Federal)
C-10
State Subdivision/Special
District Case Caption Case No. Jurisdiction
AL City of Sylacauga City of Sylacauga, Alabama v. Purdue Pharma L.P., et al. 1:19-op-45900 N.D. Ohio (Federal)
AL City of Talladega Talladega County and City of Talladega, Alabama v. Cardinal Health, Inc., et al. 1:18-op-45190 N.D. Ohio (Federal) AL City of Thomasville
City of Leesburg, City of Jacksonville,
City of Rainbow City, City of Ashville,
City of Springville, City of Moody, City of
Ragland and City of Thomasville v. Teva
Pharmaceuticals USA, Inc., et al.
1:20-op-45261 N.D. Ohio
(Federal)
AL City of Troy
City of Troy, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45947 N.D. Ohio
(Federal)
AL City of Trussville The City of Trussville, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45192 N.D. Ohio (Federal)
AL City of Tuscaloosa
City of Tuscaloosa, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45553 N.D. Ohio
(Federal)
AL City of Tuscumbia
The Town of Cherokee and the City of
Tuscumbia, Alabama, and the Counties of
Colbert and Franklin, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45005 N.D. Ohio
(Federal)
AL City of Tuskegee City of Tuskegee, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45544 N.D. Ohio (Federal)
AL City of Union
Springs
City of Union Springs, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45204 N.D. Ohio
(Federal)
AL City of Uniontown City of Uniontown, Alabama v. Teva Pharmaceuticals USA, Inc., et al. 1:20-op-45117 N.D. Ohio (Federal) AL City of Vernon
Lamar County, Alabama, City of Vernon,
Alabama and Hal Allred, in his capacity
as Sheriff of Lamar County, Alabama v.
Purdue Pharma L.P., et al.
1:18-op-45210 N.D. Ohio
(Federal)
AL City of Vestavia
Hills
City of Vestavia Hills, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:19-op-45141 N.D. Ohio
(Federal)
AL City of Weaver City of Weaver, Alabama v. Purdue
Pharma L.P., et al. 1:18-op-45565 N.D. Ohio (Federal)
AL City of Wetumpka
City of Millbrook, Alabama and City of
Wetumpka, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
1:21-op-45135 N.D. Ohio
(Federal)
AL City of Winfield The City of Winfield, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45738 N.D. Ohio (Federal)
AL County of Autauga Autauga County v. Purdue Pharma L.P., et al. 1:19-op-45086 N.D. Ohio (Federal)
AL County of Babour Babour County, Alabama v. Purdue
Pharma L.P., et al 1:18-op-45244 N.D. Ohio (Federal)
AL County of Baldwin
Baldwin County, Alabama, v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45152 N.D. Ohio
(Federal)
AL County of Bibb
Bibb County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45413 N.D. Ohio
(Federal)
C-11
State Subdivision/Special
District Case Caption Case No. Jurisdiction
AL County of Blount Blount County v. Purdue Pharma L.P., et al. 1:18-op-45415 N.D. Ohio (Federal)
AL County of Bullock
Bullock County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45246 N.D. Ohio
(Federal)
AL County of Butler Butler County, Alabama v. Purdue
Pharma L.P., et al. 1:18-op-45441 N.D. Ohio (Federal)
AL County of Calhoun Calhoun County, Alabama v. Cardinal Health, Inc., et al. 1:18-op-45191 N.D. Ohio (Federal)
AL County of Chambers Chambers County, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45408 N.D. Ohio (Federal)
AL County of Cherokee
Cherokee County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45207 N.D. Ohio
(Federal)
AL County of Chilton
Chilton County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45735 N.D. Ohio
(Federal)
AL County of Choctaw Choctaw County, Alabama v. Purdue
Pharma L.P., et al. 1:19-op-45770 N.D. Ohio (Federal)
AL County of Clarke
Clarke County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45247 N.D. Ohio
(Federal)
AL County of Clay Clay County, Alabama v. Cardinal
Health, Inc., et al. 1:18-op-45248 N.D. Ohio (Federal)
AL County of Cleburne Cleburne County, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45566 N.D. Ohio (Federal)
AL County of Coffee
Coffee County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45182 N.D. Ohio
(Federal)
AL County of Colbert
The Town of Cherokee and the City of
Tuscumbia, Alabama, and the Counties of
Colbert and Franklin, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45005 N.D. Ohio
(Federal)
AL County of Conecuh
Conecuh County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45957 N.D. Ohio
(Federal)
AL County of Coosa Coosa County, Alabama v. Purdue
Pharma L.P., et al. 1:19-op-45995 N.D. Ohio (Federal)
AL County of
Covington
Covington County, Alabama v. Purdue
Pharma L.P., et al. 1:19-op-45751 N.D. Ohio (Federal)
AL County of Crenshaw Crenshaw County, Alabama v. Purdue Pharma L.P., et al. 1:19-op-45983 N.D. Ohio (Federal)
AL County of Cullman
Cullman County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45227 N.D. Ohio
(Federal)
AL County of Dale Dale County, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45561 N.D. Ohio (Federal)
AL County of Dallas
Dallas County, Alabama v.
AmerisourceBergen Drug Corporation, et
al
1:18-op-45667 N.D. Ohio
(Federal)
AL County of DeKalb
Dekalb County and the Town of Powell,
Alabama v. Teva Pharmaceuticals USA,
Inc., et al.
1:20-op-45209 N.D. Ohio
(Federal)
C-12
State Subdivision/Special
District Case Caption Case No. Jurisdiction
AL County of Elmore
Elmore County, Alabama, and Randolph
County, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
1:22-op-45003 N.D. Ohio
(Federal)
AL County of Escambia Escambia County, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:20-op-45112 N.D. Ohio (Federal) AL County of Etowah
City of Gadsden, Etowah County, and
Todd Entrekin, Sheriff of Etowah County,
Alabama v. Purdue Pharma L.P., et al.
1:17-op-45101 N.D. Ohio
(Federal)
AL County of Fayette
Fayette County, City of Fayette, Town of
Berry and Rodney Ingle, in his capacity
as Sheriff of Fayette County, Alabama v.
Purdue Pharma L.P., et al.
1:18-op-45211 N.D. Ohio
(Federal)
AL County of Franklin
The Town of Cherokee and the City of
Tuscumbia, Alabama, and the Counties of
Colbert and Franklin, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45005 N.D. Ohio
(Federal)
AL County of Geneva Geneva County, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:20-op-45105 N.D. Ohio (Federal) AL County of Greene
Greene County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45209 N.D. Ohio
(Federal)
AL County of Hale Hale County, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45420 N.D. Ohio (Federal)
AL County of Henry Henry County, Alabama v. Purdue
Pharma L.P., et al. 1:18-op-45543 N.D. Ohio (Federal)
AL County of Houston Houston County, Alabama v. Purdue
Pharma L.P., et al. 1:18-op-45019 N.D. Ohio (Federal)
AL County of Jackson
Jackson County, City of Bridgeport, City
of Henagar, City of New Hope, City of
Scottsboro, Town of Geraldine and Town
of Woodville, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45634 N.D. Ohio
(Federal)
AL County of Jefferson
Jefferson County, Jefferson County Board
of Health, City of Pleasant Grove, City of
Hueytown and City of Mountain Brook
and Mike Hale, in his capacity as Sheriff
of Jefferson County, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45558 N.D. Ohio
(Federal)
AL County of Lamar
Lamar County, Alabama, City of Vernon,
Alabama and Hal Allred, in his capacity
as Sheriff of Lamar County, Alabama v.
Purdue Pharma L.P., et al.
1:18-op-45210 N.D. Ohio
(Federal)
AL County of
Lauderdale
Lauderdale County, Alabama v. Purdue
Pharma L.P., et al. 1:19-op-45845 N.D. Ohio (Federal)
AL County of Lawrence
Lawrence County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45228 N.D. Ohio
(Federal)
AL County of
Limestone
Limestone County, Alabama v. Purdue
Pharma L.P., et al 1:18-op-45328 N.D. Ohio (Federal)
AL County of Lowndes
Lowndes County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45203 N.D. Ohio
(Federal)
C-13
State Subdivision/Special
District Case Caption Case No. Jurisdiction
AL County of Macon Macon County, Alabama v. Purdue
Pharma L.P., et al. 1:19-op-45982 N.D. Ohio (Federal)
AL County of Madison
Madison County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:19-op-45006 N.D. Ohio
(Federal)
AL County of Marengo
Marengo County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45188 N.D. Ohio
(Federal)
AL County of Marion
The Counties of Marion, Pickens and
Walker, Alabama and the Cities of Dora,
Jasper, Sumiton, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45171 N.D. Ohio
(Federal)
AL County of Marshall
Marshall County; the Cities of Albertville,
Arab, Boaz and Guntersville; and the
Towns of Douglas and Grant, Alabama v.
Purdue Pharma L.P., et al.
1:18-op-45230 N.D. Ohio
(Federal)
AL County of Mobile
Mobile County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45186 N.D. Ohio
(Federal)
AL County of Monroe
Monroe County, Alabama; The City of
Monroeville, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:20-op-45273 N.D. Ohio
(Federal)
AL County of
Montgomery
Montgomery County, Alabama v. Purdue
Pharma L.P., et al. 1:18-op-45445 N.D. Ohio (Federal)
AL County of Morgan
Morgan County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45200 N.D. Ohio
(Federal)
AL County of Perry Perry County, Alabama v. Teva
Pharmaceuticals USA, Inc., et al. 1:20-op-45158 N.D. Ohio (Federal) AL County of Pickens
The Counties of Marion, Pickens and
Walker, Alabama and the Cities of Dora,
Jasper, Sumiton, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45171 N.D. Ohio
(Federal)
AL County of Pike
Pike County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45803 N.D. Ohio
(Federal)
AL County of Randolph
Elmore County, Alabama, and Randolph
County, Alabama v. Teva
Pharmaceuticals USA, Inc., et al.
1:22-op-45003 N.D. Ohio
(Federal)
AL County of Russell Russell County, Alabama v. Purdue
Pharma L.P., et al. 1:19-op-45826 N.D. Ohio (Federal)
AL County of Shelby Shelby County, Alabama v. Purdue
Pharma L.P., et al. 1:18-op-45414 N.D. Ohio (Federal)
AL County of St. Clair St. Clair County, Alabama v. Purdue Pharma L.P., et al. 1:18-op-45614 N.D. Ohio (Federal)
AL County of Sumter
Sumter County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45194 N.D. Ohio
(Federal)
AL County of Talladega Talladega County and City of Talladega, Alabama v. Cardinal Health, Inc., et al. 1:18-op-45190 N.D. Ohio (Federal) C-14
State Subdivision/Special
District Case Caption Case No. Jurisdiction
AL County of
Tallapoosa
Tallapoosa County, Alabama v.
AmerisourceBergen Drug Corporation et
al.
1:17-op-45097 N.D. Ohio
(Federal)
AL County of
Tuscaloosa
Tuscaloosa County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45196 N.D. Ohio
(Federal)
AL County of Walker
The Counties of Marion, Pickens and
Walker, Alabama and the Cities of Dora,
Jasper, Sumiton, Alabama v. Purdue
Pharma L.P., et al.
1:18-op-45171 N.D. Ohio
(Federal)
AL County of
Washington
Washington County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45180 N.D. Ohio
(Federal)
AL County of Wilcox
Wilcox County, Alabama v.
AmerisourceBergen Drug Corporation, et
al.
1:18-op-45181 N.D. Ohio
(Federal)
AL Cullman Regional
Medical Center, Inc.
The Health Care Authority of Cullman
County; Cullman Regional Medical
Center, Inc. v. Teva Pharmaceuticals
USA, Inc., et al.
1:19-op-46059 N.D. Ohio
(Federal)
AL
Dale County Health
Care Authority d/b/a
Dale Medical Center
Fort Payne Hospital Corporation; The
Bibb County Healthcare Authority; The
Dale County Health Care Authority;
Greene County Hospital Board; Jackson
Hospital & Clinic, Inc.; Escambia County
Alabama Community Hospitals, Inc.;
Mizell Memorial Hospital, Inc.; The
Tombigbee Health Care Authority;
Geneva County Health Care Authority;
Community Hospital, Inc.; The Sylacauga
Health Care Authority; Russellville
Hospital, Inc.; Lakeland Community
Hospital, Inc.; Monroe County
Healthcare Authority; Infirmary Health
Hospitals, Inc.; The DCH Health Care
Authority; The Healthcare Authority For
Baptist Health, An Affiliate Of UAB
Health System; Medical West Hospital
Authority, An Affiliate Of UAB Health
System; Evergreen Medical Center, LLC;
Gilliard Health Services, Inc.; Crestwood
Healthcare, L.P.; Triad Of Alabama,
LLC; QHG Of Enterprise, Inc.; Affinity
Hospital, LLC; Gadsden Regional
Medical Center, LLC; Foley Hospital
Corporation; The Health Care Authority
Of Clarke County, Alabama; BBH PBMC,
LLC; BBH, WBMC, LLC; BBH SBMC,
LLC; BBH CBMC, LLC; and BBH BMC,
LLC v. McKesson Corporation, et al.
CV-2021-
900016
AL - Circuit
Court of
Conecuh
County
(State)
AL DCH Health Care
Authority
The DCH Health Care Authority, The
Healthcare Authority for Baptist Health,
an affiliate of UAB Health System,
CV-2019-
000007 / CV2021-900016
AL - Circuit
Court of
Conecuh
C-15
State Subdivision/Special
District Case Caption Case No. Jurisdiction
Medical West Hospital Authority, an
affiliate of Uab Health System, Evergreen
Medical Center, LLC, Gilliard Health
Services, Inc., Crest Wood Healthcare,
L.P., Triad of Alabama, LLC, QHG of
Enterprise, Inc., Affinity Hospital, LLC,
Gadsden Regional Medical Center, LLC,
Foley Hospital Corporation, The Health
Care Authority Of Clarke County,
Alabama, BBH PBMC, LLC, BBH,
WBMC, LLC, BBH SB MC, LLC, BBH
CBMC, LLC, BBH BMC, LLC v. Purdue
Pharma L.P., et al. / Fort Payne Hospital
Corporation; The Bibb County
Healthcare Authority; The Dale County
Health Care Authority; Greene County
Hospital Board; Jackson Hospital &
Clinic, Inc.; Escambia County Alabama
Community Hospitals, Inc.; Mizell
Memorial Hospital, Inc.; The Tombigbee
Health Care Authority; Geneva County
Health Care Authority; Community
Hospital, Inc.; The Sylacauga Health
Care Authority; Russellville Hospital,
Inc.; Lakeland Community Hospital, Inc.;
Monroe County Healthcare Authority;
Infirmary Health Hospitals, Inc.; The
DCH Health Care Authority; The
Healthcare Authority For Baptist Health,
An Affiliate Of UAB Health System;
Medical West Hospital Authority, An
Affiliate Of UAB Health System;
Evergreen Medical Center, LLC; Gilliard
Health Services, Inc.; Crestwood
Healthcare, L.P.; Triad Of Alabama,
LLC; QHG Of Enterprise, Inc.; Affinity
Hospital, LLC; Gadsden Regional
Medical Center, LLC; Foley Hospital
Corporation; The Health Care Authority
Of Clarke County, Alabama; BBH PBMC,
LLC; BBH, WBMC, LLC; BBH SBMC,
LLC; BBH CBMC, LLC; and BBH BMC,
LLC v. McKesson Corporation, et al.
County
(State)
AL
Geneva County
Health Care
Authority d/b/a
Wiregrass Medical
Center
Fort Payne Hospital Corporation; The
Bibb County Healthcare Authority; The
Dale County Health Care Authority;
Greene County Hospital Board; Jackson
Hospital & Clinic, Inc.; Escambia County
Alabama Community Hospitals, Inc.;
Mizell Memorial Hospital, Inc.; The
Tombigbee Health Care Authority;
Geneva County Health Care Authority;
Community Hospital, Inc.; The Sylacauga
Health Care Authority; Russellville
CV-2021-
900016
AL - Circuit
Court of
Conecuh
County
(State)
C-16
State Subdivision/Special
District Case Caption Case No. Jurisdiction
Hospital, Inc.; Lakeland Community
Hospital, Inc.; Monroe County
Healthcare Authority; Infirmary Health
Hospitals, Inc.; The DCH Health Care
Authority; The Healthcare Authority For
Baptist Health, An Affiliate Of UAB
Health System; Medical West Hospital
Authority, An Affiliate Of UAB Health
System; Evergreen Medical Center, LLC;
Gilliard Health Services, Inc.; Crestwood
Healthcare, L.P.; Triad Of Alabama,
LLC; QHG Of Enterprise, Inc.; Affinity
Hospital, LLC; Gadsden Regional
Medical Center, LLC; Foley Hospital
Corporation; The Health Care Authority
Of Clarke County, Alabama; BBH PBMC,
LLC; BBH, WBMC, LLC; BBH SBMC,
LLC; BBH CBMC, LLC; and BBH BMC,
LLC v. McKesson Corporation, et al.
AL Greene County
Hospital Board
Fort Payne Hospital Corporation; The
Bibb County Healthcare Authority; The
Dale County Health Care Authority;
Greene County Hospital Board; Jackson
Hospital & Clinic, Inc.; Escambia County
Alabama Community Hospitals, Inc.;
Mizell Memorial Hospital, Inc.; The
Tombigbee Health Care Authority;
Geneva County Health Care Authority;
Community Hospital, Inc.; The Sylacauga
Health Care Authority; Russellville
Hospital, Inc.; Lakeland Community
Hospital, Inc.; Monroe County
Healthcare Authority; Infirmary Health
Hospitals, Inc.; The DCH Health Care
Authority; The Healthcare Authority For
Baptist Health, An Affiliate Of UAB
Health System; Medical West Hospital
Authority, An Affiliate Of UAB Health
System; Evergreen Medical Center, LLC;
Gilliard Health Services, Inc.; Crestwood
Healthcare, L.P.; Triad Of Alabama,
LLC; QHG Of Enterprise, Inc.; Affinity
Hospital, LLC; Gadsden Regional
Medical Center, LLC; Foley Hospital
Corporation; The Health Care Authority
Of Clarke County, Alabama; BBH PBMC,
LLC; BBH, WBMC, LLC; BBH SBMC,
LLC; BBH CBMC, LLC; and BBH BMC,
LLC v. McKesson Corporation, et al.
CV-2021-
900016
AL - Circuit
Court of
Conecuh
County
(State)
AL
Healthcare
Authority for
Baptist Health
The DCH Health Care Authority, The
Healthcare Authority for Baptist Health,
an affiliate of UAB Health System,
Medical West Hospital Authority, an
affiliate of Uab Health System, Evergreen
CV-2019-
000007 / CV2021-900016
AL - Circuit
Court of
Conecuh
County
(State)
C-17
State Subdivision/Special
District Case Caption Case No. Jurisdiction
Medical Center, LLC, Gilliard Health
Services, Inc., Crest Wood Healthcare,
L.P., Triad of Alabama, LLC, QHG of
Enterprise, Inc., Affinity Hospital, LLC,
Gadsden Regional Medical Center, LLC,
Foley Hospital Corporation, The Health
Care Authority Of Clarke County,
Alabama, BBH PBMC, LLC, BBH,
WBMC, LLC, BBH SB MC, LLC, BBH
CBMC, LLC, BBH BMC, LLC v. Purdue
Pharma L.P., et al. / Fort Payne Hospital
Corporation; The Bibb County
Healthcare Authority; The Dale County
Health Care Authority; Greene County
Hospital Board; Jackson Hospital &
Clinic, Inc.; Escambia County Alabama
Community Hospitals, Inc.; Mizell
Memorial Hospital, Inc.; The Tombigbee
Health Care Authority; Geneva County
Health Care Authority; Community
Hospital, Inc.; The Sylacauga Health
Care Authority; Russellville Hospital,
Inc.; Lakeland Community Hospital, Inc.;
Monroe County Healthcare Authority;
Infirmary Health Hospitals, Inc.; The
DCH Health Care Authority; The
Healthcare Authority For Baptist Health,
An Affiliate Of UAB Health System;
Medical West Hospital Authority, An
Affiliate Of UAB Health System;
Evergreen Medical Center, LLC; Gilliard
Health Services, Inc.; Crestwood
Healthcare, L.P.; Triad Of Alabama,
LLC; QHG Of Enterprise, Inc.; Affinity
Hospital, LLC; Gadsden Regional
Medical Center, LLC; Foley Hospital
Corporation; The Health Care Authority
Of Clarke County, Alabama; BBH PBMC,
LLC; BBH, WBMC, LLC; BBH SBMC,
LLC; BBH CBMC, LLC; and BBH BMC,
LLC v. McKesson Corporation, et al.