Don’t expect Baton Rouge opioid payout to reach tobacco settlement levels

    As Baton Rouge’s opioid lawsuit and others sit before an Ohio federal judge, the New York Times reports that lawyers from across the U.S. are predicting the potential payout will likely be less than half of what the four Big Tobacco companies agreed to pay more than 20 years ago in their landmark settlement with states.

    Burton LeBlanc, an attorney with Dallas-based Baron & Budd hired to represent Baton Rouge in its lawsuit against opioid distributors, says he never expected the overall opioid payout to come close to the more than $206 billion states received over 25 years from the tobacco settlement of 1998 (A chief negotiator recently told the Times that he didn’t expect to get over $100 billion this time around). Louisiana’s share of the settlement was an estimated $4.6 billion over the first 25 years, with payments continuing as long as tobacco products were sold within the state.

    What exactly the lower projections mean for Louisiana remains unclear, though it’s likely the state and municipalities will ultimately receive less than $4.6 billion.

    “With tobacco, they could raise the prices on cigarettes and use a tax to fund part of the settlement,” LeBlanc says. “We can’t do that with opioids.”

    There are other challenges unique to the opioid suit making it increasingly likely pharmaceutical companies won’t shell out nearly as much as tobacco companies. For instance, the four cigarette companies produced a single product whose dangers were undisputed; conversely, prescription opioids are beneficial for some patients and have claimed far fewer lives than cigarettes. Apportioning blame will also be tricky, as medications pass through various types of businesses as well as the federal government.

    LeBlanc declines to further speculate about how much money Louisiana or Baton Rouge could walk away with. Instead, he says the total settlement amount will depend on various factors, including the outcomes of the states’ trials against distributors, dispensers and manufacturers—some of which are in bankruptcy, like Purdue Pharma, the maker of OxyContin. 

    Moreover, the states still haven’t reached a settlement with distributors. LeBlanc says the terms of that arrangement, once finalized, will also come into play.

    So far, only two offers for a nationwide settlement have been disclosed. One is a $10 billion deal from Purdue Pharma that has been tentatively accepted by 24 states, including Louisiana, but is far from final.

    The other proposal—which comes from three drug distributors and two manufacturers—involves an estimated $48 billion to be paid over 18 years, but nearly half of that figure is an in-kind assessment of the value of addiction treatment drugs and distribution services that companies pledge to provide. LeBlanc is among many lawyers negotiating for cities and towns across the country who have called the proposal too skimpy, and last week he joined others in calling for further discussions.

    “While we don’t expect—and never expected—to get the same dollar amount, we still expect tremendous resources to be paid by these companies to combat problems related to the opioid crisis,” LeBlanc says. “If used appropriately, these funds will go a long way.”

    In a prepared statement, Mayor Sharon Weston Broome says a potential opioid settlement would be used to support “important opioid abuse treatments in East Baton Rouge Parish,” noting the ongoing litigation has already drawn attention to the opioid crisis and changed the way opioids are marketed to the public.

    View Comments