On Wednesday, Monroe County government and the city of Bloomington both opted back in to the state of Indiana’s process for allocation of settlement money from a class action lawsuit.
After deducting 8.7 percent in attorney fees, in the initial round of payouts, the two local governments look to net a total of around $4.6 million over a few years.
The breakdown would be $2,689,674 for Monroe County and $1,944,711 for Bloomington.
The proceeds will come from a global settlement in a class action lawsuit that was filed against several pharmaceutical companies. More than 2,000 federal lawsuits, including the joint action filed in February 2018 by Monroe County and Bloomington, were consolidated in the Northern District of Ohio.
For Monroe County, the opt-in action came at the regular Wednesday morning meeting of the three-member board of commissioners. For the city of Bloomington, the action came at the regular Wednesday evening meeting of the nine-member city council.
Monroe County’s higher amount, compared to Bloomington’s, is based on the statute defining the settlement program, which describes a method of allocating the money “according to a weighted distribution formula identified in settlement documents that accounts for opioid impacts in communities…”
Last year, both local governments opted out of the state of Indiana’s settlement program, as did most local units across the state. The terms were analyzed as unfavorable to local government.
Last year’s proposal from the state was outlined in a new statute enacted during the 2021 legislative session, as part of the biennial budget bill.
Under the 2021 statute, the first split would have been 70-30: 70 percent of any settlements that were awarded would have gone towards statewide treatment, education, and prevention programs for opioid use disorder; 30 percent would go to agency settlement funds.
The 30 percent was to be split half-and-half between the state and local governments. The 15-percent slice for local governments was to have been allocated based on population.
It is the last 15 percent that local governments saw as the only part of the state’s settlement structure over which they had control. That’s why most local jurisdictions across the state opted out.
What has changed to cause Monroe County and Bloomington to opt back in?
In the 2022 session, the state legislature enacted HB 1193, which left some things in the settlement program the same. Remaining unamended in the law is the halfway split between the state and local governments for 30 percent of the money—a 15-15 split.
The difference is that HB 1193 also makes a halfway split of the other 70 percent—35-35 each for the state and local governments.
That makes the local government share of the overall settlement 50 percent (15 + 35). The 15-percent piece (which is 30 percent of the local government share) is unrestricted in use. But the 35-percent piece (which is 70 percent of the local government share) has to be used for treatment, prevention, and care.
The settlement amounts listed in the meeting information packets for the county commissions and the city council are not final. They cover only the settlements with a subset of the defendants in the case: McKesson Corporation, Cardinal Health, Inc., AmerisourceBergen Corporation and the Johnson & Johnson.
There will be future settlements as well, that Bloomington will be able to take part in, as other pharmaceutical companies come to terms, according to Bloomington’s corporation counsel, Beth Cate.
Purdue Pharma is a company that has not yet settled in the opioid case, but is expected to.
Cate told the city council on Wednesday night that the attorney fee of 8.7 percent reflects a reduction from 33.33 percent that had been proposed last year.
Cities in Indiana have until July 1, to opt back in to the settlement. But the first installment in the series of multi-year payments is set to come in April, according to Cate, so there’s some incentive go ahead and opt in.
Among city councilmembers on Wednesday, there was some interest in understanding whether a named special fund would need to be established by the city to receive the settlement money. Cate told the city council that the city will have to account for how it spends the money—but she was not certain what the mechanism would be.
At the heart of the complaint against pharmaceutical companies is the first numbered paragraph:
1. Opioid addiction is ravaging Bloomington and Monroe County:
- In 2012, Monroe County had 93 opioid prescriptions for every 100 persons in the county and the rate peaked at 106 in 2008.
- During the first six months of 2017, 13 people died of opioid overdoses in Monroe County and the death toll is on pace to eclipse each of the previous two years.
- In December 2015, the Indiana state health commissioner declared a public health emergency due to hepatitis C outbreak in Monroe County.
- Monroe County authorities say the county jail is consistently over capacity largely due to Indiana’s opioid crisis.
- As of 2015, in Monroe County, heroin poisoning resulting in trips to IU Health Bloomington Hospital have increased by more than 50 percent.
The complaint accuses pharmaceutical companies of: causing a public nuisance; racketeering; negligence; unjust enrichment; and damages resulting from civil conspiracy.