Monroe County, Bloomington opt out of state’s opioid settlement structure

In the last couple of weeks, Monroe County and Bloomington have opted out of the state of Indiana’s process for allocation of opioid settlement money.

It’s the allocation that might come, if a global settlement is made in a class action lawsuit that has been filed against several pharmaceutical companies. More than 2,000 pending federal lawsuits, including the joint action filed in February 2018 by Monroe County and Bloomington, have been consolidated in the Northern District of Ohio.

For the county, the opt-out vote by the three-member board of commissioners came at last week’s regular June 23 meeting. County councilors voted the day before, at a work session, to opt out of the state’s process.

A week before that, Bloomington’s city council voted to opt out.

What exactly did they opt out of? It’s the process outlined in a new statute enacted during this year’s legislative session, as part of the biennial budget bill.

By opting out, Bloomington and Monroe County, along with several other local governments statewide, will be pursuing their own settlements. They could also bring additional legal action against pharmaceutical companies. If they joined the state’s settlement option, they would not be able to initiate additional opioid lawsuits.

Under the new statute, the first split is 70-30: 70 percent of any settlements that are awarded would go towards statewide treatment, education, and prevention programs for opioid use disorder; 30 percent would go to agency settlement funds.

The 30 percent would be split half-and-half between the state and local governments. The 15-percent slice for local governments would be allocated based on population.

It is this 15 percent that local governments see as the only part of the state’s settlement structure over which they would have control. The other 85 percent of the money would be controlled by the state. It’s the reason for opting out that’s been cited by local jurisdictions across the state.

The 70-percent slice goes to the state’s secretary of family and social services. That’s a position in which  Bloomington’s mayor, John Hamilton, served from 2001 to 2003.  Half of the 70-percent chunk is supposed to go to eligible community-based treatment, education, and prevention programs for opioid use disorder or mental health issues.

The other half of the 70-percent chunk is supposed to be allocated based on regional areas defined by the secretary of family and social services. The regions are supposed to be based on population. The allocation of funds to regions can be based on factors like the impact of opioids—including overdoses and deaths—in those regions.

Under the new state statute, Bloomington and Monroe County could opt back in, if they make the decision within 60 days of their initial choice to opt out.

Bloomington and Monroe County’s joint lawsuit was filed in February of 2018. The outside counsel for both local governments is Cohen & Malad, an Indianapolis law firm.

How much money could be at stake? According to Monroe County attorney Margie Rice, it’s too early to tell and there are too many factors in play to be definitive.

Rice told The B Square that she has been told, “If the national settlement goes the way people expect it to go, Indiana’s share ‘may’ be somewhere between $260 million and half a billion dollars, depending upon how many local governments participate.” Rice added that most of the money would be paid over an 18-year period.

By way of comparison, Indiana receives an annual payment of about $120 million from the Tobacco Master Settlement. That’s about 1.5 percent of the $8 billion of annual allocation to all states, which is intended to recover costs connected to treating smokers’ health issues, according to Indiana’s state board of accounts.

In early June, Monroe County and Bloomington dismissed Walgreens Boots Alliance, Inc. as a defendant, because the company was determined to have “zero-percent market share in the relevant jurisdictions.”

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.