Overnight Health Care — Presented by Partnership for America’s Health Care Future — Four companies reach $260M settlement in opioid lawsuit | Deal opens door to larger settlements | House panel to consider vaping tax | Drug pricing markup tomorrow

Welcome to Monday’s Overnight Health Care.

Drug manufacturers and distributors settled the landmark opioid lawsuit in Ohio before the federal trial started, a House panel will mark up legislation to tax e-cigarettes, and a doctors’ group spent millions on lobbying against surprise billing legislation just this quarter.

We’ll start with an update on the opioid trial: 

 

Four companies reach $260M settlement deal in opioid lawsuit

Monday was supposed to be the start of a landmark opioid trial in Cleveland, as the nation’s three largest drug distributors and one opioid manufacturer were set to face allegations they contributed to the opioid epidemic in two Ohio counties. But just one hour before opening statements were set to begin, a settlement was announced.

A federal judge combined more than 2,500 claims from courts across the country. Summit and Cuyahoga counties were set to go first as a test of how the plaintiff arguments will fare, but Judge Dan Polster, a Clinton appointee, had been urging all parties to settle for months. 

Attorneys said last-ditch efforts at reaching a global settlement collapsed late Friday, and the focus switched over the weekend to just Cuyahoga and Summit counties.

The details: According to plaintiffs’ attorneys, the “Big Three” distributors McKesson Corp., Cardinal Health Inc., AmerisourceBergen Corp., will pay a combined $215 million immediately. Manufacturer Teva Pharmaceutical Industries will pay $20 million cash between the end of this year and 2021 and provide $25 million worth of the anti-overdose drug Suboxone. 

More litigation likely: The counties said they are still prepared to go forward with a lawsuit against pharmacy chain Walgreens, which is being sued for its role as both a distributor and pharmacy and hinted that further litigation against pharmacies is on the table. The Walgreens trial was separated from the others that settled Monday and has been postponed. 

What’s next: Legal experts think the settlement buys time for the companies to settle the other lawsuits brought by municipalities. There are also incentives for states too.

Read more on the settlement here.

 

 

Four states announce $48 billion settlement framework in opioid lawsuits 

Just hours after announcing a settlement with two Ohio counties, almost all the same companies announced a framework for a $48 billion settlement with four state attorneys general. 

The settlement, which would involve Cardinal Health, McKesson, AmerisourceBergen, Johnson & Johnson and Teva, would include $22 billion in cash and $26 billion worth of a generic opioid addiction treatment, product distribution and data tracking measures.

The framework is an “agreement in principle” and has not been finalized. The attorneys general said they hoped other states would sign on.

“The opioid epidemic has ripped through our communities and left a trail of death and destruction in its wake,” said North Carolina Attorney General Josh Stein (D).

The details:  

• Each state and its local governments will receive a share of the $22 billion in cash to provide addiction treatment, paramedic services and telehealth treatment. 
• McKesson, a drug distribution company, would pay $6.68 billion over 18 years, the highest amount of all the companies in the settlement. 
• Cardinal Health and AmerisourceBergen, also drug distributors, would pay about $5.6 billion each over 18 years. 
• Johnson & Johnson, a drug manufacturer, would pay $4 billion over two to three years, while Teva would pay $250 million over 10 years. 
• Teva would also supply $23 billion of its generic suboxone product over 10 years. 

Read more here.

 

Private equity-funded doctors coalition spends $4 million lobbying on ‘surprise’ medical billing

A coalition of doctors groups owned by private equity firms and investment groups spent more than $4 million lobbying Congress last quarter on legislation that would end surprise medical bills.

Physicians for Fair Coverage spent $4.1 million between July 1 and Sept. 30, when the debate over surprise medical bills was heating up in Congress, according to lobbying disclosure reports filed Monday.

It’s a record-high amount for the relatively new coalition, which spent less than $5,000 on lobbying during the same time period last year. The group spent $120,000 between April 1 and June 30 and $25,000 from Jan. 1 to March 31.

The lobbying campaign comes as Congress seeks to pass legislation banning providers from billing patients for costs not covered by insurance companies.

The practice can result in patients receiving costly bills, even if they seek care at in-network facilities but are unknowingly treated by doctors who don’t participate in insurance networks and are employed by staffing firms. 

Read more here. 

 

House panel to consider vaping tax this week  

The House Ways and Means Committee is scheduled to consider a bill on Wednesday that would impose a tax on the nicotine used in vaping, Chairman Richard Neal (D-Mass.) announced Monday.

The panel will mark up a bipartisan bill introduced by Reps. Tom Suozzi (D-N.Y.) and Pete King (R-N.Y.), under which nicotine from vaping products would be taxed at the same rate as nicotine from cigarettes.

The Joint Committee on Taxation estimates that the bill would raise nearly $10 billion over a decade. Suozzi’s office said that the revenue raised by the vaping bill would be used to offset the cost of other bills the Ways and Means Committee is considering Wednesday that would require certain high-deductible health plans to cover the cost of inhalers, and that would allow people to use tax-advantaged accounts to purchase over-the-counter medications and menstrual-care products. 

The announcement of the markup comes as policymakers have expressed concerns about vaping products in light of the spike in teen vaping and the spread of a mysterious respiratory illness that has sickened more than 1,000 people and led to more than 30 deaths.

“I applaud Chairman Neal and my colleagues on the Ways and Means Committee for acting swiftly and decisively to get vaping products out of the hands of young people,” Suozzi said in a statement. “We must address this public health crisis now rather than waiting years to do so, as we did with cigarettes.”

Read more here.

 

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Coming tomorrow: Another drug pricing markup!

The House Ways and Means Committee will mark up Speaker Nancy Pelosi’s (D-Calif.) drug pricing bill tomorrow, after two other committees did last week. This one could be interesting, as Republicans are sure to offer a slew of amendments and on the Democratic side, Rep. Lloyd Doggett (D-Texas) is expected to offer amendments to try to push the bill to go further to the left, as he has been trying to for months.

 

What we’re reading: 

Partisan divide grows over opioid settlement plan (NPR)

What causes a mysterious paralysis in children? Researchers find viral clues (The New York Times) 

Three key Trump challenges to transgender and abortion rights (CNN) 

 

State by state 

Top Philly doctors make huge sums — through Big Pharma consulting side gigs (The Philadelphia Inquirer) 

As court case imperils ACA, some states prepare contingency plans (The Wall Street Journal) 

 

The Hill op-eds

True health reform depends on several critical policy elements 

Why Elizabeth Warren won’t talk about the cost of ‘Medicare for All’