YEAR-END REPORT - 2019 Published 23-Dec-2019 HPTS Issue Brief 12-23-19.17

Health Policy Tracking Service - Issue Briefs Healthcare Reform Opioid Crisis

Authored by Melissa D. Berry, principal attorney editor with Thomson Reuters and a member of the Ohio bar.

12/23/2019

I. Introduction Opioid Prescriptions, Overdose Deaths Most Common Among Low-income Whites (Reuters Health) - Of all racial/ethnic groups in the U.S., low-income whites are more likely to receive opioid prescriptions and to die from overdoses, three studies suggest. [FN1] “We propose that the prescription drug crisis should be thought of as a ‘double-sided’ epidemic, in which systematic racism within the healthcare system has led to increased addiction and overdoses among low-income white areas, but also insufficient treatment among nonwhite communities,” Joseph Friedman from David Geffen School of Medicine, UCLA, Los Angeles, California told Reuters Health by email. “These disparities may have ironically shielded communities of color from the brunt of the opioid epidemic,” he said. “Nevertheless, they also represent a lack of access to adequate treatment for pain and psychiatric conditions.” Recognizing that an opioid prescription is a key risk factor for long-term use, Friedman and colleagues evaluated the race/ethnicity- income gradient in exposure to opioids by the California healthcare system, using the percentage of individuals who received at least one prescription for an opioid each year as the metric of exposure of the population to opioids by the healthcare system. Each year from 2011 through 2015, 23.6% of all individuals in California aged 15 years or older received a prescription for an opioid medication, according to the February 11th JAMA Internal Medicine online report. The mean annual prevalence of opioid prescriptions was highest among individuals in the highest proportion-white/lowest-income quintile (44.2%) and lowest in the lowest proportion-white/highest-income quintile (16.1%). Overdose deaths in California during this period were also highly concentrated in the lower-income and mostly white areas, with 9.6 opioid overdose deaths each year per 100,000 people in the highest proportion-white/lowest-income quintile versus 1.3 in the lowest proportion-white/highest-income quintile. Benzodiazepine rates varied strongly across lines of race/ethnicity (much higher rates among white than nonwhite communities) but showed little variation by income status. Stimulant prescriptions, on the other hand, were highly concentrated among higher proportion- white/higher-income communities. “Discussions of race are remarkably absent from mainstream medical and political discussions of the opioid epidemic,” Friedman said. “We highlight systematic and profound racial disparities in the prescription of controlled substances, showing that race must be considered as a key dimension in discussion of controlled substances in the United States.” Dr. Mathew Kiang from Stanford University School of Medicine's Center for Population Health Sciences, Palo Alto, California, told Reuters Health, “Opioids are an important part of the physicians' toolbox. They're a powerful method of controlling a patient's pain level; however, they are also potentially dangerous to a small set of recipients. While this is an ecological study, as the authors note, and thus cannot determine if those who received opioid prescriptions were also those who subsequently overdosed on heroin, it still serves as a reminder that this powerful tool must be used carefully.” “I think this highlights a growing body of work that continues to put the opioid epidemic in the context of socioeconomic factors,” he said in an email interview. “Race/ethnicity and income are important social determinants of health and our policies to address the

-1- epidemic thus far have largely ignored them. We need to take into account the social and economic context of the epidemic in order to understand what is driving a subset of the population to using opioids for non-medical purposes.” Dr. Barry Meisenberg, Chair of Medicine and Medical Director of the DeCesaris Cancer Institute at the Anne Arundel Medical Center, Annapolis, Maryland, where multilevel interventions proved successful at reducing opioid overprescribing, told Reuters Health by email, “The results showing differential prescribing by micro regions for all three drug classes are profound and raise additional questions. We don't know if these results are explained by prescriber bias, differences in access, or increased patient demand in affluent areas or all three. Certain symptoms such as anxiety, pain and distraction may have different interpretations and meaning in different cultural subgroups creating different interest in receiving certain medications.” “This study adds to the body of evidence that clinician prescribing patterns are important drivers of long-term opioid dependence and overdose,” he said. “Clinicians must understand that their prescriptions can affect the health of entire communities. We have an individual and group responsibility to be cautious in our use of all of these medications.” In the second study, Bennett Allen and colleagues from the New York City Department of Health and Mental Hygiene, Queens, New York examined 2017 New York City data on overdose deaths to determine patterns related to age, race, and drug type. Among 1487 overdose deaths, 37.0% were among whites, 28.0% among blacks, 31.0% among Latinos, and 4.0% among other or undefined racial/ethnic groups. Among younger persons (aged 15-34 years), heroin and/or fentanyl overdose deaths per 100,000 New Yorkers were higher among whites (22.2) than among blacks (5.8) or Latinos (9.7). Among older persons (aged 55-84 years), however, these death rates were higher among blacks (25.4) than among whites (9.4). Older blacks also had significantly higher cocaine overdose death rates (25.4) than did whites (5.1) or Latinos (11.8). These findings “highlight the need for heterogeneous approaches to treatment and the equitable allocation of treatment and health care resources to reach diverse populations at risk of overdose,” the researchers conclude. In the third study, Dr. Gery P. Guy and colleagues from Centers for Disease Control and Prevention, Atlanta, Georgia examined opioid prescribing at national and county levels using data from the IQVIA Xponent database. From 2015 to 2017, the amount of opioids prescribed decreased 20.1% (from 641.4 to 512.6 morphine milligrams equivalents (MME) per capita), opioid prescribing rates decreased 16.9% (from 70.7 to 58.7 per 100 persons), high-dose prescribing decreased 25.3% (from 6.7 to 5.0 prescriptions of 90 or more MME per day per 100 persons), and the average daily MME per prescription decreased 6.0% (from 48.1 to 45.2 MME). Overall prescribing rates varied 4.6-fold and high-dose prescribing rates varied 7.1-fold between the highest and lowest prescribing counties. About three-quarters of counties experienced annual reductions in the amount of opioids prescribed (74.7%) averaging around 10%, compared with 3.6% annual reductions in 49.6% of counties from 2010 to 2015. The amount of opioids prescribed, however, remained nearly triple the amount prescribed in 1999. “Physicians stand out as natural leaders to help solve the crises because of the depth of their knowledge, immediacy of their contact with patients, and relatively high level of respect their profession enjoys,” write US Surgeon General Dr. Jerome M. Adams and Assistant Secretary for Health Dr. Brett P. Giroir, US Public Health Service, Washington, DC in a related invited commentary. “We thereby call on our nation's doctors to embrace their roles in the clinic and beyond to help educate communities, bring together stakeholders, and be part of the cultural change to support people living free from addiction.” “Although health care professionals have many ways to respond to the opioid crisis, we must also acknowledge that the problem cannot be solved by medical interventions alone,” they note. “Stopping the epidemic requires a public health approach that recognizes substance misuse and addiction are the result of interrelated individual, environmental, and societal factors, requiring diverse stakeholder cooperation to prevent, mitigate, and reverse.” Dr. Guy and Dr. Adams did not respond to a request for comments. ii. LEGISLATION & NEWS

2019 Actions

A. Addiction Treatment Maine Jail Must Provide Opioid Treatment to Inmate, Court Rules (Reuters) - A federal appeals court has upheld a decision requiring a Maine jail to provide medication to a woman who said she might relapse if she could not continue her treatment for opioid addiction while serving a 40-day sentence. [FN2] The 1st U.S. Circuit Court of Appeals in Boston on Tuesday affirmed a preliminary injunction issued by a judge who found the jail's refusal to treat Brenda Smith's opioid-use disorder likely violated her statutory and constitutional rights.

-2- The lawsuit is among at least three the American Civil Liberties has filed amid the nationwide opioid addiction epidemic concerning the rights of inmates to receive substance abuse treatment. Prisons in many states to not offer methadone or buprenorphine to opioid-addicted inmates. In two cases, including Smith's, judges have granted preliminary injunctions requiring jails to provide treatment to inmates after concluding that failure to do so can violate the Americans with Disabilities Act or the U.S. Constitution. The 1st Circuit's ruling came a day before Smith was scheduled to report to the Aroostook County Jail in Houlton, Maine, to begin her sentence after being convicted of theft in 2017. According to her lawyers, Smith has been in active recovery for opioid abuse for 10 years. For the last five years, she has been prescribed buprenorphine, an opioid also known as Suboxone used by people recovering from opioid dependency. Jail officials told her lawyers that she could not receive her medication while incarcerated, prompting her to file a lawsuit in September. U.S. District Judge Nancy Torresen in Bangor, Maine on March 27 ruled that Smith was likely to succeed in establishing Aroostook County Jail's prohibition on inmates continuing to use opioid replacements like buprenorphine violated her rights. The county had argued in court papers that the prohibition against buprenorphine, a “potent opiate,” was necessary to promote safety because the drug was “coveted jail contraband.” But Torrensen, after hearing testimony from Smith and medical corrections experts, found the evidence showed that because Smith suffers from opioid dependence denying her necessary medication would amount to disability discrimination. The judge called the jail's decision an “out-of-hand, unjustified denial,” which would cause Smith irreparable harm. Aroostook County appealed. In a brief order, a three-judge panel of the 1st Circuit on Tuesday said it found “no abuse of discretion by the district court in its preliminary assessment of the issues that must be balanced in deciding a request for preliminary injunctive relief.” The panel included U.S. Circuit Judges Jeffrey Howard, Sandra Lynch and William Kayatta. Emma Bond, a lawyer with the ACLU of Maine, in a statement said the ruling sends a message that jails need to provide inmates with their doctor-prescribed medicine for opioid use disorder, just like they would for any other medical condition. “Other facilities should take note and do the right thing, and not wait for further legal action,” she said. Peter Marchesi, a lawyer for the county, said the jail was disappointed with the ruling as it believed it cannot safely dispense the opioid replacement medication without further funding to develop proper funding and to conduct training. The case is Smith v. Aroostok County, 1st U.S. Circuit Court of Appeals, No. 19-1340. In States with Most Overdose Deaths, Poor Patients Struggle to Find Treatment (Reuters Health) - Poor people with opioid use disorders may struggle to find doctors to prescribe the anti-addiction drug buprenorphine in U.S. states with the highest overdose death rates, a new study suggests. [FN3] In 2018, researchers posing as patients called to schedule appointments for a buprenorphine prescription at 1,092 clinics with 546 clinicians who could offer the drug. The clinics were located in the places with high rates of opioid overdose deaths in 2016: Massachusetts; Maryland; New Hampshire; Ohio; West Virginia; and Washington, D.C. These “secret shoppers” said they were uninsured or had coverage through Medicaid, the U.S. health program for the poor. When callers got through to appointment schedulers, clinicians offered appointments to just 54 percent of Medicaid “patients” and 62 percent of uninsured “patients.” And “patients” were told they could get buprenorphine prescriptions at their first visit just 27 percent of the time with Medicaid and 41 percent of the time when they were uninsured. “It can be hard to find the doctor that accepts your insurance and has openings, but there are doctors out there who can offer quick access,” said senior study author Dr. Michael Barnett of the Harvard T. H. Chan School of Public Health in Boston. “The tough part is finding them,” Barnett said by email. Buprenorphine is considered among the best options for treating opioid use disorder because it reduces cravings for heroin and other opioids by binding to the same receptors in the brain that respond to opioids. Buprenorphine can be dispensed in outpatient clinics, making it more convenient than rehab options that require an overnight stay. And the medication rapidly relieves withdrawal symptoms without causing a euphoric high. “Because users have much less need to seek dangerous opioids like heroin or fentanyl while on buprenorphine, their risk for overdose is much lower,” Barnett said. “Getting quick access to treatment can be very important because data shows that treatment delays are a high risk period for repeated overdose.” Wait times for buprenorphine appointments in the study were similar regardless of the type of clinician or the type of insurance.

-3- Half of the “patients” couldn't get an initial appointment for buprenorphine for at least six days with Medicaid coverage and five days without insurance. And, half of the patients couldn't start taking buprenorphine for at least eight days after their initial office visit with Medicaid and at least seven days without insurance. However, some “patients” would have waited almost two weeks to start treatment. Without insurance, half of the patients would pay at least $250 to start taking buprenorphine. And 19 providers, or 5 percent, said the cost would be at least twice that high. Half of the clinicians who discussed pricing also said there could be additional fees for urine drug testing or other lab work before patients could start taking buprenorphine. The study wasn't a controlled experiment designed to prove whether or how appointment availability or treatment timing might directly impact outcomes for patients seeking buprenorphine. One limitation of the study is that it excluded most U.S. states, researchers note in the Annals of Internal Medicine. Another drawback is that the states that were included all expanded Medicaid eligibility under Obamacare, which might impact both access and affordability of buprenorphine treatment - but the study couldn't account for that. It's also not clear from the study why it's harder to get seen with Medicaid, said Dr. Pooja Lagisetty of the University of Michigan in Ann Arbor, an author of an accompanying editorial. Doctors might not accept Medicaid because of legal or “red tape” concerns like excessive paperwork, or because of low reimbursement rates, or some combinations of these issues, Lagisetty said by email. “Willing clinicians are often available for same-day or appointments within a week, demonstrating that they do have availability, and many said yes and had short wait times,” Lagisetty said. “However, there was a very large proportion of clinicians who couldn't even be reached,” Lagisetty added. “It is unclear whether these clinicians are saying no because they are at capacity versus they are just not providing treatment at all -- I suspect many may fall into the latter category.” Legislative Actions

Arkansas

• 2019 AR H.B. 1656 (NS), engrossed April 3, to amend the prior Authorization Transparency Act; to prohibit prior authorization for medication-assisted treatment; and to declare an emergency. • 2019 AR S.B. 546 (NS), filed March 12, to direct the Department of Human Services to apply for a State Plan amendment to allow opioid addiction treatment in an eligible institution for mental disease, to declare an emergency and for other purposes.

Colorado

2019 CO S.B. 8 (NS), engrossed April 30, concerning treatment of individuals with substance use disorders who come into contact with the criminal justice system, and, in connection therewith, and making an appropriation.

Indiana

• 2019 IN S.B. 462 (NS), introduced January 14, extends the expiration date of the maternal neonatal opioid addiction project to January 1, 2022. Makes an appropriation from the state general fund to the project. • 2019 IN H.B. 1543 (NS), enrolled April 29, provides that when determined by the treatment plan to be medically necessary, the office of Medicaid policy and planning shall provide coverage for inpatient detoxification using the American Society of Addiction Medicine Patient Placement Criteria.

Kentucky

2019 KY H.B. 513 (NS), adopted March 26, relating to substance use disorder treatment and recovery services and programs.

Louisiana

• 2019 LA H.B. 250 (NS), engrossed April 29, requires residential treatment facilities to provide access to medication-assisted treatment for patients with opioid use disorder. • 2019 LA S.B. 240 (NS), engrossed May 6, relative to the provision of medication-assisted treatment (MAT); to provide authority for advanced practice registered nurses and physician assistants to provide MAT; to provide for compliance with federal law and state rules relative to MAT; to provide for minimum requirements for collaborating or supervising physicians; and to provide for related matters.

-4- Maine

2019 ME S.P. 539 (NS), introduced April 30, requires the Department of Health and Human Services to establish the Low Barrier Opioid Treatment Response Program in Maine's federally qualified health centers to improve the availability of medication-assisted treatment and enhance the effectiveness and sustainability of acute care responses to persons in urgent need of treatment for substance use disorders, including opioid use disorder.

Minnesota

2019 MN H.F. 630 (NS), introduced January 31, relating to opioid addiction prevention, education, intervention, treatment, and recovery provisions established; advisory council created; and money appropriated.

Montana

2019 MT H.B. 771 (NS), introduced March 25, to provide for increased access to medication assisted treatment.

New York

2019 NY A.B. 295 (NS), introduced January 9, requires insurers providing coverage of prescription drugs for opioid addiction, to provide coverage of such prescription drugs prescribed for the treatment of substance abuse disorder.

North Carolina

2019 NC H.B. 1001 (NS), introduced April 29, to provide expansion, maintenance, and start-up grant funds for existing and newly created county jail or detention center treatment programs that are currently using or will use non-opioid, long-acting, injectable treatment regimens for inmates suffering from alcohol dependence, opioid dependence, or both, with a priority in grant distribution to go to Forsyth, Nash, New Hanover, Onslow, and Rutherford counties and to appropriate funds.

Tennessee

2019 TN S.J.R. 170 (NS), introduced February 7, to authorize the governor to expand Medicaid eligibility in accordance with the Patient Protection and Affordable Care Act to fully combat the opioid crisis in Tennessee.

Rhode Island

• 2019 RI S.B. 680 (NS), amended/substituted June 13, establishes the medication assisted treatment (MAT) program which uses medications, in combination with counseling and behavioral therapies, to create a comprehensive approach to the treatment of substance use disorders. • 2019 RI H.B. 6189 (NS), introduced June 6, establishes an opioid stewardship payment program which manufacturers and distributors of opioids would pay into, to support opioid treatment programs. • 2019 RI S.B. 798 (NS), amended/substituted June 20, would establish an opioid stewardship payment program requiring manufacturers and distributors of opioids to pay an amount, based on the amount of opioids manufactured or distributed, into a fund which would be used to support programs operated by the department of behavioral healthcare, developmental disabilities and hospitals (BHDDH), the executive office of health and human services (EOHHS), the department of children, youth and families (DCYF), the Rhode Island department of education (RIDE), the Rhode Island office of veterans' affairs (RIOVA), etc. B. Disposal of Controlled Substances Legislative Actions

Hawaii

2019 HI H.B. 734 (NS), introduced January 22, requires a health care professional or pharmacist who dispenses any opioid drug to include with the drug instructions for disposing of any unused portion, along with a pre-addressed envelope or package that can be used to mail any unused portion to a medication disposal program in the state at no cost to the person to whom the drug was dispensed.

C. Opioid Antagonists

Opioid Overdose Deaths Decline When Pharmacists Can Dispense Naloxone (Reuters Health) - In states where pharmacists were allowed to sell the potentially lifesaving opioid antidote naloxone without a prescription, fewer people died from opioid overdoses, a new U.S. study finds. [FN4]

-5- The passage of laws that let pharmacists sell naloxone directly to patients was associated with a nearly 30 percent drop in the number of opioid overdose deaths compared to states without pharmacist dispensing, researchers report in JAMA Internal Medicine. “This is additional evidence that naloxone laws that focus on broad access in distribution are effective in reducing opioid related harm,” said study coauthor Rosalie Liccardo Pacula, senior economist and co-director of the Drug Policy Research Center at the RAND Corporation in Santa Monica, California. “Pharmacies are everywhere so they are easy access points.” One of the big advantages of allowing pharmacists to sell naloxone without prescriptions is that they are the ones talking to patients when fulfilling prescriptions for opioids, she noted. “The pharmacists are interacting regularly with patients when they are picking up opioids,” Pacula said. “If it's a parent who is picking up opioids for a child who is getting them because of a surgery, the doctor may not have talked to the parent about the risks of the drugs. This provides a window for the pharmacist to raise the parents' awareness of the risks associated with opioids.” To look at the impact of naloxone-related laws, Pacula and her colleagues turned to multiple databases, including 2010-2016 State Drug Utilization Data, in which outpatient drug use information for medications covered by state Medicaid agencies is recorded, and the National Center for Health Statistics System for 2005-2016 for opioid mortality figures. When the researchers examined the laws involving naloxone prescriptions, they found that few states had any form of legislation before 2010. By 2016, 47 states had passed some sort of law regarding the life-saving medication, but only nine had laws giving authority to pharmacists to sell naloxone directly to patients. The rates of monthly fatal overdoses between 2005 and 2016 were high, at 0.59 per 100,000 people, Pacula and her coauthors note. But the quarterly rate of Medicaid prescriptions for naloxone were not substantial: 0.046 per 100,000 beneficiaries between 2010 and 2016. When the researchers compared the 2016 average number of opioid deaths in states that had not given direct authority to pharmacists to dispense naloxone, to those that had, they found direct dispensing was associated with a 27 percent lower rate of overdose deaths. The researchers also noted that in the states that had a decline in death rates, there was an increase in visits to the emergency rooms for non-fatal overdoses. While the new study does show an association between direct dispensing laws and lower rates of overdose deaths, it doesn't prove that the laws caused the reduction in deaths, said Dr. Michael Lynch, medical director of the Pittsburgh Poison Center at the University of Pittsburgh Medical Center in Pennsylvania. But it is suggestive, he said. A big question, said Lynch, who wasn't involved in the study, is how people who don't get their drugs from a prescription would realize they can get naloxone from their pharmacist. “Most overdose deaths from opioids lately are related to nonprescription opioids,” Lynch said. “What will prompt a pharmacist to recommend that a patient get naloxone who doesn't have an opioid prescription?” As for the increase in emergency room visits, Lynch says that is a good thing. While naloxone can reverse an overdose, patients still need to be seen by a doctor. Further, this can be an opportunity to suggest rehab to the patient, Lynch said. Teens May Struggle to Get Opioid Overdose Drug at U.S. Pharmacies (Reuters) - Despite state laws expanding access to the opioid-overdose antidote naloxone without a prescription, a new study suggests that many pharmacies don't stock the drug or dispense it to young people who need it. [FN5] In the 10 U.S. states with the most opioid overdose deaths in 2016, roughly four in five drugstores stocked naloxone, a survey of 120 pharmacists found. But nearly half of these pharmacists incorrectly thought that they could only dispense the treatment to adults. “Hindering access to naloxone to youth who are able to recognize the signs of an overdose and administer this life-saving medication undermines the effectiveness of these policies,” said Dr. Andrew Adesman, chief of developmental and behavioral pediatrics at Cohen Children's Medical Center of New York in Lake Success and senior author of the study. Overdoses of opioids like morphine or heroin can be deadly because these drugs slow breathing, thereby reducing the supply of oxygen to the body. Naloxone blocks the ability of opioids to affect the nervous system, including the regulation of breathing. The trouble with any delays or roadblocks in access to naloxone is that it needs to be given quickly to be effective in countering the potentially fatal effects of an opioid overdose. “If a pharmacy was not willing to provide naloxone to an adolescent, they could still obtain the medication through a prescription from their doctor, or, theoretically, if they were accompanied by a parent or other adult,” said Kirk Evoy of the University of Texas at Austin College of Pharmacy and University Health System in San Antonio. “I think the biggest concern would be teens who didn't feel comfortable disclosing opioid use to a doctor or parent, whether it be their own use or a friend's use, and thus decided to give up trying to obtain it after initially being turned away,” Evoy, who wasn't involved in the study, said by email.

-6- Most pharmacy employees surveyed correctly stated that no prescription was needed for naloxone, researchers report in the Journal of Adolescent Health. And most also understood that people were allowed to get naloxone to use for another individual who might be at risk for an overdose. But only 52% of pharmacists correctly stated that there was no minimum age for purchasing naloxone. Among chain drugstores in the survey, Walmart and Walgreens were more likely to stock naloxone than CVS. Where drugstores did stock naloxone, 67% carried only the nasal spray form of the drug and 12% only dispensed injected versions. The study wasn't a controlled experiment designed to prove whether or how drugstore availability of naloxone might directly impact teen access to the treatment or overdose deaths. One limitation is that it only focused on 20 drugstores in each of the states examined, and it is possible survey results from this small sample of pharmacists might not reflect naloxone access nationwide. It's also possible that some pharmacists incorrectly believe there are age restrictions for naloxone because there are other drugs with age restrictions like smoking cessation aids, said Talia Puzantian, a researcher at the Keck Graduate Institute School of Pharmacy and Health Sciences at the University of Southern California in Los Angeles. “Without naloxone on hand, the risk for fatal overdose is significant,” Puzantian, who wasn't involved in the study, said by email. “Increasingly, adolescents are using and misusing both prescription opioids and illicit opioids,” Puzantian said. “As prescription opioids become more difficult and costly to obtain, users are increasingly using the riskier illicitly manufactured pills or heroin which are increasingly adulterated with the more potent opioid fentanyl which is now driving the majority of opioid overdose deaths.” Legislative Actions

Colorado

2019 CO S.B. 227 (NS), engrossed April 30, concerning the reduction of harm caused by substance use house disorders, and, in connection therewith, authorizing schools to obtain a supply of opiate antagonists; specifying that a licensed or certified hospital may be used as a clean syringe exchange site; creating the opiate antagonist purchase fund; expanding the hold medication take-back program in the Senate Department of Public Health and Environment; authorizing a person that makes an automated external defibrillator available to the public to also make an opiate antagonist available; and other related provisions.

Connecticut

• 2019 CT H.B. 5909 (NS), introduced January 23, to allow public access to opioid antagonists without a prescription when a person is at risk of an opioid-related drug overdose. • 2019 CT H.B. 6535 (NS), introduced January 28, to expand the good Samaritan law to property owners and administrators who keep opioid antagonists on their property. • 2019 CT H.B. 6763 (NS), introduced January 29, to equip institutions of higher education for the treatment or prevention of opioid- related drug overdoses on campus. • 2019 CT H.B. 7190 (NS), enrolled June 25, to extend good Samaritan protections to persons or entities that include an opioid antagonist within a cabinet containing an automatic external defibrillator.

Florida

• 2019 FL S.B. 1064 (NS), introduced March 5, authorizing a public school to purchase a supply or enter into an arrangement to receive a supply of the opioid antagonist naxolone for a certain purpose; providing that a school district and its employees, agents, and the physician who provides the protocol are not liable for any injury arising from the administration of the naloxone, etc. • 2020 FL H.B. 331 (NS), filed October 10, Authorizes public school to purchase supply or enter into arrangement to receive supply of opioid antagonist naloxone for certain purpose; specifies requirements for maintenance of naloxone; requires school district to adopt protocol for administration of naloxone; provides that school district & its employees & agents & physician who provides protocol are not liable for any injury arising from administration of naloxone pursuant to protocol; provides exceptions. A bill to be entitled an act relating to naloxone in schools; and other related provisions. • 2020 FL H.B. 3879 (NS), filed November 19, provides an appropriation for the Extended-Release Injectable Naltrexone Program.

Idaho

2019 ID H.B. 12 (NS), introduced January 14, amends existing law to revise provisions regarding opioid antagonists.

New Jersey

-7- 2018 NJ S.R. 98 (NS), adopted March 14, urges county prosecutors to require all law enforcement officers be equipped with naloxone.

New York

• 2019 NY A.B. 307 (NS), introduced January 9, establishes an online director for distributors of opioid antagonists. • 2019 NY A.B. 448 (NS), introduced January 9, requires certain eligible persons or entities to acquire and possess opioid antagonists.

Oklahoma

2019 OK H.B. 1180 (NS), prefiled January 16, relating to opiate antagonist; permitting certain persons to provide; effective date; emergency.

Rhode Island

• 2019 RI S.B. 799 (NS), introduced April 10, would prohibit an insurer from denying the application of a person or exclude or limit coverage for the person under a group policy for life insurance products based solely on the fact that the person has a prescription to carry or possess the drug naloxone. • 2019 RI H.B. 5536 (NS), amended/substituted May 15, the Good Samaritan Overdose Prevention Act of 2016 would provide that law enforcement personnel, emergency medical personnel, and agencies participating in the HOPE initiative be exempt from civil liability or criminal prosecution as a result of administering opioid antagonists. • 2019 RI. S.B. 953 (NS), introduced June 5, relating the Good Samaritan Overdose Prevention Act of 2016, which provides that law enforcement personnel, emergency medical personnel, and agencies participating in the HOPE initiative be exempt from civil liability or criminal prosecution as a result of administering opioid antagonists. • 2019 RI H.B. 6184 (NS), introduced June 5, prohibits insurer from denying application/exclude/limit coverage under any life insurance policy based solely on prescription to carry or possess naloxone. • 2019 RI S.B. 409 (NS), amended/substituted June 25, would require private schools in addition to public schools to provide and maintain on-site in each school facility opioid antagonists (e.g. Narcan) and would also provide that the law would apply to elementary schools as well as middle and upper schools. • 2019 RI H.B. 6086 (NS), amended/substituted June 27, would require private schools in addition to public schools to provide and maintain on-site in each school facility opioid antagonists (e.g. Narcan) and would also provide that the law would apply to elementary schools as well as middle and upper schools.

Texas

2019 TX S.B. 340 (NS), amended/substituted April 23, relating to the creation of a grant program to assist law enforcement agencies with the purchase of opioid antagonists.

Virginia

2018 VA H.B. 2158 (NS), introduced January 9, expands the list of individuals who may dispense naloxone pursuant to a standing order to include emergency medical services personnel and health care providers providing services in hospital emergency departments and eliminates the requirements (i) that an organization providing services to individuals at risk of experiencing an opioid overdose or training in the administration of naloxone for overdose reversal obtain a controlled substances registration prior to dispensing naloxone, (ii) that naloxone dispensed on behalf of the organization be dispensed by a person who is authorized to train individuals on the administration of naloxone, and (iii) that individuals to whom naloxone is dispensed complete a training program prior to dispensing. The bill also provides that a person who dispenses naloxone shall not be required to obtain a permit to operate a pharmacy or a controlled substances registration and allows a person who dispenses naloxone to charge a fee for dispensing of naloxone provided the fee is no greater than the cost to the organization of obtaining the naloxone dispensed. Administrative Actions

Colorado

The Department of Health Care Policy and Financing intends to submit a State Plan Amendment to the Centers for Medicare and Medicaid Services (CMS) to increase the reimbursement rate for injectable opioid antagonists to average sales price plus 2.2%, effective November 26, 2019. See 2019 CO REG TEXT 540429 (NS). D. Opioid Prescription Monitoring Legislative Actions

-8- Florida

2019 FL H.B. 375 (NS), adopted June 7, authorizes DOH to enter into reciprocal agreements to share prescription drug monitoring information with specified federal agencies; exempts from requirement to check patient's dispensing history the prescribing of or dispensing controlled substance to patients admitted to hospice for alleviation of pain related to terminal condition or to patients receiving palliative care for terminal illnesses.

Hawaii

2019 HI S.B. 536 (NS), amended/substituted April 25, clarifies that existing law intended to curb over-access to and abuse of opioids, including the time frame for filling prescriptions, supply limitations, and requirements to check the state electronic prescription accountability system and execute an informed consent process, do not apply to qualified patients who are prescribed or issued prescriptions pursuant to the State's Our Care, Our Choice Act.

Minnesota

• 2019 MN S.F. 915 (NS), introduced February 7, providing certain agencies access to the Minnesota prescription monitoring program to identify and investigate inappropriate prescribing or dispensing of controlled substances. • 2019 MN S.F. 858 (NS), introduced February 7, requiring certain uses of the Minnesota prescription monitoring program. E. Pain Management Options Legislative Actions

Florida

• 2019 FL H.B. 1073 (NS), filed February 25, requires health care practitioners to refer or prescribe nonpharmaceutical interventional therapies for chronic nonmalignant pain or acute pain before prescribing opioid; requires licensed massage therapist to maintain & submit certain patient records to practitioner; requires insurance to cover specified number of therapies. • 2019 FL S.B. 1360 (NS), introduced March 5, requiring a practitioner who prescribes controlled substances to recommend specified alternative treatments for chronic nonmalignant pain before prescribing a controlled substance to a patient; requiring certain insurance policies to provide coverage for a minimum number of visits to alternative treatment providers for the treatment of chronic nonmalignant pain under certain conditions, etc. • 2019 FL S.B. 630 (NS), introduced March 5, requiring the Department of Health to establish a voluntary nonopioid directive form; authorizing a patient to appoint a duly authorized guardian or health care proxy who may revoke a voluntary nonopioid directive; providing that certain persons are not liable for damages or subject to criminal prosecution under certain circumstances, etc. • 2019 FL S.B. 398 (NS), introduced March 5, prohibiting health insurance policies from requiring that treatment with an opioid analgesic drug product be attempted and have failed before authorizing the use of a nonopioid-based analgesic drug product, etc. • 2019 FL H.B. 451 (NS), enrolled April 30, requires DOH to develop and publish on its website educational pamphlet regarding use of nonopioid alternatives for treatment of pain; provides requirements for health care practitioners.

North Carolina

• 2019 NC H.B. 318 (NS), introduced March 12, establishing the right of patients to elect nonopioid prescriptions and treatment, establishing a process by which patients may opt out of opioid prescriptions and treatment, and requiring the department of health and human services to develop and make available on its internet web site an official form for patients to voluntarily opt out of opioid prescriptions and treatment. • 2019 NC S.B. 544 (NS), filed April 2, directing health care providers to initiate acute or chronic pain management care with non-opioid treatment alternatives, whenever possible; directing the department of health and human services to develop and make available on its internet web site a uniform voluntary non-opioid directive form; establishing a process for patients to voluntarily elect non-opioid pain management care; and establishing insurance coverage for non-opioid pain management care.

Rhode Island

• 2019 RI H.B. 5434 (NS), introduced February 14, would exclude chronic intractable pain from the definition of “acute pain management”, for purposes of prescribing, administering and dispensing controlled substances by a practitioner. The act would prescribe new guidelines for the treatment of “chronic intractable pain” based upon 2016 CDC Guideline for Prescribing Opioids for Chronic Pain.

-9- • 2019 RI S.B. 143 (NS), amended/substituted June 20, would require that professionals authorized to prescribe opioid drugs discuss addiction risks and when appropriate alternative treatments with patients prior to the third time the opioid drug is provided by prescription or refill of a prescription. 2019. F. Public Education & Overdose Reporting Legislative Actions

Connecticut

2019 CT H.B. 6531 (NS), introduced January 28, to require reporting of an opioid overdose to a patient's primary care physician.

Louisiana

2019 LA H.B. 243 (NS), engrossed April 29, relative to enhancing data reporting of fatal and nonfatal opioid-related overdoses; to provide for the reporting, tracking, and monitoring of opioid-related overdoses by emergency departments; to require reporting by coroners of opioid- related overdose deaths where opioids are present; to authorize first responders to report opioid-related overdoses; to provide for a public records exception; and to provide for related matters.

Minnesota

• 2019 MN S.F. 256 (NS), introduced January 17, to establish an opioid overdose reduction pilot program and an appropriation. • 2019 MN H.F. 99 (NS), introduced January 17, to establish an opioid overdoes reduction pilot program and an appropriation.

Rhode Island

2019 RI S.B. 1032 (NS), introduced June 27, would require that instruction in health and physical education include information provided to students that mixing opioids and alcohol can cause accidental death. G. Restrictions on Prescribing Opioids Legislative Actions

Colorado

• 2019 CO S.B. 79 (NS), engrossed March 12, concerning a requirement that certain practitioners prescribe controlled substances electronically. • 2019 CO S.B. 228 (NS), engrossed May 1, concerning measures to prevent substance abuse, and, in connection therewith, requiring certain prescribers to complete substance use disorder training; prohibiting physicians and physician assistants from accepting benefits for prescribing specific medications; requiring opioid prescriptions to bear warning labels; and other related measures.

Connecticut

• 2019 CT H.B. 5544 (NS), introduced January 17, to require the establishment of pain contracts. • 2019 CT S.B. 446 (NS), introduced January 23, to reduce health care costs and improve medication adherence by mandating that pharmacies dispense only that opioid medication that is contained in blister packs.

Florida

• 2019 FL S.B. 592 (NS), introduced March 5, expanding the exceptions to a requirement that a prescriber or dispenser must consult the program to review a patient's controlled substance dispensing history before prescribing or dispensing a controlled substance for a patient of a certain age, etc. • 2019 FL H.B. 375 (NS), amended/substituted March 14, exempts from requirement to check patient's dispensing history the prescribing of or dispensing controlled substance to patients admitted to hospice for alleviation of pain related to terminal condition or to patients receiving palliative care for terminal illnesses.

Hawaii

• 2019 HI H.B. 690 (NS), introduced January 22, clarifies that existing law intended to curb over-access to and abuse of opioids, including the time frame for filling prescriptions, supply limitations, and requirements to check the state electronic prescription accountability system and execute an informed consent process, do not apply to qualifying patients who are prescribed or issued prescriptions pursuant to the state's Our Care, Our Choice Act.

-10- • 2019 HI S.B. 536 (NS), amended/substituted March 14, clarifies that existing law intended to curb over-access to and abuse of opioids, including the time frame for filling prescriptions, supply limitations, and requirements to check the state electronic prescription accountability system and execute an informed consent process, do not apply to qualifying patients who are prescribed or issued prescriptions pursuant to the State's Our Care, Our Choice Act. • 2019 HI S.B. 807 (NS), amended/substituted March 14, specifies the conditions in which health care providers are not required to consult the electronic prescription accountability system before prescribing controlled substances.

Indiana

• 2019 IN H.B. 1295 (NS), introduced January 14, limits an opioid prescription for an animal to a seven-day supply unless a listed exception applies. Allows a veterinarian to obtain information about the owner of the animal or the individual to whom an opioid or benzodiazepine will be dispensed for the animal from the Indiana scheduled prescription electronic collection and tracking (INSPECT) program data base before prescribing an opioid or benzodiazepine for the animal. • 2019 IN S.B. 176 (NS), adopted April 18, allows certain prescriptions to be transmitted electronically; requires dentists, physicians, advanced practice registered nurses, optometrists, physician assistants, and podiatrists to issue a prescription for a controlled substance in an electronic format and by electronic transmission after December 31, 2020; provides exceptions to issuing an electronically transmitted prescription for a controlled substance; requires the Indiana board of pharmacy to adopt rules concerning electronically transmitted prescriptions for controlled substances and other related provisions.

Michigan

2019 MI S.B. 254 (NS), introduced April 9, proposing a requirement for opioid and benzodiazepine prescriptions to be electronically transmitted to pharmacies; provide for under certain circumstances.

Minnesota

2019 MN S.F. 859 (NS), introduced February 7, limiting the time for filling prescription drug orders for opioid drugs.

Missouri

2019 MO H.B. 491 (NS), introduced January 9, prohibits a physician from prescribing opioids to a person under the age of eighteen, except for under certain circumstances.

Rhode Island

2019 RI H.B. 5537 (NS), amended/substituted June 19, to restrict the initial prescription to an adult and all prescriptions to a minor patient for an opiate to a seven (7) day supply with exceptions for certain conditions and medicines designed for substance abuse or opioid dependence treatment.

Vermont

2019 VT H.B. 174 (NS), introduced February 6, relating to limits on the prescription of opioids and creating a private right of action for prescriptions in excess of those limits.

Washington

The Washington Dental Quality Assurance Commission has adopted new sections and changes to existing rule that establishes requirements and standards for prescribing opioid drugs by dentists. The adopted rules are the result of a supplemental hearing. The rules provide a necessary framework and structure for safe, consistent opioid prescribing practice consistent with the directives of ESHB 1427. See 2019 WA REG TEXT 467653 (NS).

H. Warning Labels

Legislative Actions

Colorado

2019 CO S.B. 228 (NS), engrossed May 1, concerning measures to prevent substance abuse, and, in connection therewith, requiring certain prescribers to complete substance use disorder training; prohibiting physicians and physician assistants from accepting benefits for prescribing specific medications; requiring opioid prescriptions to bear warning labels; and other related measures.

Connecticut

-11- 2019 CT H.B. 6872 (NS), introduced January 30, to inform patients regarding the potency and possible negative consequences of taking prescription opiate drugs.

Florida

• 2019 FL H.B. 287 (NS), filed January 15, prohibits dispensing specified opioids unless prescription bottle or container has warning sticker; requires pharmacies to offer for sale prescription lock boxes; authorizes DOH to develop and distribute pamphlet concerning controlled substances. • 2019 FL S.B. 488 (NS), introduced March 5, prohibiting a pharmacist or practitioner from dispensing specified opioids unless the prescription bottle or container has a warning sticker meeting certain requirements; requiring pharmacies to offer for sale prescription lock boxes, etc.

Indiana

2019 IN S.B. 133 (NS), enrolled April 29, provides that if a pharmacist dispenses a prescription drug that contains or is derived from opium, the prescription label must bear a statement that the drug is an opioid.

Montana

2019 MT H.B. 419 (NS), introduced February 7, to require prescribers to provide certain information about opioids.

New Hampshire

2019 NH H.B. 359 (NS), introduced January 2, requires any drug which contains an opiate dispensed by a health care provider or pharmacy to have a red cap and a warning label regarding the risks of the drug.

III. EFFORTS TO CURB OPIOID CRISIS

Emergency Nurses Association Supports Recently Passed Federal Bills Intended to Combat Opioid Crisis The Emergency Nurses Association (ENA) recently commended Congress and President Trump for passing bipartisan legislation intended to combat the opioid crisis. The SUPPORT for Patients and Communities Act incorporates several bills, including two supported by ENA, which are designed to provide immediate assistance to help stop the deadly impact of opioid drugs, which claimed the lives of approximately 49,000 Americans in 2017. According to ENA President Jeff Solheim, MSN, RN, CEN, TCRN, CFRN, FAEN, FAAN, “The opioid epidemic has strained an already overburdened emergency care system in the United States. This, coupled with the challenges of watching how addiction negatively impacts our patients and their loved ones, makes the opioid crisis very personal for emergency nurses. We applaud any legislation, such as ALTO, that will help control this very real problem.” The SUPPORT Act includes the ALTO ED Act and key provisions of the POWER Act, which are two ENA-backed bills for which the association strongly advocated because of their intended impact on how emergency departments treat patients struggling with opioid- use. The ALTO ED Act was sponsored by Representative Bill Pascrell, D-N.J., in the House and Senator Cory Booker, D-N.J., in the Senate. It requires the Department of Health and Human Services to run a demonstration program in which grants would be awarded to hospitals and emergency departments to develop, study, and improve alternative pain management protocols with the goal of reducing unnecessary opioid use in emergency departments. The POWER Act was introduced by Representative David McKinley, R-W.Va., in the House and Senator Shelley Moore Capito, R- W.Va., in the Senate. The POWER Act authorizes federal funds to help health care facilities (including emergency departments) and key state agencies and local organizations develop protocols for discharging patients after a non-fatal overdose. These protocols are intended to improve coordination of community-based treatment for those patients. 2018 ENA President-elect Patricia Kunz Howard, PhD, RN, CEN, CPEN, TCRN, NE-BC, FAEN, FAAN commented on these legislative efforts. She stated that, “Alternatives to opioids is vitally important to reduce the tragedies associated with opioid addiction. The Emergency Nurses Association supports alternative measures to manage pain without the use of opioids.” The ENA is a professional nursing association “dedicated to defining the future of emergency nursing through advocacy, education, research, innovation, and leadership.” It boasts a membership of over 43,000 members worldwide. [FN6] Judge Blocks New York from Enforcing Opioid Surcharge on Companies

-12- (Reuters) - A Manhattan federal judge on Wednesday blocked New York state from enforcing a recently enacted law that aimed to collect $600 million from drug manufacturers and distributors to defray the costs of combating the opioid addiction epidemic. [FN7] U.S. District Judge Katherine Polk Failla ruled that while the concerns driving New York's decision to adopt the law were valid, the means by which the state would extract payments from the companies violated the U.S. Constitution. The ruling came in a trio of lawsuits by drug wholesale distributor group Healthcare Distribution Alliance (HDA); the Association for Accessible Medicines, a generic drug manufacturers group; and Mallinckrodt Plc unit SpecGx. Failla said the law's prohibition on companies passing on to consumers the costs of making the payments to the state of New York violated the Constitution's “dormant” Commerce Clause, which bars states from regulating interstate commerce. She said the law improperly regulated the companies' relationships with out-of-state consumers by barring drugmakers from passing on the costs to them and threatening significant penalties for doing so. “New York nowhere concedes that it will never charge the penalty for out-of-state sales, only that it has displayed no current intention to do so,” Failla wrote. Representatives for the groups behind the lawsuits welcomed the ruling. HDA in a statement called the surcharge the “wrong way to address the opioid epidemic.” The New York State Department of Health said it was considering its options. Democratic Governor Andrew Cuomo signed the Opioid Stewardship Act into law in April. Its passage marked a novel instance of a state seeking to tax opioid manufacturers and distributors to combat the drug epidemic. Other states have considered similar proposals. According to the U.S. Centers for Disease Control and Prevention, opioids were involved in over 49,000 overdose deaths nationwide in 2017. The law created a fund to finance addiction treatment programs bankrolled entirely by manufacturers and distributors of prescription painkillers in New York. The companies would collectively pay $100 million annually into the fund from 2019 to 2024. The exact amount a company owed would be based on its share of annual opioid sales. The first payments were due on Jan. 1 and were calculated based on 2017 sales. Mallinckrodt's SpecGX, a generic drugmaker, said in court papers it owed $1.2 million. Drug distributor AmerisourceBergen Corp estimated in November it would owe $22 million for its share from 2017 through September 2018. Largest-ever U.S. Border Seizure of Fentanyl Made in Arizona - Officials (Reuters) - U.S. border agents have seized 254 pounds (115 kg) of fentanyl that was stashed in a truck crossing into Arizona from Mexico, marking the largest single bust of the powerful opioid ever made at an American border checkpoint, officials said on Thursday. [FN8]

The 26-year-old Mexican driver of a cucumber-toting tractor trailer was arrested after agents on Saturday at the border station in Nogales discovered the fentanyl in a secret compartment, U.S. Customs and Border Protection officials said. Fentanyl, a synthetic opioid 100 times stronger than morphine that can kill with a 2-milligram dose, has been blamed for fueling an opioid crisis in the United States. It gained notoriety after an overdose of the painkiller was deemed to have killed pop singer Prince in 2016. The United States had a record 72,000 deaths from drug overdoses in 2017, with opioids responsible for most of those fatalities. President Donald Trump has declared opioid addiction a public health emergency. The latest seizure in Nogales is the largest-ever confiscation of fentanyl by the U.S. Customs and Border Protection agency, officials said in a statement. The fentanyl was worth an estimated $3.5 million, based on a valuation criteria of the U.S. Drug Enforcement Administration, Hugo Nunez, a spokesman for U.S. Customs and Border Protection, said in an email. The drugs were found after the truck was pulled over for a secondary inspection and drug-sniffing canines picked up an odor, Michael Humphries, the Nogales Area Port director, told reporters. The driver, Juan Antonio Torres-Barraza, was charged in federal court in Tucson with two counts of drug possession with the intent to distribute. An attorney for Torres-Barraza could not immediately be reached for comment. Another 395 pounds (180 kg) of methamphetamine, worth about $1.1 million, also was confiscated from the truck, officials said.

-13- Fentanyl is trafficked into the United States largely from China and Mexico but it is not possible to determine which country is a bigger supplier, the DEA said in a report in October. The U.S. Department of Justice, in a report last year to the U.S. Congress, has said the drug is primarily shipped to the United States from China through cargo containers or international mail. But Chinese fentanyl is sometimes sent to criminal groups in Mexico or Canada and smuggled across the border, the report said. Last month, Mexican officials busted a fentanyl lab in Mexico City. Cutbacks by Some Doctors Halved New Opioid Prescriptions Over 5 Years (Reuters Health) - The rate of first-time opioid prescriptions declined 54 percent between 2012 and 2017 in the U.S., largely because many doctors stopped prescribing the painkillers, according to a study of more than 86 million people covered by private insurance. [FN9]

The number of prescriptions for three days' worth of an opioid - the recommended amount for an initial prescription - fell 57 percent during those five-and-a-half years and there was a 68 percent decline in the number of prescriptions offering seven days of opioid therapy. The decline came because the number of doctors willing to prescribe an opioid drug to a patient for the first time dropped 29 percent during that period, researchers report in the New England Journal of Medicine. Nonetheless, a core group of physicians continued to write high-risk prescriptions - with higher doses or covering more than seven days - for people who had never used opioids before. “This study offers some much-needed good news about opioids,” lead author Wenjia Zhu of Harvard Medical School in Boston told Reuters Health in a telephone interview. The substantial decline “says that a large number of providers have responded to the opioid crisis by changing their behavior.” “We are making progress. That's something that can give hope to many people,” senior study author Nicole Maestas, an economist and associate professor of healthcare policy at Harvard said. “Providers are getting the message. We can quibble about who's getting how much of the message and who's getting too much of the message. But the top-level point here is that some progress is being made here.” Analyzing U.S. insurance claims data for people over age 15, the researchers identified nearly 64 million without a previous opioid prescription and tracked the proportion of these from month to month who received a first-time opioid prescription. In July 2012, 1.63 percent of these patients got a new prescription. By December 2017, the rate had dropped to 0.75 percent. Overall, nearly 11 million people received their first opioid prescription during that time span. The bad news seems to be that some doctors haven't throttled back on the opioid prescribing patterns while others appear to have been spooked into not prescribing the painkillers at all when they might be useful, albeit in lower doses or for shorter durations. The overall decline “is probably a good thing. At the same time, it's not clear the optimal place is no opioid therapy,” Maestas told Reuters Health. “What we were hoping to see is a large number of providers moving to safer prescribing with low doses and short duration.” It's hard to overstate the seriousness of the opioid epidemic. By 2016, opioid overdoses were claiming 115 lives each day, and people taking prescription opioids to relieve pain were a key part of the problem. Most heroin users start with prescription opioids, and using an opioid for only six days increases the odds of becoming addicted. In March 2016, the Centers for Disease Control and Prevention issued guidelines encouraging doctors to generally limit patients to a three-day supply. It also advised caution in prescribing more than 50 morphine-milligram equivalents per day. The CDC advisory did have some effect. While 4.3 percent of the insured population was getting opioids from July 2012 to March 2016, the rate had declined by 16 percent to 3.6 percent in December 2017. They “didn't seem to produce a big decline. The declines really preceded the CDC guidelines by a lot,” Maestas said. “They may have crystalized the direction everyone was trying to head, amplifying the message that opioid prescription can be dangerous.” One drawback to the study was the team couldn't tell if an opioid prescription was appropriate for the patient's degree of pain. “It is difficult to ascertain the severity of pain from claims data alone, and prescriptions that deviate from the CDC guidelines are not necessarily medically inappropriate, although, as the CDC notes, they are associated with a higher risk of adverse outcomes,” they said. Diagnosis, Treatment of Opioid Use Disorder in Pregnancy Tied to State Laws “The striking finding was the lower prevalence of recorded OUD and lower medication-assisted treatment rates in states that have criminal or civil statutes prosecuting women with an OUD diagnosis,” Dr. Fadia Shaya of the University of Maryland School of Pharmacy in Baltimore told Reuters Health by email. [FN10]

-14- Women may not disclose opioid use “due to fear of stigma or fear of losing custody of her newborn, or fear of losing their job or insurance,” she said. “It might also be due to a lower availability of treatment options, which limit access to treatment.” Dr. Shaya and colleagues studied data from 2007 to 2015 on more than 110,000 US pregnant women (mean age, 30) with a code indicating a delivery and commercial insurance enrollment nine months before and 12 months after delivery. Women were categorized into four regions of residence: South, Midwest, West and Northeast. They were further stratified by whether or not they lived in one of the 18 states that impose civil or criminal penalty on women with OUD during pregnancy: Arkansas, Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Minnesota, Nevada, Oklahoma, Rhode Island, South Carolina, South Dakota, Texas, Virginia, Wisconsin, Alabama, and Tennessee. As reported online March 8 in JAMA Network Open, 277 women (0.25%) had a diagnosis of OUD and 312 (0.28%) received medication for the disorder (buprenorphine, methadone or naltrexone). Among those diagnosed with OUD, close to half (45.9%) received treatment. Statistically significant differences in OUD diagnosis and treatment were found among regions. In the Midwest, 0.05% had an OUD diagnosis and 0.05% received treatment. In the Northeast, 0.09% had a diagnosis and 0.08% received treatment. In the South, 0.06% were diagnosed with OUD and 0.10% were treated. In the West, 0.06% had a diagnosis and 0.05% were treated. The prevalence of OUD diagnoses was significantly lower in states where the condition was criminalized. In those states, 0.07% of women had an OUD diagnosis, compared with 0.18% in states with no criminal statutes. However, there was no significant difference in prevalence of treatment for the disorder: criminalization, 0.12%; no criminalization, 0.17%. “In summary, in a cohort of 110,285 commercially insured pregnant women, 25 in every 10,000 women had a recorded OUD diagnosis and 28 in every 10,000 received treatment,” the authors state. “Variations by region and by presence of criminal or civil statutes were observed in the diagnosis of OUD. Statistically significant regional variations were observed in the receipt of treatment. No statistically significant variations were observed in the receipt of treatment by presence of criminal or civil statutes.” “These results call for a drastic change in our approach to OUD, especially during pregnancy,” Dr. Shaya said. “The unintended consequences of civil or criminal statutes have to be fully considered as well, so that they may promote and not stifle the patient- physician relationship. Physicians acting in their patients' best interest should be able to diagnose and treat OUD without putting patients at risk.” “Professional and social organizations can take the lead in highlighting the danger of criminal and civil statutes in that they can fuel instead of stopping the opioid epidemic,” she concluded. Dr. Diane Abatemarco, director of the Maternal Addiction Treatment, Education and Research Program (MATER) at Thomas Jefferson University Hospitals in Philadelphia, told Reuters Health, “This article reflects what we know and highlights the statistical findings to support our hypothesis that criminality of substance use disorder prevents women from seeking care and receiving treatment during pregnancy.” “States that have criminal consequences may affect the rates of care throughout the U.S.,” she said by email. “Women come into treatment feeling like criminals as a result of the U.S. policy that drug use is a criminal behavior rather than a medical disorder.” “Additionally, women with substance use disorder must have long-term treatment in programs such as Jefferson's MATER,” she said. The success of such programs “are based on treating the women with respect and providing long-term comprehensive care and treatment to engage women throughout their recovery and inadvertent relapses that may occur because of stress related to poverty, the stigma of drug use disorder and the long-term biologic effects of substance use.” “The American Medical Association, American Public Health Association, and American College of Obstetricians and Gynecologists, as well as other powerful associations should take the lead and mandate congress to enact federal laws that remove the criminality of those who seek treatment, especially pregnant women who bravely enter care to protect their fetus and newborns,” Dr. Abatemarco concluded. China Expands Curbs on Fentanyl, Blames U.S. for Its Abuse (Reuters) - China will expand the range of fentanyl-related substances it defines as controlled narcotics, a Chinese security official said on Monday, blaming U.S. culture for abuse of the drug. [FN11] U.S. President Donald Trump has criticized China for allowing fentanyl, a synthetic opioid, to be shipped from China to the United States, which faces an epidemic of opioid-related deaths. Fentanyl has been tied to already tense bilateral relations, with U.S. Trade Representative Robert Lighthizer saying he hopes to include China's commitments to curb the drug in any agreement to end the two countries' bitter trade war. China's addition of fentanyl-related substances to the supplementary list of controlled narcotic drugs will take effect on May 1, the Ministry of Public Security, the National Health Commission and the National Medical Products Administration said in a joint statement. Fentanyl itself and its “analogues” had previously been listed and remain controlled, the statement said.

-15- “Resolved. All resolved,” Liu Yuejin, a senior public security ministry official and vice commissioner of the China National Narcotics Control Commission, told reporters following a briefing, when asked if U.S. concerns had been fixed. But Liu said the amount of fentanyl from China going to the United States was “extremely limited” and that U.S. criticisms of China being the main source of the drug “lack evidence.” “We believe that the United States itself is the main factor in the abuse of fentanyl there,” Liu said, adding that American culture was partly to blame. He said the United States had a long tradition of abusing prescription medicines and that enforcement and education about the dangers were not good enough. “Some people link drug consumption with freedom, individuality, and liberation,” Liu said. “If the United States truly wants to resolve its fentanyl abuse problem, it needs to strengthen its domestic work.” Chinese officials in the past year have vowed to step up cooperation with Washington on illegal drug production and sales, referring to it as a bright spot in relations. The White House said after a December meeting between Trump and Chinese President Xi Jinping in Argentina to deescalate trade frictions that Xi had agreed to designate fentanyl as a controlled substance. Trump has called on China to apply the death penalty for “distributors and pushers” of the synthetic opioid. The volume of drugs coming into the United States through the mail has grown in step with legitimate online shopping, U.S. customs agents say, as Americans have taken to ordering drugs from overseas via the dark web. A U.S. congressional probe into the use of fentanyl in the United States found in 2018 that the substance could easily be bought online from Chinese “labs” and mailed to the United States due to gaps in oversight in the U.S. Postal Service. Such imports of prescription medicines and controlled substances are illegal, and China has become the main source of fentanyl in the United States, the U.S. Department of Justice says. New Part D Policies Address Opioid Epidemic Early last year, CMS published a roadmap outlining the agency's efforts to address the national opioid epidemic. The roadmap detailed a three-pronged approach, including prevention of new cases of opioid use disorder (OUD), expanding access to treatment for patients who have already developed OUD, and using data from across the country to better target our prevention and treatment activities. While illicit opioid use is part of the epidemic, prescription opioids provided by physicians can also contribute to the crisis when not used carefully. As Medicare pays for a significant amount of prescription opioids, CMS strives to ensure appropriate stewardship of these medications that can provide a medical benefit but also carry a risk for program beneficiaries. As part of the agency's prevention efforts, CMS has introduced new Medicare Part D opioid safety policies to reduce prescription opioid misuse while preserving medically necessary access to these medications. The new opioid policies include improved safety alerts at the pharmacy for Part D beneficiaries who are filling their initial opioid prescription or who are receiving high doses of prescription opioids. Medicare drug plans will perform additional safety checks by sending pharmacies an alert to review certain opioid prescriptions before they are filled. Safety alerts may cover situations like: • Possible unsafe amounts of opioids. The pharmacist or Medicare drug plan may need to perform a closer safety review of the prescription with the prescribing doctor if a Part D beneficiary receives opioid prescription(s) that exceed a certain amount. • First prescription fills for opioids. Part D beneficiaries may be limited to a 7-day supply or less for acute pain if they haven't recently taken opioids (such as within the past 60 days). The limit is based on medical best practices that show that the risk of developing an opioid use disorder increases after 7 days of use. This policy is not intended for current users of prescription opioids. • Use of opioids and benzodiazepines at the same time. These medications can be dangerous when taken in combination. If the prescription cannot be filled as written, including the full amount on the prescription, the pharmacist will give the beneficiary a notice explaining how they or their doctor can contact the plan to ask for a “coverage determination” (a decision about whether or not the plan will cover the drug). The beneficiary or their doctor may also ask the Part D plan for an exception to its rules before the beneficiary goes to the pharmacy, so they know in advance whether the prescription is covered. It is important to note that these new policies are not “one size fits all,” and are deliberately tailored to address distinct populations of Medicare Part D prescription opioid users. These interventions do not apply to residents of long-term care facilities, beneficiaries in hospice, palliative, or end-of-life care, and beneficiaries being treated for active cancer-related pain. The new policies also permit Part D plans to put drug management programs in place to help beneficiaries use opioids and other frequently abused medications safely. If a beneficiary gets opioids from multiple doctors or pharmacies, the beneficiary may need to receive their medications from specific doctors or pharmacies to ensure appropriate care coordination. The plan will send the beneficiary a letter if it will limit their access to these medications under its drug management program. If so, the beneficiary and their doctor will have the right to appeal.

-16- The new Medicare Part D opioid policies encourage collaboration and care coordination among Medicare drug plans, pharmacies, prescribers, and patients, in order to improve opioid management, prevent opioid misuse, and promote safer prescribing practices. CMS continues to be committed to addressing the opioid crisis and helping our beneficiaries use prescription opioid pain medications more safely. U.S. Indicts Indivior Over Suboxone Opioid Treatment Marketing (Reuters) - The U.S. Justice Department announced on Tuesday the indictment of Indivior Plc and a subsidiary on charges they engaged in an illegal scheme to boost prescriptions of the film version of its opioid addiction treatment Suboxone. [FN12] An indictment filed in federal court in Abingdon, Virginia, alleged Indivior made billions of dollars by deceiving doctors and healthcare benefit programs into believing the film version of Suboxone was safer and less susceptible to abuse than similar drugs. The department brought the case amid the U.S. opioid addiction epidemic, which has killed tens of thousands of people annually. The indictment charged Indivior and its subsidiary Indivior Inc with conspiracy, health care fraud, mail fraud and wire fraud. If Indivior is convicted, the government will seek to have it forfeit at least $3 billion, the indictment said. Slough, England-based Indivior said in a statement it was “extremely disappointed” by the department's decision to charge it. Indivior called the indictment “wholly unsupported by either the facts or the law.” Indivior had before the indictment been in settlement talks with the department. It had set aside $438 million to cover legal matters, most of which related to the probe. “The department has apparently decided it would rather pursue self-serving headlines on a matter of national significance than achieve an appropriate resolution,” Indivior said. Suboxone film is a U.S. Food and Drug Administration-approved opioid used by people recovering from opioid dependency. The indictment said Indivior's scheme led to thousands of opioid-addicted patients using the drug. The indictment said the scheme began before Indivior spun out of Reckitt Benckiser in 2014. Reckitt, which was not charged and was referred to as “Company A,” did not respond to requests for comment. The indictment said Indivior Inc, then called Reckitt Benckiser Pharmaceuticals Inc, developed the film version of Suboxone as a period of marketing exclusivity granted by the FDA for the tablet form of the drug was coming to an end, opening it up to generic competition. The indictment said after the FDA approved the film version in 2010, Indivior promoted it as safer and less able to be diverted for improper purposes than its tablet form despite a lack of scientific evidence supporting those claims. The department said Indivior also sought to boost profits using a program called “Here to Help” that connected patients addicted to opioids to doctors Indivior knew were prescribing painkillers at high rates and in “suspect” circumstances. The case is U.S. v. Indivior Inc, et al, U.S. District Court, Western District of Virginia, No. 19-cr-00016. Dozens of Doctors in Appalachia Charged in Opioid Fraud Bust (Reuters) - Dozens of medical professionals in Appalachia, a region hard-hit by the U.S. opioid crisis, have been charged with writing hundreds of thousands of illegal prescriptions and committing health care fraud, federal prosecutors said on Wednesday. [FN13] Sixty people, including 31 doctors, were accused of illegally prescribing opioid drugs in exchange for cash and sexual favors in the rural, mountainous region stretching from Pennsylvania and West Virginia to Alabama and Louisiana. “The opioid epidemic is the deadliest drug crisis in American history, and Appalachia has suffered the consequences more than perhaps any other region,” Attorney General William P. Barr said in a statement. Some 130 Americans die every day from an opioid overdose, according to the Centers for Disease Control. The charges were the result of an investigation by the Appalachian Regional Prescription Opioid Strike Force, a joint law enforcement agency created in December to crack down on prescription fraud schemes that have contributed to the deadly drug epidemic. The charges were filed against individuals in seven states: West Virginia, Tennessee, Ohio, Alabama, Kentucky, Louisiana, and Pennsylvania. One doctor in Tennessee who called himself the “Rock Doc” was accused of bargaining for sexual favors by prescribing opioids and benzodiazepines, federal authorities said in the statement. Another doctor in Alabama allegedly recruited prostitutes to become patients at his clinic and allowed them to abuse drugs in his home. Several doctors were accused of writing pre-signed, blank prescriptions for controlled substances without medically examining the patients that received them. A few were accused of running “pill mills,” including one in Ohio that allegedly distributed over 1.75 million pills between October 2015 and October 2017.

-17- The period in which many doctors were accused of illegally and excessively dispensing drugs coincided with a spike in overdoses in the United States. Opioid overdoses increased 30 percent between July 2016 and September 2017 in 45 states, according to the CDC. U.S. Brings First Criminal Case Against Major Drug Distributor Over Opioids (Reuters) - The U.S. government on Tuesday filed its first criminal charges against a major drug distributor and company executives over their alleged roles in fueling the nation's opioid epidemic by putting profits ahead of patients' safety. [FN14] Rochester Drug Co-operative Inc (RDC), one of the 10 largest U.S. drug distributors, agreed to pay a $20 million fine and enter a five- year deferred prosecution agreement to resolve charges it turned a blind eye to thousands of suspicious orders for opioids. “We made mistakes,” RDC spokesman Jeff Eller said in a statement. “We accept responsibility for those mistakes.” Laurence Doud, RDC's chief executive for more than 25 years, was charged in an indictment filed in Manhattan federal court with conspiring to distribute illegal narcotics and conspiring to defraud the United States. His lawyer said Doud, 75, of New Smyrna, Florida, plans to plead not guilty. Doud is expected to be released on bail. Another former executive, compliance chief William Pietruszewski, 53, of Oak Ridge, New Jersey, pleaded guilty to three criminal counts and agreed to cooperate with prosecutors. The case marks a new U.S. effort to curtail the growing number of addictions to opioids, including oxycodone and other prescription painkillers. Opioids, including prescription painkillers and heroin, played a role in a record 47,600 U.S. overdose deaths in 2017, according to the U.S. Centers for Disease Control and Prevention. “This country is in the midst of a prescription drug abuse epidemic,” U.S. Attorney Geoffrey Berman said at a Manhattan news conference. “This epidemic has been driven by greed. As alleged, Doud cared more about profits than the laws intended to protect human life.” “RED FLAGS” ALLEGEDLY IGNORED Hundreds of lawsuits by state and local governments accuse drugmakers such as Purdue Pharma of deceptively marketing opioids, and distributors such as AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp of ignoring that they were being diverted for improper uses. These defendants, as well as RDC, were among those named last month in a lawsuit by New York Attorney General Letitia James alleging widespread fraud. In Tuesday's settlement, RDC admitted to violating narcotics laws from January 2012 to March 2017 by distributing oxycodone, fentanyl and other controlled substances to pharmacy customers despite internal “red flags” that they would be used improperly. Berman said the red flags included dramatic increases in order sizes, pharmacy customers paying in cash, and prescriptions filled by doctors under investigation by law enforcement or on an RDC “watch list.” Prosecutors said RDC identified about 8,300 potentially suspicious “orders of interest,” including for oxycodone, from 2012 to 2016, but reported just four to the federal Drug Enforcement Administration. Berman said this lax oversight enabled RDC to boost sales of oxycodone tablets more than 800 percent and fentanyl dosages roughly 2,000 percent over that period, while Doud's pay more than doubled, to more than $1.5 million. “RDC was, in Doud's own words, the knight in shining armor for pharmacies that had been cut off by other distributors,” Berman said. The deferred prosecution agreement allows RDC to keep operating, subject to three years of independent compliance monitoring, and avoid prosecution if it complies with the terms. Doud led RDC from September 1991 through April 2017, according to court papers. His lawyer, Derrelle Janey, said Doud “is not the culprit here. We intend to fully defend against these charges.” Trump Says He Is Holding Big Pharma Accountable in Opioid Fight (Reuters) - U.S. President Donald Trump touted progress in the fight against opioid abuse on Wednesday and promised to hold drugmakers accountable for their part in the crisis, a day after his administration brought its first related criminal charges against a major drug distributor and company executives. [FN15] America's opioid epidemic, especially damaging in rural areas where Trump is popular, has been a focus for the Republican president. On Tuesday, the government charged drug distributor Rochester Drug Co-operative Inc and company executives for their role in fueling the epidemic. The company agreed to pay $20 million and enter a deferred prosecution agreement to resolve charges it turned a blind eye to thousands of suspicious orders for opioid pain killers. “We are holding big Pharma accountable,” Trump said at the Rx Drug Abuse and Heroin Summit in Atlanta.

-18- Deaths from opioid overdose in the United States jumped 17 percent in 2017 from a year earlier to more than 49,000 according to the Centers for Disease Control and Prevention. Deaths from potent synthetic opioids like fentanyl surged 45 percent in that time, according to the CDC. Hundreds of lawsuits by state and local governments accuse drugmakers such as Purdue Pharma of deceptively marketing opioids, and distributors such as AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp of ignoring that they were being diverted for improper uses. Trump said he convinced Chinese President Xi Jinping in a December meeting in Argentina to designate fentanyl as a controlled substance. China last month listed all fentanyl-related substances as controlled narcotics after criticism from Trump, though its government blamed U.S. culture for abuse of the drug and said the amount of fentanyl going from China into the United States was “extremely limited.” “Almost all fentanyl comes from China,” Trump said on Wednesday. “They are going to make it a major crime.” Little has come of Trump's earlier calls for executing drug dealers. But the administration has taken some action to address the crisis on other fronts. Trump declared the opioid crisis a public health emergency in October 2017. Last week, U.S. health officials said they will spend $350 million in four states to study ways to best deal with the opioid crisis on the local level, with a goal of reducing opioid-related overdose deaths by 40 percent over three years in selected communities in those states. The Democratic National Committee said in a statement before Trump's remarks that his proposed Medicaid cuts and efforts to overturn the Affordable Care Act, popularly known as Obamacare, could make the opioid problem worse. Trump has used the crisis to support his call for building a wall on the border with Mexico, saying it would help keep out heroin and other illegal drugs and curb the crisis. CMS Commits $50 Million to Assist States with Substance Use Disorder Treatment and Recovery On June 25, CMS announced a Notice of Funding Opportunity that provides State Medicaid agencies with information to apply for planning grants that will aid in the treatment and recovery of substance use disorders (SUDs), including opioid use disorder (OUD). Fighting the opioid epidemic is one of CMS's top priorities, and the planning grants are an important step in that effort. The planning grants are intended to increase the capacity of Medicaid providers to deliver SUD treatment or recovery services through an ongoing assessment of the SUD treatment needs of the State; recruitment, training, and technical assistance for Medicaid providers that offer SUD treatment or recovery services; and improved reimbursement for and expansion of the number or treatment capacity of Medicaid providers. To apply, State Medicaid agencies are required to submit an 18-month proposal by August 9th to increase the capacity of Medicaid providers throughout the State and quickly deliver SUD treatment or recovery services within local communities. CMS will review all of the applications and select at least 10 proposals, with awards totaling $50,000,000. “CMS is pulling every lever to combat the opioid epidemic, and increasing access to treatments for Americans suffering from substance use disorder is essential to addressing this issue,” said CMS Principal Deputy Administrator for Policy and Operations Kimberly Brandt. “State-level innovation has been and will continue to be key in addressing the opioid crisis and this funding opportunity provides states with a significant opportunity to expand access to critical treatments for their citizens.” CMS has a comprehensive three-pronged approach to combat the opioid crisis, which is laid out in the CMS Roadmap to Address the Opioid Epidemic and focuses on prevention, treatment, and data. The implementation of section 1003 of the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act (P.L. 115-27) and the release of this Notice of Funding Opportunity represent a key aspect of our efforts to increase access to evidence-based treatment for OUD. The application for planning grants is the first step CMS is taking in implementing section 1003 of the SUPPORT for Patients and Communities Act. Enacted on October 24, 2018, the SUPPORT for Patients and Communities Act is a comprehensive bill that tackles multiple aspects of the epidemic including treatment, prevention, recovery and enforcement. Section 1003 authorizes CMS to conduct a 54-month demonstration project to increase substance use provider capacity, beginning with this 18-month planning phase. Upon completion of the planning phase, up to 5 states will be selected to carry out a subsequent 36-month demonstration. Substance Use Disorders and Combat National Opioid Epidemic CMS announced on June 28 that that Minnesota and Nebraska have become the 23rd and 24th states who have received approval under the Trump Administration for innovative demonstration projects that increase access to treatment for opioid use disorder (OUD) and other substance use disorders (SUD). Under the section 1115 demonstrations, Minnesota and Nebraska are approved to receive Medicaid matching funds for treatment in facilities that meet the definition of an institution for mental diseases (IMD). Since announcing a more flexible approach to these demonstrations through a November 2017 Medicaid policy announcement, the Trump Administration has accelerated efforts to help states combat the national opioid epidemic, decreasing overuse and saving lives.

-19- CMS expects the Nebraska demonstration will enhance existing substance abuse related services and offer those services to beneficiaries in more appropriate treatment locations, including residential facilities. As a result the anticipated outcome is that more patients will receive a more complete array of required treatments than before the demonstration. States will monitor and report the impact of changes to address SUD and OUD over the course of the demonstrations. States who have already implemented their programs are beginning to report positive results. For example, Virginia experienced a 4 percent decrease in acute inpatient SUD admissions during the first 10 months of implementation, along with a 6 percent decrease in opioid use disorder inpatient admissions. During the first year, the total number of prescriptions for opioid pain medications among Medicaid beneficiaries decreased by 27 percent while the number of prescriptions for non-opioid pain relievers remained unchanged. In one year of early implementation of the Maryland demonstration, over 8,000 Medicaid beneficiaries received residential treatment services. Expanding access to treatment for people with opioid use disorder (OUD) is one key strategy identified in CMS's Roadmap to Address the Opioid Epidemic, which details agency efforts in combatting the opioid crisis. More than two million people suffer from OUD, yet only 20 percent of people with OUD receive treatment. These demonstrations will allow Minnesota and Nebraska to improve access to high quality, clinically appropriate treatment for OUD and other SUDs, in ways that take into account the particular challenges the opioid epidemic has caused in their respective states. Both demonstrations are approved for a five-year period beginning on July 1, 2019, and ending on June 30, 2024. Trump Accuses China's Xi of Failing to Halt Fentanyl Exports to U.S. (Reuters) - U.S. President Donald Trump on Thursday accused his Chinese counterpart of failing to meet promises to stem a deluge of the synthetic opioid fentanyl into the United States, after months of praising Chinese President Xi Jinping for his pledges. [FN16] “My friend President Xi said that he would stop the sale of fentanyl to the United States - this never happened and many Americans continue to die,” Trump said in a tweet. “We're losing thousands of people to fentanyl,” he later told reporters. The Chinese embassy did not immediately respond to a request for comment. Fentanyl is an opioid painkiller 50 times more potent than heroin, and has a central role in the devastating U.S. opioid crisis. In the United States, fentanyl and all of its analogues are controlled substances subject to strict regulation. More than 28,000 synthetic opioid-related overdose deaths, mostly from fentanyl related substances, were recorded in 2017, according to the U.S. Centers for Disease Control and Prevention. Trump's complaints came as he also announced a new round of tariffs on Chinese imports starting Sept. 1, after negotiators failed to make progress in U.S.-China trade talks. Trump has made battling the opioid epidemic a priority since taking office and he pressed Xi to halt the flow of fentanyl and related substances from China, which U.S. officials say is the main source of the powerful synthetic opioids. Xi promised Trump at a summit in Argentina last December that he would act. China later announced that it expanded on May 1 the list of narcotics subject to state control to include the more than 1,400 known fentanyl analogues, which have slightly different chemical makeups but are all addictive and potentially deadly, as well as any new ones developed in the future. The policy change was supposed to shut down the illicit production and online sales of the drugs, which are mainly delivered to the United States by mail. The White House Office of National Drug Control Policy said after Trump's comments on Thursday that the administration had not “directly seen any large-scale seizures or law enforcement action by the Chinese on fentanyl.” “Too many Americans do continue to die from these deadly drugs, most of which come from China,” it said in a statement. “We'll continue to press China to follow through on the promise they made to keep fentanyl out of our communities.” U.S. officials and experts had been skeptical that Beijing would take meaningful action, with some saying any crackdown would depend on progress in resolving the U.S.-China trade war. Derek Scissors, a resident scholar at the American Enterprise Institute think tank, said that skepticism was well placed. “What the Chinese have effectively said is we should forget what they said just a few months ago. If they don't like the trade situation, the fentanyl and related products will continue to flow,” he said in an email on Thursday. “The Chinese government accuses us, with some reason, of not keeping strictly to our word,” he said. “When we back away from our word, the way they have here, does anyone die?” U.S. Government Gives States Nearly $2 billion to Combat Opioid Crisis (Reuters) - The U.S. Department of Health and Human Services (HHS) said on Wednesday it will offer states more than $1.8 billion in new funding to fight the opioid epidemic. [FN17]

-20- The funds will be used for expanding access to treatments for opioid overdosing and to gather case data from across states, the HHS said. The Centers for Disease Control and Prevention will spend $900 million over three years - about $301 million in the first year - to help states and territories track overdose data as closely as possible, the HHS said in a statement. Meanwhile, HHS unit Substance Abuse and Mental Health Services Administration is awarding about $932 million to support prevention, treatment and recovery services. Prescription opioid pain treatments and drugs like heroin and the more potent fentanyl were responsible for 47,600 U.S. deaths in 2017, according to the government, with only a small decline last year. Drugmakers such as Johnson & Johnson and Endo International Plc are facing several lawsuits brought by states, counties and municipalities that seek to hold the companies responsible for opioid abuse nationwide. A U.S. judge on Tuesday rejected efforts by major drugmakers, pharmacies and distributors to dismiss claims that they caused the nation's opioid crisis, clearing the way for a landmark trial even as the judge pushes for a nationwide settlement. U.S. Charges 58 in Texas with Healthcare Fraud, Illegal Opioid Distribution (Reuters) - Fifty-eight people have been charged with engaging in healthcare fraud schemes that centered on the illegal distribution of more than 6 million opioid pills across Texas, U.S. prosecutors said on Wednesday. [FN18] Some 16 medical professionals, including six doctors and seven pharmacists, were charged in the schemes, which featured one pharmacy in Houston that illegally dispensed more than 760,000 pills from March 2018 to September 2019, Assistant Attorney General Brian Benczkowski told a news briefing in Dallas. “The data in our possession shines an inescapable light on those dirty doctors, clinic owners, pharmacists and others who may have long believed that they could perpetrate their fraud in the dark, behind closed doors,” he said. The opioid crisis has been marked by nearly 400,000 overdose deaths between 1999 and 2017, according to the latest U.S. data. About 218,000 of those deaths have been from prescription opioids, while the rest were from illicit opioids including heroin. Some 45,000 people a year overdose on opioids in the United States, U.S. Attorney John Bash of the Western District of Texas said on Wednesday. “The scale of this crisis is enormous,” he said. The schemes in Texas entailed Medicare fraud that resulted in more than $66 million in losses, Benczkowski said. They also included $158 million in fraudulent claims for compound creams and $23 million in tax evasion, he said. Federal authorities have frozen $60 million in assets of the people accused, Benczkowski added. “I hope today's action brings home a simple message for those that engage in these despicable frauds,” he said. “You're not invisible.” The scheme in Houston involved counterfeit prescription pads associated with doctors whose identities were stolen. Runners would bring the prescriptions to the pharmacy to be filled on a cash-only basis while they charged more than five times the market rate for drugs such as oxycodone and hydrocodone, authorities said. Separately, two doctors were charged with scheming to defraud TriCare, a healthcare program for U.S. military veterans, Benczkowski said. The charges in Texas come after Purdue Pharma LP Purdue Pharma LP, which launched OxyContin in 1996, filed for bankruptcy protection on Sunday night, succumbing to pressure from more than 2,600 lawsuits alleging the company helped fuel the U.S. opioid epidemic. Other criminal cases have been filed recently by state and federal authorities. Dozens of medical professionals in Appalachia were accused in April of writing hundreds of thousands of illegal prescriptions and committing health care fraud. FDA Issues Warning Letters to Websites Selling Illegal Opioid (Reuters) - The U.S. Food and Drug Administration and the Drug Enforcement Administration (DEA) jointly issued warning letters to four online networks for illegally marketing unapproved and misbranded versions of opioid medicines, the agencies said. [FN19] The networks which were issued the warning letters on Monday are Divyata, Euphoria Healthcare Pvt Ltd, JCM Dropship and Meds4U, which operate a total of 10 websites. The move comes at a time when health regulators in the country are combating the rising use of opioids, which were responsible for 47,600 overdose deaths in the United States in 2017. Misbranded drugs are those that fail to bear adequate directions for their intended use, the FDA said. The networks also violated the Controlled Substances Act by not registering the online pharmacies with the DEA despite advertising for the sale of opioids, the agencies said.

-21- In case the online networks fail to take corrective action within 15 working days, the websites' domain name registrars may be informed, the agencies said. In June last year, the FDA issued warning letters to nine other online networks operating a total of 53 websites, to stop illegally marketing unapproved versions of opioid medications. Federal Prosecutors Open Criminal Probe of Opioid Makers, Distributors (Reuters) - Federal prosecutors have opened a criminal investigation into whether pharmaceutical companies intentionally allowed opioid painkillers to flood communities, the Wall Street Journal reported on Tuesday, citing people familiar with the matter. [FN20] At least six companies have received grand-jury subpoenas from the U.S. attorney's office in the Eastern District of New York - Teva Pharmaceutical Industries Ltd, Mallinckrodt Plc, Johnson & Johnson and Amneal Pharmaceuticals Inc and distributors AmerisourceBergen Corp and McKesson Corp, the Journal reported. Shares of Amneal, Teva and McKesson fell between 3% and 7%, while AmerisourceBergen and Mallinckrodt were down marginally. The subpoenas were in connection with a Brooklyn federal probe, the Journal reported. A spokesman for the Brooklyn U.S. attorney's office declined to comment. The probe is in early stages and prosecutors are expected to send subpoenas to other companies in the coming months, the report said, citing one of the sources. The companies did not immediately respond to Reuters' requests for comment. Teva, J&J, Amneal and Mallinckrodt disclosed in recent regulatory filings that they received subpoenas from the U.S. attorney's office in Brooklyn, which the companies generally described as regarding their anti-diversion policies and procedures and distribution of opioid medications. The companies said it was part of a broader investigation into manufacturers' and distributors' monitoring programs and reporting under the Controlled Substances Act. Teva, Mallinckrodt and J&J also said they had received subpoenas from the New York State Department of Financial Services as part of an industry-wide inquiry into the effect of opioid prescriptions on New York health insurance premiums. Opioid manufacturers, distributors and pharmacy chains have been defending themselves against thousands of lawsuits by state attorneys general, local governments and class actions accusing them of fueling an addiction crisis. Opioids have contributed to more than 400,000 deaths since 1997, according to government statistics.

IV. LITIGATION AGAINST MANUFACTURERS, DISTRIBUTORS AND PROVIDERS

West Virginia Cases Picked for Second Federal Opioid Trial (Reuters) - A federal judge overseeing more than a thousand lawsuits seeking to hold drug companies accountable for their roles in the opioid epidemic has picked two lawsuits by local governments in West Virginia to be the second set of cases to go to trial before him. [FN21]

U.S. District Judge Dan Polster in Cleveland, Ohio in an order on Monday selected a pair of cases by the city of Huntington and Cabell County to serve as bellwether, or test, cases in the federal litigation. The decision meant that the second trial will focus on West Virginia, the state that according to the U.S. Center for Disease Control and Prevention had the highest rate of prescription opioid-related overdose deaths in 2017. Polster has since late 2017 been overseeing about 1,521 lawsuits largely by local governments alleging that opioid manufacturers and distributors contributed to a national drug addiction epidemic, which have been consolidated in multidistrict litigation. A trio of lawsuits by municipalities and counties in Ohio are already set to go to trial in September. But Polster in his order said those cases cover “a large, but incomplete, fraction of the issues and parties relevant” to the overall litigation. Polster noted that not every retail pharmacy sued in the litigation was named as a defendant in the Ohio cases, and he said the “common law causes of action in Ohio are different than in other States.” Polster did not set a trial date for the lawsuits by the Cabell County Commission and the city of Huntington. He instead directed the parties to propose a schedule by Jan. 15. In a statement, co-lead counsel for plaintiffs' executive committee - Paul Hanly of Simmons Hanly Conroy, Joseph Rice of Motley Rice and Paul Farrell of Greene Ketchum Farrell Bailey & Tweel - welcomed Polster's decision. “This second set of bellwether cases recognizes the need to press forward with the litigation in another jurisdiction hard-hit by the marketing and distribution of opioids,” they said. According to the CDC, opioids were involved in around 47,600 overdose deaths in 2017.

-22- The lawsuits allege that Purdue Pharma LP, Johnson & Johnson, Endo International PLC and other drugmakers carried out marketing campaigns that downplayed the risks of addiction associated with opioids and the benefits of using them to treat chronic pain. The lawsuits also claim that distributors like McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp failed to prevent the diversion of painkillers for illegal purposes and report suspicious drug orders. The plaintiffs claim the companies' actions contributed to the opioid epidemic, which led to lowered tax revenue and increased spending on emergency services for municipal governments. The companies deny wrongdoing. The defendants in the West Virginia cases also include drugmakers Allergan PLC, Endo International PLC and Teva Pharmaceutical Industries and pharmacy operators Walmart Inc, Rite Aid Corp, WalgreensBoots Alliance Inc and CVS Health Corp. Polster, who has pushed for a settlement, only oversees federal opioid-related lawsuits. Some similar cases in state courts are set for trial before the Ohio ones. Those include a lawsuit by West Virginia against McKesson set for trial in April and a lawsuit by Oklahoma against drugmakers including Purdue set for trial in May. The case is In re National Prescription Opiate Litigation, U.S. District Court, Northern District of Ohio, No. 17-md-02804. Former Insys CEO Pleads Guilty to Opioid Kickback Scheme (Reuters) - The former chief executive of Insys Therapeutics Inc pleaded guilty on Wednesday to participating in a nationwide scheme to bribe doctors to prescribe an addictive opioid medication and has agreed to become a government witness. [FN22] Michael Babich, who resigned as the Arizona-based drugmaker's CEO in 2015, pleaded guilty in federal court in Boston to conspiracy and mail fraud charges after entering into a cooperation deal with prosecutors. His plea comes less than three weeks before five former Insys executives and managers including John Kapoor, its onetime billionaire founder and former chairman, face trial after being charged with participating in the scheme. Babich, 42, faces up to 25 years in prison. But the Arizona resident could receive a more lenient sentence by testifying at Kapoor's Jan. 28 trial. Assistant U.S. Attorney Fred Wyshak in court said Babich committed his crimes at Kapoor's direction. Kapoor and his co-defendants have pleaded not guilty to racketeering conspiracy. Beth Wilkinson, Kapoor's lawyer, had no comment after attending Wednesday's hearing. Prosecutors allege that from 2012 to 2015, Kapoor, Babich and others conspired to pay doctors bribes in exchange for prescribing Subsys, an under-the-tongue fentanyl spray for managing severe pain in cancer patients. Fentanyl is an opioid 100 times stronger than morphine. Prosecutors said Insys paid doctors kickbacks in the form of fees to participate in speaker programs ostensibly meant to educate medical professionals about Subsys that were actually sham events. Prior to working at Insys, Babich had worked at Kapoor's venture capital firm. Insys in August said it had agreed to pay at least $150 million as part of a settlement with the U.S. Justice Department. The company has said it has taken steps to ensure it operates legally going forward. Prosecutors called the case a major example of their efforts to combat the nation's opioid epidemic. According to the U.S. Centers for Disease Control and Prevention, opioids were involved in a record 47,600 overdose deaths in 2017. Babich's plea comes after Alec Burlakoff, Insys' former vice president of sales, pleaded guilty in November and agreed to testify as a government witness. Babich is married to a former Insys sales representative, Natalie Babich, who in 2017 pleaded guilty to conspiring to pay kickbacks. She testified last month at the trial of Christopher Clough, a former physician assistant in New Hampshire accused of accepting kickbacks from Insys. A federal jury in Concord, New Hampshire, convicted Clough on Dec. 18. Connecticut Judge Tosses Cities' Lawsuits Against Opioid Companies (Reuters) - A Connecticut judge has dismissed lawsuits by 37 cities in the state seeking to hold drug manufacturers and distributors responsible for the opioid epidemic, saying their claims for damages are too speculative to be allowed to go forward. [FN23] Tuesday's ruling by Superior Court Judge Thomas Moukawsher in Hartford, Connecticut marked a rare victory for drugmakers including Purdue Pharma LP and Endo International PLC as they fight hundreds of similar lawsuits nationally. In lawsuits filed beginning in 2017, cities including New Haven and Bridgeport accused opioid manufacturers of deceptively promoting their painkillers as safe for treating chronic pain while trivializing the risk of addiction. They also accused drug distributors McKesson Corp, AmerisourceBergen and Cardinal Health Inc of failing to halt suspicious orders of opioids that were diverted to the black market and used for illicit purposes.

-23- The cities said that as a result, they were forced to pay for medical and social services for drug addicts and have incurred other costs including higher emergency-responder expenses. But Moukawsher, ruling on a motion to dismiss, said the chain-of-causation linking the companies' actions and the cities' harms were too attenuated and would require the court to engage in “rank speculation” in order to award damages. He cited the Connecticut Supreme Court's 2001 ruling in Ganim v. Smith & Wesson Corp, which said Bridgeport could not sue gun manufacturers over gun violence because the damages it alleged were too indirect with respect to the companies' conduct. Moukawsher said the ruling recognized “that our actions have indirect effects on others like the rock that ripples the pond or the butterfly that flips its wings. But it is impossible to trace fairly every act to its utmost consequence.” In the opioid cases, Moukawsher said cities “have many links to make,” with opioids being distributed to pharmacies who then fulfill doctors' prescriptions to patients, only some of whom become addicted and receive emergency services from the cities. “Assuming wrongs were found, it would be hard to look the defendants in the eye while pronouncing them each responsible for a specific percentage of blame for city expenses,” Moukawsher said. Connecticut-based OxyContin maker Purdue in a statement commended Moukawsher for “concluding that opioid manufacturers cannot be legally responsible to cities for the indirect harms they claim they experienced as a result of the opioid crisis.” Paul Hanly, a lawyer for the cities at Simmons Hanly Conroy, said he was “surprised and disappointed” by the ruling and will appeal. Drugmakers including Purdue, Endo, Johnson & Johnson and Teva Pharmaceutical Industries Ltd have been fighting a wave of opioid- related lawsuits by state and local governments. They deny wrongdoing. According to the U.S. Centers for Disease Control and Prevention, opioids were involved in 47,600 overdose deaths in 2017. Judges in other cases have rejected the companies' contention that the plaintiffs had not alleged a sufficient link to their damages. U.S. District Judge Dan Polster in Cleveland, who oversees 1,521 opioid lawsuits consolidated in multidistrict litigation, in December said an Ohio county and several cities sufficiently alleged a direct link. The case is City of New Haven v. Purdue Pharma LP, et al, Hartford Superior Court, Connecticut, No. HHDCV176086134S. Family Behind Purdue Pharma Pushed Opioid Marketing, Massachusetts Says (Reuters) - Members of the wealthy Sackler family behind Purdue Pharma LP pushed it to boost sales of OxyContin and other opioids even as questions emerged about the extent its painkillers were being abused, Massachusetts' attorney general alleged on Tuesday. [FN24]

Attorney General Maura Healey filed an amended lawsuit against Purdue and current and former officers and directors of the drugmaker that drew on years of internal records to reveal new details about the family's involvement in the company. The lawsuit, originally filed in June in Suffolk County Superior Court, was the first by a state to try to hold members of the Sackler family, who own privately-held Purdue, personally responsible for contributing to the U.S. opioid epidemic. Purdue in a statement on Tuesday said Healey's lawsuit “distorts critical facts” and “is littered with biased and inaccurate characterizations of these documents and individual defendants.” Healey's lawsuit, one of hundreds state and local governments have filed against the company, accuses it of deceiving doctors and patients by misrepresenting the risks of addiction and death associated with prolonged use of prescription opioids. The allegations were made public despite Purdue's efforts to keep much of the 279-page complaint redacted. The complaint cites internal records to argue Sackler family members, including Purdue's former President Richard Sackler, personally directed the marketing of opioids in order to make billions of dollars. They did so even after Purdue and three executives in 2007 pleaded guilty to federal charges related to the misbranding of OxyContin and agreed to pay a total of $634.5 million in penalties, the lawsuit said. Their push to boost sales, the lawsuit said, came even after staff showed family members on Purdue's board a map correlating suspected illegal prescribers and reports of opioid poisonings in 2011. Richard Sackler, as Purdue's president, in a 2001 email argued the company needed to shift responsibility away from Purdue and “hammer on the abusers in every way possible,” the complaint said. After leaving that position in 2003 but still a member of Purdue's board, he frequently demanded detailed opioid sales data, the lawsuit said. In 2011, Richard Sackler personally accompanied sales representatives to observe how they marketed Purdue products to doctors and afterwards argued that a legally required warning about opioid risks was unnecessary, the lawsuit said. In an email cited in the complaint, he said, it “implies a danger of untoward reactions and hazards that simply aren't there” and he pushed for a “less threatening” way to describe Purdue's opioids.

-24- Insys Founder, Former Execs Face Opioid Kickback Scheme Trial (Reuters) - The one-time billionaire founder of Insys Therapeutics Inc and four other former executives and managers of the opioid drugmaker will face trial over charges they conspired to pay doctors bribes to prescribe patients an addictive fentanyl spray to boost sales. [FN25] Lawyers are set to deliver opening statements Monday in federal court in Boston in the case of former Insys chairman John Kapoor, the highest-level executive of a painkiller manufacturer to be tried amid a deadly U.S. opioid abuse epidemic. Prosecutors say Kapoor directed a kickback scheme that helped fuel the epidemic in order to boost the company's sales of Subsys, an under-the-tongue fentanyl spray approved only for use in managing severe pain in cancer patients. Fentanyl is an opioid 100 times stronger than morphine. Net revenues for Subsys grew from $8.6 million in 2012 to $329 million in 2015, according to Insys. Kapoor, 75, who also served as the Chandler, Arizona-based company's chief executive from 2015 to 2017, denies wrongdoing. Beth Wilkinson, Kapoor's lawyer, has argued that prosecutors are trying to make “unattractive” but normal drug marketing practices appear illegal by wrongly trying to link Kapoor to the drug epidemic. Kapoor's 2017 arrest came the same day U.S. President Donald Trump declared the opioid crisis a public health emergency. In 2017, a record 47,600 people died of opioid-related overdoses, the U.S. Centers for Disease Control and Prevention says. Two top former executives - Michael Babich, Insys' CEO from 2011 to 2015, and Alec Burlakoff, its ex-vice president of sales - have become government witnesses after pleading guilty to carrying out the scheme at Kapoor's direction. Kapoor's co-defendants include former Insys executives and managers Michael Gurry, Richard Simon, Sunrise Lee and Joseph Rowan. They have pleaded not guilty to racketeering conspiracy. Prosecutors allege that from 2012 to 2015, Kapoor and his-co-defendants conspired to pay doctors bribes in exchange for prescribing Subsys and to defraud insurers into paying for it. Prosecutors said Insys paid doctors as much as $200,000 to participate in speaker programs ostensibly meant to educate medical professionals about Subsys but that were actually poorly attended sham events. The scheme led doctors to write medically unnecessary prescriptions for Subsys to patients, many of whom did not have cancer, prosecutors said. Insys in August said it would pay at least $150 million to resolve a Justice Department probe related to its marketing of Subsys, and that it has taken steps to ensure it operates legally going forward. Purdue Loses Bid to Keep Massachusetts Opioid Complaint Under Wraps (Reuters) - A Massachusetts judge on Monday rejected Purdue Pharma LP's efforts to keep much of a complaint filed by the state's attorney general that seeks to hold it and members of the wealthy Sackler family who own the OxyContin maker responsible for contributing to the opioid epidemic under wraps. [FN26] Suffolk County Superior Court Judge Janet Sanders in Boston ruled that the company's belief that parts of Massachusetts Attorney General Maura Healey's complaint misleadingly quoted from confidential records could not justify keeping it redacted. She said some of material that has been kept from the public concerns discussions of the company's tactics to promote sales of OxyContin at higher doses and to “circumvent safeguards put in place to stop illegal prescriptions.” Sanders said the fact that the case centers on the opioid epidemic made it of “tremendous public concern” and that the information in the complaint had never been made public before justified lifting the redactions. “Any interest in keeping this information secret is hardly compelling and certainly not enough to overcome the presumption of public access,” she wrote. Healey in a statement said thanks to the ruling, “the public and families so deeply impacted by this crisis can see the allegations of the misconduct that has harmed so many.” Stamford, Connecticut-based Purdue in a comment said they intended to seek a stay, pending appellate review. Jeffrey Pyle, a lawyer for the media companies at Prince Lobel Tye, in a statement said the ruling “vindicates the public's right to know about the Commonwealth's allegations in this important case.” The ruling came after media companies including Reuters and The Wall Street Journal moved to lift redactions in the 279-page amended complaint Healey filed in December, which cites hundreds of pages of internal Purdue records. Purdue, which has denied wrongdoing, fought against making entire complaint public, saying it was mischaracterizing records Healey gained access to that were originally produced in related federal multidistrict litigation against opioid manufacturers.

-25- Sanders, though, said “the case law is clear that this cannot support impoundment,” and she declined to hold off on ruling until after a special master in the federal litigation can decide whether the documents should remain confidential. Sanders declined to stay her ruling pending any appeal, but she cleared the way for Purdue to ask an appellate court to do so. If no stay is entered, an unredacted complaint will be made public on Friday. The lawsuit is one of hundreds that state and local governments have filed against Purdue accusing it of deceiving doctors and patients by misrepresenting the risks of addiction and death associated with prolonged use of prescription opioids. Healey sued in June, becoming the first state attorney general to try to hold members of the Sackler family personally responsible for contributing to the opioid epidemic. In December, Healey moved to revise her complaint to add around 200 additional pages of allegations focused largely on the role that individuals including members of the Sackler family played in promoting opioids. Purdue has fought hard to keep much of the complaint redacted, but following an earlier hearing voluntarily agreed to lift some redactions, resulting in new claims becoming public on Jan. 15. The case is Commonwealth of Massachusetts v. Purdue Pharma, Suffolk County Superior Court, Massachusetts, No. 1884-cv-01808. Indivior Braces for Market Share Slide after U.S. Court Defeat (Reuters) - Drugmaker Indivior Plc warned on Tuesday that it faces rapid losses in market share “in the immediate future” to generic versions of its blockbuster drug Suboxone, after losing the latest leg of its battle to delay the launch of competitors in a U.S. court. [FN27] Shares in the company sank 25 percent at opening in London. Indivior has been engaged in a long-running fight against the launch of cheaper equivalents of its opioid addiction treatment by competitors including India's Dr.Reddy's Laboratories and Teva Pharmaceuticals. The company said it would file an emergency motion to prevent a mandate under the decision by the U.S. Court of Appeals for the Federal Circuit taking effect on Feb. 11. Failing that, it said it expected both Dr. Reddy's and another competitor, Alvogen Pine Brook LLC, to relaunch their treatments, resulting in potentially huge losses in market share for Subloxone. “We acknowledge that the Company faces major disruption in the immediate future from a potential material and rapid loss of market share,” Chief Executive Officer Shaun Thaxter said. He said the company had implemented the initial stages of a contingency plan outlined in December, leaving it with $920 million in cash and equivalents at the end of the 2018 financial year. OxyContin Maker Purdue Pharma Exploring Bankruptcy - Sources (Reuters) - OxyContin maker Purdue Pharma LP is exploring filing for bankruptcy to address potentially significant liabilities from roughly 2,000 lawsuits alleging the drugmaker contributed to the deadly opioid crisis sweeping the United States, people familiar with the matter said on Monday. [FN28] The potential move shows how Purdue and its wealthy owners, the Sackler family, are under pressure to respond to mounting litigation accusing the company of misleading doctors and patients about risks associated with prolonged use of its prescription opioids. Purdue denies the allegations, arguing that the U.S. Food and Drug Administration-approved labels for its opioids carried warnings about the risk of abuse and misuse associated with the pain treatments. Filing for Chapter 11 protection would halt the lawsuits and allow Purdue to negotiate legal claims with plaintiffs under the supervision of a U.S. bankruptcy judge, the sources said. Shares of Endo International Plc and Insys Therapeutics Inc, two companies that like Purdue have been named in lawsuits related to the U.S. opioid epidemic, closed down 17 percent and more than 2 percent, respectively, on Monday. More than 1,600 lawsuits accusing Purdue and other opioid manufacturers of using deceptive practices to push addictive drugs that led to fatal overdoses are consolidated in an Ohio federal court. Purdue has held discussions to resolve the litigation with plaintiffs' lawyers, who have often compared the cases to widespread lawsuits against the tobacco industry that resulted in a $246 billion settlement in 1998. “We will oppose any attempt to avoid our claims, and will continue to vigorously and aggressively pursue our claims against Purdue and the Sackler family,” Connecticut Attorney General William Tong said. Connecticut has a case against Purdue and the Sacklers. BANKRUPTCY FILING NOT CERTAIN A Purdue bankruptcy filing is not certain, the sources said. The Stamford, Connecticut-based company has not made any final decisions and could instead continue fighting the lawsuits, they said.

-26- “As a privately-held company, it has been Purdue Pharma's longstanding policy not to comment on our financial or legal strategy,” Purdue said in a statement. “We are, however, committed to ensuring that our business remains strong and sustainable. We have ample liquidity and remain committed to meeting our obligations to the patients who benefit from our medicines, our suppliers and other business partners.” Purdue faces a May trial in a case brought by Oklahoma's attorney general that, like others, accuses the company of contributing to a wave of fatal overdoses by flooding the market with highly addictive opioids while falsely claiming the drugs were safe. Last year, U.S. President Donald Trump also said he would like to sue drug companies over the nation's opioid crisis. Opioids, including prescription painkillers, heroin and fentanyl, were involved in 47,600 overdose deaths in 2017, a sixfold increase from 1999, according to the latest data from the U.S. Centers for Disease Control and Prevention. Purdue hired law firm Davis Polk & Wardwell LLP for restructuring advice, Reuters reported in August, fueling concerns among litigants, including Oklahoma Attorney General Mike Hunter, that the company might seek bankruptcy protection before the trial. Companies facing widespread lawsuits sometimes seek bankruptcy protection to address liabilities in one court even when their financial condition is not dire. California utility PG&E Corp filed for bankruptcy earlier this year after deadly wildfires raised the prospect of large legal bills even though its stock remained worth billions of dollars. DECEPTIVE MARKETING Massachusetts Attorney General Maura Healey in June became the first attorney general to sue not just Purdue but Sackler family members. Records in her case, which Purdue has asked a judge to dismiss, accused Sackler family members of directing deceptive marketing of opioids for years while enriching themselves to the tune of $4.2 billion. Some other states have since also sued the Sacklers. The Sacklers are currently discussing creating a nonprofit backed by family financial contributions to combat addiction and drug abuse, a person familiar with their deliberations said. The drugmaker downplayed the possibility of a bankruptcy filing in a Feb. 22 court filing in the Oklahoma case. “Purdue is still here - ready, willing and eager to prove in this Court that the State's claims are baseless,” the company said in court papers. Sales of OxyContin and other opioids have fallen amid public concern about their addictive nature, and as restrictions on opioid prescribing have been enacted. OxyContin generated $1.74 billion in sales in 2017, down from $2.6 billion five years earlier, according to the most recent data compiled by Symphony Health Solutions. Purdue Chief Executive Officer Craig Landau has cut hundreds of jobs, stopped marketing opioids to physicians and moved the company toward developing medications for sleep disorders and cancer since taking the helm in 2017. In July, Purdue appointed a new board chairman, Steve Miller, a restructuring veteran who previously held leadership positions at troubled companies including auto-parts giant Delphi and the once-teetering insurer American International Group Inc. Mortimer D.A. Sackler no longer sits on Purdue's board, according to a filing the company made with the Connecticut secretary of state late Monday. The Oklahoma case and other lawsuits seek damages from Purdue and other pharmaceutical companies accused of fueling the opioid crisis. In addition to lawsuits consolidated in an Ohio federal court, more than 300 cases are pending in state courts, and dozens of state attorneys general have sued manufacturers, including Purdue. Settlement discussions have not yet resulted in a deal. Purdue and three executives in 2007 pleaded guilty to federal charges related to the misbranding of OxyContin and agreed to pay a total of $634.5 million in penalties, according to court records. OxyContin Maker Purdue Must Face Vermont Opioid Lawsuit (Reuters) - OxyContin maker Purdue Pharma LP has lost its bid to dismiss a lawsuit by Vermont's attorney general accusing the company of fueling an opioid addiction epidemic by deceptively marketing its painkillers as an appropriate treatment for chronic pain. [FN29]

Tuesday's decision by Chittenden Superior Court Judge Helen Toor marked the latest setback for Purdue, which is considering filing for bankruptcy in the wake of around 2,000 lawsuits seeking to hold it responsible for the national drug crisis. Vermont Attorney General T.J. Donovan accused Purdue of aggressively and misleadingly marketing opioids in order to minimize the risks of addiction and to convince the medical community of the benefits of long-term use of the drugs. The lawsuit, which was filed in September, alleges violations of the Vermont Consumer Protection Act and public nuisance law. It seeks financial penalties and to recover the costs the state is incurring in addressing the crisis. Stamford, Connecticut-based Purdue, which is owned by members of the wealthy Sackler family, launched OxyContin in 1996. In a motion to dismiss, Purdue argued that Donovan's claims were preempted as they essentially assert violations of the federal law regulating drug advertising.

-27- But Toor said Purdue had failed to show that Congress by regulating drug advertising through the Food, Drug and Cosmetic Act had sought to restrict states from enforcing consumer fraud statutes. “The fact that the federal government imposes restrictions on drug advertising does not necessarily mean that the states may not regulate deceptive acts by drug manufacturers and distributors,” Toor wrote. Donovan, in a statement on Thursday announcing the ruling, called the decision “an important step toward holding Purdue responsible for its contribution to the creation of the opioid crisis.” Purdue declined to comment. It has denied similar allegations and has previously said Vermont was seeking to “substitute its judgment for the judgment of the regulatory, scientific and medical experts at FDA.” Opioids, including prescription painkillers, heroin and fentanyl, were involved in a record 47,600 overdose deaths in 2017, according to the U.S. Centers for Disease Control and Prevention. The epidemic has led to lawsuits by state and local governments accusing Purdue and other drugmakers of contributing to the crisis through deceptive marketing that promoted the benefits of opioids while downplaying their addictive risks. More than 1,600 lawsuits have been consolidated before a U.S. District Judge Dan Polster in Cleveland, Ohio, who has been pushing for a settlement ahead of the first trial before him in the multidistrict litigation in October. Other cases are pending in state courts, including Vermont's, which is one of 36 lawsuits Purdue is facing by state attorneys general. Oklahoma Attorney General Mike Hunter is set to take Purdue, Johnson & Johnson and Teva Pharmaceutical Industries Ltd to trial on May 28. Reuters, citing people familiar with the matter, reported on March 4 that Purdue was exploring filing for Chapter 11 bankruptcy protection. Purdue has since confirmed it was “looking at all options.” The case is State of Vermont v. Purdue Pharma LP et al, Chittenden County Superior Court, Vermont, No. 757-9-18. OxyContin Maker Purdue Agrees to Settle Oklahoma Opioid Case (Reuters) - Purdue Pharma LP has agreed to settle a lawsuit by the state of Oklahoma accusing the OxyContin painkiller maker of helping fuel an opioid abuse epidemic, a person familiar with the matter said. [FN30] It is the first settlement to result from a wave of recent lawsuits over the drugmaker's marketing of painkillers. The settlement with Oklahoma Attorney General Mike Hunter came just weeks before Purdue, owned by members of the wealthy Sackler family, was set to face the first trial to result from around 2,000 lawsuits nationally against opioid manufacturers. Hunter's 2017 lawsuit accuses Purdue, Johnson & Johnson & Teva Pharmaceutical Industries Ltd of engaging in deceptive marketing that downplayed the risks of addiction associated with opioid pain drugs while overstating their benefits. The companies deny wrongdoing. They had sought to delay the May 28 trial to Sept. 16, citing the need to review records the state belatedly turned over that could be critical to their defense. The state had been seeking over $20 billion in damages. But a trial judge earlier this month rejected the companies' efforts to delay the trial, and on Monday, Oklahoma's Supreme Court rejected their appeal of that decision. Stamford, Connecticut-based Purdue had been exploring filing for Chapter 11 bankruptcy protection to address potential liabilities stemming from the lawsuits, people familiar with the matter have told Reuters. Hunter is scheduled to hold a press conference on Tuesday to announce a “breaking development” in the lawsuit. A spokesman for Hunter declined to comment. A lawyer for Purdue did not respond to a request for comment. Opioids, including prescription painkillers, heroin and fentanyl, were involved in a record 47,600 overdose deaths in 2017 in the United States, according to the U.S. Centers for Disease Control and Prevention. The epidemic has prompted lawsuits by state and local governments accusing various drugmakers of contributing to the crisis. Those companies include Purdue, which introduced the painkiller OxyContin to the market in 1996. More than 1,600 lawsuits have been consolidated before a federal judge in Ohio, who has pushed for a settlement ahead of the trial before him in October. Other cases, including Oklahoma's, are pending in state courts. Purdue has held discussions to resolve the litigation with plaintiffs' lawyers, who have often compared the cases to widespread lawsuits against the tobacco industry that resulted in a $246 billion settlement in 1998. New York Accuses Opioid Maker Purdue of Illegal Fund Transfers to Sacklers (Reuters) - Purdue Pharma LP fraudulently transferred funds to members of the wealthy Sackler family who control the OxyContin maker despite knowing it faced major liabilities that had made it already insolvent, New York's attorney general alleged on Thursday. [FN31]

-28- New York Attorney General Letitia James made the claims in a revised lawsuit already pending against Purdue over its role in the opioid epidemic that added members of the Sackler family and other drug manufacturers and distributors as defendants. The lawsuit alleged Purdue and other manufacturers engaged in deceptive marketing that downplayed the dangers of the addictive painkillers and accused distributors of failing to detect the diversion of the drugs for illicit purposes. “As the Sackler family and the other defendants grew richer, New Yorkers' health grew poorer and our state was left to foot the bill,” James said in a statement. The revised lawsuit also added as defendants units of opioid manufacturers Johnson & Johnson, Endo International Plc, Teva Pharmaceutical Industries Ltd and distributors McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp. In a statement, the Sackler family called the lawsuit “a misguided attempt to place blame where it does not belong for a complex public health crisis.” Representatives for the other defendants did not respond to requests for comment. The case is among roughly 2,000 lawsuits filed by state and local governments seeking to hold Purdue and other pharmaceutical companies responsible for the U.S. opioid crisis. Opioids were involved in a record 47,600 overdose deaths in 2017 in the United States, according to the U.S. Centers for Disease Control and Prevention. The complaint came after Purdue and the Sacklers on Tuesday reached a $270 million settlement with Oklahoma resolving similar allegations. Purdue had been exploring filing for bankruptcy prior the accord's announcement. In her lawsuit, James accused Purdue of seeking to “intimidate” states pursuing lawsuits against it by threatening bankruptcy, which would hinder their cases and limit their ability to recover damages. Yet James said Purdue, which is fighting lawsuits by 34 other states and hundreds of localities, has continued in the face of its liabilities to pay millions of dollars to the Sacklers. The lawsuit argued Purdue was either insolvent or near insolvency when it transferred those funds, making the transfers illegal under New York law. The payments meant Purdue, which had average annual sales of $3 billion, no longer had assets that could satisfy the state's claims, the lawsuit said. Illinois Sues Purdue Over Opioids; Arkansas Lawsuit Moves Forward (Reuters) - Illinois on Monday became the latest state to accuse OxyContin maker Purdue Pharma LP of helping to fuel the opioid epidemic by deceptively marketing painkillers as safer than they are, just days after a judge cleared the way for a similar case by Arkansas to move forward. [FN32] Illinois Attorney General Kwame Raoul accused Stamford, Connecticut-based Purdue of carrying out an aggressive and misleading marketing effort aimed at boosting opioid prescriptions by promoting their benefits and downplaying their addictive risks. The lawsuit, filed in Cook County Circuit Court, is among 37 pending by states asserting similar claims against Purdue. Purdue and the wealthy Sackler family that owns the company last month reached a $270 million settlement with the state of Oklahoma over its lawsuit. The cases include a 2017 lawsuit that Arkansas Attorney General Leslie Rutledge filed against Purdue, Johnson & Johnson and Endo International Plc alleging they created a public nuisance and violated the state's Medicaid Fraud False Claims Act. Pulaski County Circuit Judge Morgan Welch on Friday rejected arguments by the companies that the state's claims were preempted because they sought to challenge the companies' promotion of opioids even though they were marketed for uses approved by the U.S. Food and Drug Administration. But Welch wrote that Rutledge's lawsuit was not a challenge to the FDA-approved labels for the companies' drugs but instead was alleging the companies fraudulently marketed in ways that were at odds with their labels. “Thus, the claim asserted by the Plaintiff with any regard to FDA labeling is one of fraud,” Welch wrote. “Fraud falls squarely within the realm of historic police powers of the state.” J&J in a statement said it will continue to defend itself against Arkansas' lawsuit. It said it appropriately and responsibly marketed and promoted its opioid products. Purdue and Endo did not respond to requests for comment on Monday. The companies have denied wrongdoing and argued that they marketed their painkillers appropriately. Opioids, including prescription painkillers, heroin and fentanyl, were involved in a record 47,600 overdose deaths in 2017, according to the U.S. Centers for Disease Control and Prevention. State and local governments have filed approximately 2000 lawsuits seeking to hold Purdue and other drugmakers accountable.

-29- More than 1,600 of those lawsuits have been consolidated before U.S. District Judge Dan Polster in Cleveland, Ohio, who has been pushing for a settlement ahead of the first trial before him in the multidistrict litigation in October. Other cases are pending in state courts, including the ones by Illinois and Arkansas. To date, state court judges in at least seven states have declined to dismiss all or part of similar lawsuits. The sole win for opioid manufacturers was in Connecticut, where a judge in January found a group of municipalities had failed to establish a sufficient link between the companies' marketing and the cities' damages. The cases are the People of the State of Illinois v. Purdue Pharma LP, Cook County Circuit Court, Illinois, No. 2019CH04406, and State of Arkansas v. Purdue Pharma LP, Pulaski County Circuit Court, Arkansas, No. 60CV-18-2018. Opioid Distributor Staffs Compliance Committee Required by $20 million Settlement (Reuters) - Rochester Drug Co-operative Inc has hired an ex-prosecutor and a former U.S. Drug Enforcement Administration official to head a compliance committee established as part of a $20 million deal resolving the first criminal case against an opioid distributor. [FN33]

Rochester, one of the 10 largest U.S. drug distributors, announced the hires on Tuesday, two weeks after it entered into a deferred prosecution agreement with federal prosecutors in Manhattan resolving charges it turned a blind eye to thousands of suspicious orders for opioids. The agreement required Rochester to not just pay a $20 million penalty and consent to supervision by an independent monitor but also to establish a committee to oversee its compliance with the five-year agreement and the Controlled Substances Act. Rochester said its board has retained Bonnie Jonas, cofounder of Pallas Global, a firm specializing in corporate monitorships and claims resolution. From 2013 to 2016, Jonas served as deputy chief of the criminal division of the U.S. Attorney's Office for the Southern District of New York. During her years as a prosecutor, she oversaw several major cases, including Toyota Motor Corp's $1.2 billion settlement in 2014 of criminal charges that it concealed safety problems in its vehicles. Jonas will chair the committee while Louis Milione, a senior managing director of security and compliance firm Guidepost Solutions, will serve as the committee's subject matter expert, Rochester said. He led the DEA's diversion control operations from 2015 to 2017. The committee will oversee the adequacy and effectiveness of Rochester's policies and programs and investigate any alleged misconduct, Rochester said. It will report to Rochester's board. The case against Rochester, announced on April 22, marked the first criminal prosecution ever of a distributor for illegally distributing controlled substances and came amid U.S. efforts to curtail the opioid epidemic. Opioids, including prescription painkillers and heroin, played a role in a record 47,600 U.S. overdose deaths in 2017, according to the U.S. Centers for Disease Control and Prevention. Hundreds of lawsuits by state and local governments accuse drugmakers of deceptively marketing opioids and distributors including Rochester of ignoring that they were being diverted for improper uses. As part of the deferred prosecution deal, RDC admitted to violating narcotics laws from January 2012 to March 2017 by distributing oxycodone, fentanyl and other controlled substances to pharmacy customers despite internal “red flags” that they would be used improperly. Prosecutors said the red flags included dramatic increases in order sizes, pharmacy customers paying in cash and prescriptions filled by doctors under investigation by law enforcement or on an RDC “watch list.” Two former RDC executives were also charged, including Laurence Doud, who had been its chief executive for more than 25 years. He was accused of conspiring to distribute illegal narcotics, and conspiring to defraud the United States. Doud, 75, has pleaded not guilty. Derrelle Janey, his attorney at Gottlieb & Janey, at the time the case was announced said Doud “is not the culprit here.” Former compliance chief William Pietruszewski separately pleaded guilty and agreed to cooperate with prosecutors. The case is before U.S. District Judge George Daniels. The case is U.S. v. Doud, U.S. District Court, Southern District of New York, No. 19-cr-00285. Five More U.S. States Sue OxyContin Maker Purdue Pharma Over Opioid Epidemic (Reuters) - Five U.S. states on Thursday filed lawsuits accusing Purdue Pharma LP of illegally marketing and selling opioids, escalating the wave of litigation over a nationwide abuse epidemic. [FN34] Iowa, Kansas, Maryland, West Virginia and Wisconsin joined 39 states to file lawsuits targeting Purdue Pharma and its leaders, including former president Richard Sackler and his family.

-30- Officials accused Purdue Pharma of repeatedly making false and deceptive claims that opioids, including OxyContin, were safe for a wide range of patients seeking to reduce pain. The lawsuits were announced six days after a North Dakota judge dismissed that state's lawsuit accusing Purdue Pharma of overstating the benefits and trivializing the addiction risks of prolonged opioid use. North Dakota is expected to appeal. Purdue Pharma called the new lawsuits “misleading attacks,” and said it will defend itself against them. “These complaints are part of a continuing effort to try these cases in the court of public opinion rather than the justice system,” the Stamford, Connecticut-based company said. Opioids, including prescription painkillers and heroin, played a role in a record 47,600 U.S. overdose deaths in 2017, the U.S. Centers for Disease Control and Prevention has said. State and local governments have filed hundreds of lawsuits accusing drugmakers such as Purdue Pharma of deceptive marketing, and distributors such as AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp of ignoring how opioids were being used illegally. Oklahoma reached a $270 million settlement with Purdue Pharma and the Sacklers on March 26. The prospect that Purdue Pharma might eventually seek bankruptcy protection is a reason that Sackler family members have been named as defendants in some lawsuits. On the conference call, Maryland Attorney General Brian Frosh said the family has “left a trail of addiction and death.” In the North Dakota case, Bismarck-based Judge James Hill rejected the state's argument that Purdue Pharma's conduct created a public nuisance. “Purdue cannot control how doctors prescribe its products and it certainly cannot control how individual patients use and respond to its products, regardless of any warning or instruction Purdue may give,” Hill wrote. The Sacklers have long been prolific cultural benefactors, but their alleged role in the opioid crisis has led some major museums to distance themselves. On Wednesday, New York's Metropolitan Museum of Art, whose Sackler Wing contains the popular Temple of Dendur, said it would stop accepting donations from the Sacklers. Insys to Pay $225 million, Plead Guilty in U.S. Over Opioid Kickbacks (Reuters) - Insys Therapeutics Inc agreed to pay $225 million and an operating unit will plead guilty to fraud to settle probes into their payment of kickbacks to induce doctors to prescribe highly addictive opioids, the U.S. Department of Justice said on Wednesday. [FN35] Prosecutors said Insys used kickbacks and other illegal marketing practices to boost sales of Subsys, an under-the-tongue spray meant to treat pain in adult cancer patients and which contains fentanyl, an opioid 100 times stronger than morphine. The settlement followed the May 2 conviction by a federal jury in Boston of five former Insys executives, including founder and former billionaire John Kapoor, of racketeering charges for contributing to the nation's opioid epidemic. Wednesday's settlement calls for the operating unit, Insys Pharma, to plead guilty to five mail fraud counts. The Chandler, Arizona-based company will pay a $2 million fine, forfeit $28 million, and pay $195 million to settle charges it defrauded the government under the False Claims Act. “For years, Insys engaged in prolonged, illegal conduct that prioritized its profits over the health of the thousands of patients who relied on it,” U.S. Attorney Andrew Lelling in Massachusetts said. “Today, the company is being held responsible.” Insys did not immediately respond to requests for comment. The company has been exploring whether to divest its Subsys business, and had on May 10 said the probes could prompt it to seek bankruptcy protection. Insys' share price has fallen 93% since late August. Prosecutors accused Insys of having from August 2012 to June 2015 used sham “speaker programs” as a means to pay bribes and kickbacks to doctors, who would then prescribe Subsys to more patients and in increased dosages, often with no medical need. The Kapoor case marked a rare effort by prosecutors to hold individual executives responsible for the opioid epidemic. Opioids, including prescription painkillers and heroin, were involved in a record 47,600 U.S. overdose deaths in 2017, the U.S. Centers for Disease Control and Prevention has said. Most U.S. states have sued Purdue Pharma LP, the maker of OxyContin, and several have sued members of its controlling Sackler family. In April, meanwhile, Rochester Drug Co-operative Inc in New York became the first large drug distributor to face federal felony charges for making the opioid epidemic worse. It agreed to pay a $20 million fine to settle.

-31- Several other former Insys officials have admitted guilt related to Subsys. One, former Chief Executive Michael Babich, testified for the prosecution at Kapoor's trial. Oklahoma Judge Approves Teva's $85 million Opioid Settlement (Reuters) - An Oklahoma judge on Monday approved a revised $85 million settlement with Teva Pharmaceutical Industries Ltd resolving claims by the state's attorney general that the drugmaker helped fuel the U.S. opioid epidemic. [FN36] The decision by Cleveland County District Judge Thad Balkman in Norman, Oklahoma came after the state's attorney general, governor and top lawmakers resolved a dispute over how the money should be deposited and spent. Oklahoma Attorney General Mike Hunter struck an initial settlement with Teva on May 26, just days before the Israel-based drugmaker was set to face trial alongside Johnson & Johnson, which is continuing to fight the case. The settlement resolved claims that Teva and other drugmakers helped cause the epidemic by marketing opioids as safe and effective for everyday pain while downplaying their addictive qualities. The case is one of around 2,000 by state and local governments seeking to hold drugmakers responsible for an epidemic the U.S. Centers for Disease Control and Prevention says led to a record 47,600 opioid-related overdose deaths in 2017. Teva's deal came just days before the Israel-based drugmaker was set to face trial in the case, and two days after Oklahoma Governor Kevin Stitt signed a bill into law that required funds recovered in lawsuits by the state to be deposited into the state's treasury. The law followed criticism by state legislators that money from an earlier, $270 million settlement in the case with Purdue Pharma LP in March was not deposited in the state's coffers for lawmakers to determine its use. Instead, nearly $200 million of that March settlement went toward creating an addiction treatment and research center at Oklahoma State University. Under Teva's initial settlement, the $85 million was to be deposited into a court-controlled account pending the outcome of J&J's trial. Hunter's office argued Teva's settlement should be combined with any money J&J must pay to help remedy, or abate, what the state says is a public nuisance that will cost $17.5 billion to remedy over 30 years. J&J denies the allegations. But Stitt and Republican leaders of the state's legislature argued any funds should be deposited directly with the state's treasury. Under the revised accord, money from Teva's settlement would be deposited in a fund with the state and only be used to address the opioid epidemic, subjected to future legislation, according to court papers. Teva did not admit wrongdoing. Local Government Lawyers to Rework Novel Framework for Opioid Settlement Talk (Reuters) - Lawyers for local governments suing drug manufacturers and distributors over the U.S. opioid epidemic on Tuesday said they will re-work a novel proposal to bring 24,500 communities into their settlement talks after several defendants and states opposed their initial plan. [FN37] The lawyers made that announcement at a hearing in Cleveland, Ohio even as U.S. District Judge Dan Polster suggested their proposal could provide a structure to resolve the massive opioid litigation. Since the defendants have said they only want to enter into global settlements that take care of all of their potential liabilities, Polster said a solution was needed to address not just pending cases but potential future ones. Polster said the “negotiation class” the plaintiffs' lawyers have asked him to certify to provide such a structure was a “novel idea,” but that even they acknowledged it was not a perfect solution. “But that doesn't make it wrong or illegal or incorrect,” Polster said. “We need a novel solution to a novel problem.” After Polster made those remarks, Paul Geller, a lawyer for the plaintiffs at Robbins Geller Rudman & Dowd, asked him to delay considering whether to preliminarily approve the class so the plaintiffs could address concerns raised by some defendants and states. Distributors McKesson Corp, Cardinal Health and AmerisourceBergen in a motion on Monday said the class was ineligible for certification and would be open to attack by cities dissatisfied with any settlements that are reached. Attorneys general from 25 states and the territory of Guam, who have their own separate cases against various defendants in state courts, in a letter on Monday said the class, if certified, would complicate their own efforts to negotiate settlements. “All of them we felt we could deal with and make some adjustments,” Geller said. The plaintiffs' lawyers on June 14 proposed allowing local governments who do not opt out of the negotiation class to be given the right to vote on accepting any deal with a company. A settlement would be binding on the local governments, if approved by 75% of those voting. Polster, after hearing from Geller, gave the plaintiffs until July 9 to file a revised proposal for class certification. He set a hearing for Aug. 6 and said he would most likely rule on the issue then.

-32- More than 1,850 lawsuits are pending before Polster seeking to hold drug manufacturers and distributors responsible for an epidemic the U.S. Center for Disease Control and Prevention says led to a record 47,600 opioid overdose deaths in 2017. He has long pushed for a global settlement that could “do something meaningful to abate this crisis.” The first trial before him is set for October. The lawsuits allege that drugmakers such as Purdue Pharma, Johnson & Johnson and Teva Pharmaceutical Industries Ltd overstated the benefits while downplaying addictive risks of opioids in marketing their pain treatments. They also accuse distributors like Cardinal, McKesson and AmerisourceBergen of failing to halt suspicious opioid orders. The companies deny wrongdoing and say they cannot be found to be the cause of the epidemic cause. Plaintiffs claim it could cost about $480 billion to address the epidemic, according to defense court filings in April. The case is In re National Prescription Opiate Litigation, U.S. District Court, Northern District of Ohio, No. 17-md-02804. Fate of Opioid Litigation Hinges on Government ‘Police Power’ (Reuters) - The fate of thousands of lawsuits seeking to hold drugmakers responsible for fueling the U.S. opioid epidemic hinges in part on a thorny legal question: Can a company can use a bankruptcy to stop lawsuits from cities and states? [FN38] U.S. Bankruptcy Judge Kevin Gross is expected in July to decide whether to halt more than 160 active lawsuits brought by state attorneys general, cities and counties against opioid manufacturer Insys Therapeutics Inc. When it filed for Chapter 11 protection in Delaware earlier this month, Insys requested the cases be paused. A bankruptcy filing would normally halt active litigation immediately, giving a company such as Insys time to reorganize and preserve money that would otherwise be spent fighting the cases. But a longstanding exception in U.S. bankruptcy law can keep the lawsuits alive if they are enforcing government officials' “police or regulatory power.” The exception holds that government actions seeking to enforce laws related to matters such as public health and safety are not automatically stopped by a company's bankruptcy filing as other lawsuits are. State and local officials are suing Insys and other drugmakers in an attempt to address harm from an opioid crisis that has killed nearly 400,000 people between 1999 and 2017. More than half these deaths resulted from prescription painkillers, according to the U.S. Centers for Disease Control and Prevention. “Criminal enterprises . . . should not be permitted to shield themselves from the consequences of their misconduct by running to bankruptcy court and obtaining the equivalent of a stay that allows them to evade justice,” said Minnesota Attorney General Keith Ellison and Maryland Attorney General Brian Frosh in a Tuesday legal filing opposing Insys's request to halt lawsuits. The opioid crisis “is a national public health emergency,” they said in the filing, which other state attorneys general supported, including those in New York, New Jersey and Arizona. “The interests of the public therefore are served by allowing these police powers actions of the states to continue unfettered by the injunctions that Insys seeks.” A spokesman for Insys, which faces trials in Maryland and Minnesota beginning in August, declined to comment beyond the company's court filings. Insys already had reached a $225 million settlement before filing for bankruptcy with the U.S. Justice Department, admitting to illegal conduct in resolving claims that it bribed doctors to write prescriptions, including medically unnecessary ones, for a fentanyl spray called Subsys designed to treat cancer pain. The Chandler, Arizona-based company still faces, overall, more than 1,000 lawsuits raising similar allegations of deception and fraud in marketing its opioids. The misconduct occurred under a prior management team that has since “entirely turned over” and Insys is now committed to lawful marketing practices, the company said in court papers. Insys contends in bankruptcy-court filings that Judge Gross should halt the lawsuits against it regardless of any exceptions, lest the company drain limited financial resources fighting cases on multiple fronts. Allowing the cases to continue would leave less money for creditors, including the very government officials seeking to hold it to account, Insys contends, adding that its request is not an attempt to escape liability. It had less than $40 million in the bank when filing for bankruptcy and predicts spending up to $9 million through December to continue fighting lawsuits, according to court papers. The judge's ruling is expected to influence whether another opioid manufacturer facing 2,000 lawsuits - OxyContin maker Purdue Pharma LP - decides to file for bankruptcy protection, according to a person familiar with the matter and legal experts. A Purdue spokesman declined to comment. A ruling allowing the Insys litigation to proceed could discourage Purdue from seeking bankruptcy protection, while pausing the cases might signal that Chapter 11 bankruptcy proceedings are a viable way to halt lawsuits and take advantage of breathing room to reach a broader settlement with plaintiffs, according to the person familiar with the matter and several legal experts.

-33- Insys lawyers are attempting to persuade government officials to agree to voluntarily halt their cases, according to a bankruptcy-court filing. Insys is nearing a deal that would effectively halt some of those legal claims against the drugmaker that are consolidated in an Ohio federal court, said Paul Hanly, a lead lawyer for plaintiffs in the opioid litigation. An Insys spokesman declined to comment on the potential agreement. Insys has some legal precedent backing its approach. In 2017, a bankruptcy judge sided with Takata Corp when temporarily halting lawsuits brought by Hawaii, New Mexico and the U.S. Virgin Islands against the Japanese supplier of automobile airbags that exploded, finding that allowing the litigation to continue threatened the company's reorganization. That would have harmed creditors, including those seeking to hold Takata accountable for widespread deaths and injuries, the judge ruled. The ruling allowed Takata to focus on completing a sale to a rival, creating a combined company called Joyson Safety Systems. A Joyson representative declined to comment. The Minnesota and Maryland attorneys general argued in their legal filing on Tuesday that Insys has not demonstrated the kind of exceptional circumstances present in the Takata case - an unprecedented automotive recall - that warranted halting government lawsuits. While the outcome in the Insys case is not critical for opioid manufacturers with stronger balance sheets that face lawsuits, such as Johnson & Johnson, it holds significance for the likes of OxyContin maker Purdue, according to several legal experts. In March, Reuters reported that Purdue was exploring filing for bankruptcy protection to address lawsuits alleging it pushed prescription painkillers while downplaying their abuse and overdose risks, according to people familiar with the matter. Purdue's CEO later confirmed the company was considering a bankruptcy filing. The company has denied allegations it contributed to the opioid crisis, pointing to the U.S. Food and Drug Administration approving labels on its drugs carrying warnings about risk and abuse associated with treating pain. Reckitt to Pay $1.4 billion to End U.S. Opioid Addiction Treatment Probes (Reuters) - Reckitt Benckiser has agreed to pay up to $1.4 billion to resolve U.S. claims that its former pharmaceuticals business Indivior before it was spun out of the company carried out an illegal scheme to boost sales of an opioid addiction treatment. [FN39] The settlement, the largest by any company related to the U.S. opioid epidemic, resolved long-running probes by the U.S. Justice Department and the Federal Trade Commission into the companies' marketing and sales of Suboxone Film. The deal came after Indivior in April was indicted and accused of deceiving doctors and healthcare benefit programs into believing Suboxone Film, itself a form of opioid, was safer and less susceptible to abuse than similar drugs. The indictment said Indivior also used an internet and telephone program touted as a resource for opioid-addicted patients to connect them to doctors it knew were prescribing Suboxone and other opioids at high rates and in suspect circumstances. The Justice Department said the scheme began before Indivior spun out of Reckitt in 2014 and resulted in thousands of opioid-addicted patients using the drug. Opioids, including prescription painkillers and heroin, played a role in a record 47,600 U.S. overdose deaths in 2017, the U.S. Centers for Disease Control and Prevention has said. Reckitt was not indicted like Indivior, but the department last year joined several whistleblower lawsuits alleging the British company improperly marketed the drug. As part of Thursday's settlement, Reckitt entered into a non-prosecution agreement and agreed to pay nearly $1.35 billion to resolve the Justice Department's criminal and civil claims. It will also pay $50 million to resolve FTC claims that it engaged in anticompetitive activities aimed at impeding competition from generic versions of Suboxone. Reckitt said in a statement that it “acted lawfully at all times and expressly denies all allegations that it engaged in any wrongful conduct.” But it said its board had decided the settlement was in the company's best interests. Slough, England-based Indivior has pleaded not guilty to conspiracy and fraud charges. In a statement, it acknowledged Reckitt's settlement but said it had no new information on the case. Its trial in federal court in Abingdon, Virginia is set for May. 'CLARIFIES LEGAL ENVIRONMENT' Shares in Reckitt, whose products range from Mucinex cold medicine and Lysol cleaners, closed up 2.5%. While the settlement is significantly higher than the $400 million that the consumer goods group had set aside to cover the cost of the investigations, analysts said it could allow the company's new chief executive to focus on a turnaround plan. In an effort to regain investor confidence after setbacks including a safety scandal in South Korea, a failed product launch and a cyber attack, Reckitt's outgoing boss Rakesh Kapoor launched a plan to split the group into two business units – one for health and one for hygiene and home products.

-34- Investors had feared the U.S. probes could hinder the transformation. Analysts at JP Morgan wrote in a note that settlement “clarifies the legal environment for RB and should allow the new management to focus on the RB 2.0 transformation.” While welcoming the settlement, AJ Bell investment director Russ Mould said the cost could limit incoming CEO Laxman Narasimhan's ability to undertake much-needed investment in Reckitt's brands. “The danger is that Narasimhan will be operating with one hand tied behind his back,” he said. The company said it would increase its provision related to the investigations to $1.5 billion to cover both the cost of the settlement and “any remaining litigation exposures.” It said the deal would be funded through existing borrowing facilities and cash generation. Separately, Indivior also raised its full-year profit and revenue guidance after Suboxone lost market share at a slower pace than expected. Its shares closed 6.73% higher. Oklahoma Makes Final Bid to Hold J&J Responsible for Opioid Epidemic (Reuters) - Oklahoma's attorney general on Wednesday made his final bid to force Johnson & Johnson to pay $17 billion for its part in fueling the opioid epidemic, saying the drugmaker's “egregious” marketing caused an oversupply of addictive drugs and overdose deaths. [FN40] Attorney General Mike Hunter in a brief filed in a state court in Norman, Oklahoma, argued that evidence presented during the first trial nationally in litigation over the epidemic showed J&J was “at the root of this crisis.” The state's lawyers said evidence presented during the seven-week trial that began in May showed J&J's decades-long marketing campaign convinced doctors and the public that opioids could be a “go-to, first-line treatment for everything from headaches to sprained ankles.” They said J&J and its subsidiaries “abandoned all standards of responsible conduct in their blind resolve to make money from their drugs,” creating a public nuisance in the form of an opioid crisis that since 2000 has killed 6,000 Oklahomans. Opioids were involved in almost 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. J&J countered in its own brief that while opioid abuse is a real problem, its painkillers, Duragesic and Nucynta, were a tiny fraction of all opioids prescribed in Oklahoma. It also said its marketing claims had scientific support. New Jersey-based J&J's lawyers also wrote that the state's case rested on “radical theories” unmoored from more than a century of court cases interpreting the state's public nuisance law, which it said only applies to property disputes. But the state's lawyers said applying the state's public nuisance statute to the epidemic was not an unprecedented expansion of the law. “While this opioid crisis is unprecedented, this exercise of the State's power is not,” the state's lawyers wrote. The briefs marked the final arguments both sides would make to Judge Thad Balkman, who is expected to rule later this month. The case is one of around 2,000 lawsuits filed nationally by states, counties and cities seeking to hold drug companies responsible for the opioid epidemic. The Oklahoma case is being closely watched by plaintiffs in other opioid lawsuits, particularly in 1,900 cases pending before a federal judge in Ohio who has been pushing for a settlement ahead of an October trial. OxyContin maker Purdue Pharma LP and Teva Pharmaceutical Industries Ltd were originally also defendants in the case. Purdue reached a $270 million settlement with Oklahoma in March and Teva settled for $85 million in May. Both deny wrongdoing. U.S. Judge Expresses Support for Novel Opioid Settlement Talks Framework (Reuters) - A federal judge on Tuesday expressed support for a novel plan by lawyers representing cities and counties suing drug companies over the U.S. opioid epidemic that would bring every community nationally into their settlement talks despite objections from most states. [FN41] U.S. District Judge Dan Polster during a hearing in Cleveland, Ohio said that while the idea was unprecedented, it could allow companies accused of fueling the epidemic in nearly 2,000 lawsuits before him an ability to obtain “global peace.” “There has to be some vehicle to resolve these lawsuits,” said Polster, who added he planned to rule quickly. The proposal calls for creating a class of up to 3,000 counties and 30,000 cities, towns and villages that could vote on whether to accept any settlement the plaintiffs reach with defendants in the opioid litigation. Attorneys general from 37 states and the District of Columbia pursuing related cases and probes have objected, saying the plan would likely face future court challenges that could derail all settlement efforts.

-35- Paul Singer, a lawyer with the Texas Office of the Attorney General, said the plan also interfered with the states' ability to decide how money is spent within their borders by setting a formula for allocating settlement funds among local governments. Polster said he believed the allocation system a strength of the proposal as it “gets the money to where the harm is” to help address the opioid epidemic's effects in communities nationally. Opioids were involved in 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. Thousands of lawsuits by states and local governments have accused drugmakers like OxyContin maker Purdue Pharma of downplaying the risks of opioids in their marketing, and accuse drug distributors of failing to halt suspicious opioid orders. Most of the localities' lawsuits are before Polster, who has pushed for a settlement before an October trial. Plaintiffs have claimed it could cost about $480 billion to address the epidemic. State attorneys general are pursuing their own cases in state courts as well investigations and settlement talks, which Singer called “active.” Bloomberg News, citing people familiar with the matter, on Tuesday reported drug distributors McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp had proposed paying $10 billion to resolve the states' claims. The states have proposed the distributors pay $45 billion, a person familiar with the matter told Reuters. Those companies oppose the plan Polster is considering. McKesson said it “has made no settlement offers.” AmerisourceBergen said it is vigorously defending itself, while Cardinal declined to comment. Shares of all three were down about 6% on an up day for the broader market. U.S. Drug Distributors Propose $10 billion to End State Lawsuits Over Opioids - Bloomberg (Reuters) - Drug wholesalers AmerisourceBergen Corp., McKesson Corp and Cardinal Health Inc have proposed a $10 billion settlement for claims that they played a part in the U.S. opioid epidemic, Bloomberg reported on Tuesday, citing people familiar with negotiations. [FN42] Hundreds of lawsuits by states and cities have been filed nationally accusing drugmakers of deceptively marketing opioids and distributors such as AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp of ignoring suspicious orders. Shares of AmerisourceBergen, McKesson and Cardinal Health were down about 5%. The National Association of Attorneys General, negotiating on behalf of more than 35 states, countered with a demand for $45 billion to cover costs, according to the Bloomberg report https://www.bloomberg.com/news/articles/2019-08-06/opioid-distributors-propose-10- billion-to-end-state-lawsuits. “We regularly engage with the state attorneys general, but the company has made no settlement offers,” McKesson said in a statement. Cardinal Health and AmerisourceBergen did not immediately respond to Reuters' request for comment. Drug Companies Have Duty to Halt Suspicious Opioid Orders - MDL Judge (Reuters) - A federal judge overseeing thousands of lawsuits accusing drug manufacturers and distributors of fueling the opioid epidemic rejected their arguments that they did not have a duty under the Controlled Substances Act to halt suspicious drug orders. [FN43]

The ruling by U.S. District Judge Dan Polster in Cleveland, Ohio, was a victory for lawyers for cities and counties suing the drug companies who argued the companies' legal duties went beyond just identifying and reporting suspicious orders. Paul Hanly, a lawyer for the plaintiffs at Simmons Hanly Conroy, called the decision “an excellent result that spares the parties time and resources at trial.” The companies did not respond to requests for comment. Drug companies including OxyContin maker Purdue Pharma LP and distributors including McKesson Corp, AmerisourceBergen and Cardinal Health argued the plaintiffs misread the CSA and its regulations to create legal duties under it that did not exist. But Polster held that a duty to not ship suspicious orders arises from the legal obligations under the CSA of companies registered with the DEA to maintain effective controls against the diversion of controlled substances for improper purposes. Polster said given those obligations, he was “hard-pressed to think of a more basic requirement than not to ship a dubious order bearing indicia that the drugs could be diverted to illegal channels.” “How can a registrant freely ship suspicious orders and still comply with its duty to maintain controls against diversion? It cannot,” he wrote. “It has a duty not to ship the order unless due diligence reasonably dispels the suspicion.” While the judge agreed the companies were required to halt suspicious orders, he declined at this time to find the companies failed to comply with the CSA's duties to halt suspicious opioid orders shipped to two counties in Ohio.

-36- Those counties, Summit and Cuyahoga, will be the first plaintiffs to take their cases to trial in the multidistrict litigation on Oct. 21. Polster said factual disputes will require a jury to decide the question. The decision comes amid ongoing settlement talks pushed by Polster. The plaintiffs' lawyers in a July 19 motion asked Polster to rule on what duties the companies had under the CSA, saying a decision could “substantially advance resolution of the claims asserted by litigants from across the country.” Opioids were involved in 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. More than 2,300 lawsuits are pending nationally by state and local governments accusing drug manufacturers of deceptively marketing opioids in ways that downplayed their risks and drug distributors of failing to detect suspicious orders. More than 2,000 of those lawsuits - largely by cities and counties - are pending before Polster, who since 2017 has overseen the federal multidistrict litigation over the opioid epidemic. He has since then been pushing for a settlement that could “do something meaningful to abate this crisis.” The companies deny wrongdoing, saying they marketed their drugs appropriately and sought to comply with their legal obligations. They also argue they did not cause the epidemic, citing other factors. The case is In re National Prescription Opiate Litigation, U.S. District Court for the Northern District of Ohio, No. 17-md-02804. Drugmakers Endo, Allergan Agree to $15 million in Settlements in Major Opioid Case (Reuters) - Endo International Plc and Allergan Plc have agreed to pay $15 million to avoid going to trial in October in a landmark case by two Ohio counties accusing various drug manufacturers and distributors of fueling the U.S. opioid epidemic. [FN44] The tentative deals disclosed on Tuesday came ahead of the first trial to result from 2,000 lawsuits pending in federal court in Cleveland largely by local governments seeking to hold drug companies responsible for the deadly epidemic. Endo announced said it had reached an agreement-in-principle to pay Cuyahoga and Summit counties $10 million to and provide them up to $1 million worth of two of its of its drug products free of charge. Allergan has tentatively agreed to pay $5 million to resolve claims involving its branded opioids, though the deal does not resolve claims involving generic painkillers, said Frank Gallucci, a lawyer for Cuyahoga County. Allergan did not respond to requests for comment. The accords are the first to result from the counties' cases, which were selected for the first bellwether, or test, trial in the litigation to allow parties to gauge the value of the remaining claims and inform potential settlement talks. Other companies still set to face trial on Oct. 21 include drugmakers Purdue Pharma LP, Teva Pharmaceutical Industries Ltd and Johnson & Johnson and drug distributors McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp. Endo's chief legal officer, Matthew Maletta, called the settlement a “favorable outcome” and stressed its value should not be extrapolated to any other opioid-related cases. Endo, which in 2017 withdrew its painkiller Opana ER from the market, said the settlement includes no admission of wrongdoing. Opioids were involved in 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. More than 2,300 lawsuits by state and local governments are pending nationally, accusing drug manufacturers of deceptively marketing opioids in ways that downplayed their risks and drug distributors of failing to detect and halt suspicious orders. The companies deny wrongdoing, saying they complied with their legal obligations and did not cause the epidemic. Most of the lawsuits are before U.S. District Judge Dan Polster in Cleveland, who has pushed for a settlement and will preside over the bellwether trial. Purdue and Teva this year settled claims by Oklahoma's attorney general for $270 million and $85 million, respectively, ahead of a trial before a state-court judge. The state subsequently took J&J to trial. A ruling is expected next week. Oklahoma Judge Finds J&J Liable in Opioid Epidemic, Orders $572 million in Damages (Reuters) - An Oklahoma judge on Monday found Johnson & Johnson liable for fueling an opioid epidemic in the state by deceptively marketing painkillers, and ordered the drugmaker to pay damages of $572 million. [FN45] The damages awarded by Judge Thad Balkman of Cleveland County District Court in Norman, Oklahoma, following a seven-week, non-jury trial came in what had been a $17 billion lawsuit alleging that J&J's marketing practices helped fuel the opioid epidemic by flooding the market with painkillers.

-37- J&J said it would appeal the verdict. J&J shares rose 5% in extended trading following the decision. Shares of other drugmakers, including Teva Pharmaceutical Industries Ltd and Endo International Plc also rose after-hours. The case brought by Oklahoma Attorney General Mike Hunter was the first to go to trial out of thousands of lawsuits filed by state and local governments against opioid manufacturers and distributors. Oklahoma sued J&J to help it address the epidemic for the next 30 years through addiction treatment and prevention programs. “The opioid crisis is an imminent danger and menace to Oklahomans,” Balkman said as he delivered his decision from the bench. The trial came after Oklahoma resolved claims against OxyContin maker Purdue Pharma LP in March for $270 million and against Teva in May for $85 million, leaving J&J as the lone defendant. The litigation has been closely watched by plaintiffs in about 2,000 opioid lawsuits pending before a federal judge in Ohio who has been pushing for a settlement ahead of an October trial. Some plaintiffs' lawyers have compared the opioid cases to litigation by states against the tobacco industry that led to a $246 billion settlement in 1998. Opioids were involved in almost 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. Since 2000, some 6,000 Oklahomans have died from opioid overdoses, according to the state's lawyers. During the trial, lawyers for Oklahoma argued that J&J carried out a years-long marketing campaign that minimized the painkillers' addiction risks and promoted their benefits. The state's lawyers called J&J an opioid “kingpin” and argued that its marketing efforts created a public nuisance as doctors over- prescribed the drugs, leading to a surge in overdose deaths in Oklahoma. J&J has denied wrongdoing, saying its marketing claims had scientific support and that its painkillers, Duragesic and Nucynta, accounted for a tiny fraction of opioids prescribed in Oklahoma. The company also said in a statement that since 2008, its painkillers accounted for less than 1 percent of the U.S. market, including generics. Lawyers for New Jersey-based J&J have said the case rested on a “radical” interpretation of the state's public nuisance law. J&J on Monday, prior to the decision, called the state's attempt to use public nuisance law to resolve a complex social problem “misguided and legally unsustainable.” “Not once did the state identify a single Oklahoma doctor who was misled by a single Janssen statement, nor did it prove that Janssen misleadingly marketed opioids or caused any harm in Oklahoma,” John Sparks, Oklahoma counsel for Johnson & Johnson, said in a statement. Janssen Pharmaceuticals is the healthcare conglomerate's primary prescription drugs unit. J&J said it has not set aside a litigation reserve to pay potential damages, and that its policy is to do so once a loss is “probable and can be reasonably estimated.” U.S. Judge Allows Public Nuisance Claim in Opioid Trial (Reuters) - The U.S. judge overseeing nationwide litigation concerning the opioid epidemic on Monday rejected Purdue Pharma LP's effort to dismiss claims that its activities caused a public nuisance. [FN46] U.S. District Judge Dan Polster in Cleveland ruled six weeks before the first scheduled federal trial over the epidemic, in a case brought by Cuyahoga and Summit counties in Ohio. Polster also rejected efforts by Purdue, pharmacies such as Walgreens Boots Alliance Inc and drug distributors such as AmerisourceBergen Corp to exclude testimony from a Harvard Medical School economist who believes the two counties suffered as much as $223.4 million of damages from 2006 to 2018. The decisions follow a series of rulings from Polster on Sept. 3 favoring the counties, including that they could pursue civil conspiracy claims against the defendants. Purdue, which makes OxyContin, and its billionaire owners, the Sackler family, have been trying to negotiate a settlement over its responsibility for the opioid epidemic. Addiction to the painkillers has claimed roughly 400,000 lives in the United States from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. Purdue is expected to seek bankruptcy protection this month absent a settlement, three people familiar with the matter said last week. The Stamford, Connecticut-based company said on Monday that “negotiations continue” with state attorneys general and other plaintiffs, repeating its statement from a day earlier.

-38- “While the company is prepared to defend itself vigorously in the opioid litigation, Purdue has made clear that it prefers a constructive global resolution,” it said. Paul Hanly, a lawyer for the counties, said Polster offered “numerous sound reasons” not to dismiss the litigation. Polster oversees roughly 2,000 opioid lawsuits by various municipalities and entities, and the outcome of the scheduled Oct. 21 trial could affect those cases. A bankruptcy filing would likely remove Purdue from that trial. Polster said the Ohio counties offered enough evidence for jurors to conclude that Purdue intentionally misrepresented the risks of opioid use, for the purpose of increasing sales. He also said the economist, Thomas McGuire, had offered “outside, neutral and authoritative sources” showing his methodology for estimating damages. The drugmakers Allergan Plc, Endo International Plc and Mallinckrodt Plc have settled with the counties for a combined $39 million in cash. Other defendants in opioid cases include Johnson & Johnson; pharmacy operators CVS Health Corp, Rite Aid Corp and Walmart Inc; distributors Cardinal Health Inc and McKesson Corp and generic drugmaker Teva Pharmaceutical Industries Ltd. U.S. Judge Approves Novel Framework for Opioid Settlement Talks (Reuters) - A federal judge on Wednesday approved the substance of a proposal by lawyers representing cities and counties suing drug companies over the U.S. opioid epidemic that would bring every state and municipality in the country into their settlement talks. [FN47]

U.S. District Judge Dan Polster, in Cleveland, Ohio, federal court, said that the plan, which was opposed by 37 states and the District of Columbia, “does not interfere with the states settling their own cases any way they want.” “This process simply provides an option - and in the court's opinion, it is a powerful, creative and helpful one,” the judge wrote. The proposal, part of litigation consolidating about 2,000 lawsuits against opioid manufacturers, retailers and others seeking damages for the epidemic, calls for creating a class of up to 3,000 counties and 30,000 cities, towns and villages that could vote on whether to accept any settlement the plaintiffs reach with the defendants. A settlement would need to win support of at least 75 percent of class members to be approved. To address concerns from states, Polster ruled the process could not be used to negotiate on behalf of counties and municipalities against their own state governments in any disputes over allocating settlement funds. The offices of the Texas and Ohio attorneys general, which argued for the states opposing the plan at a hearing last month, could not immediately be reached for comment. Some of the companies being sued, including McKesson Corp, AmerisourceBergen Corp, Walgreen Co, Walmart Inc and others, also opposed the framework. Lawyers for the companies could not immediately be reached for comment. Polster's approval of the proposal came as Purdue Pharma LP, one of the defendants in the opioid litigation, neared a settlement with more than 2,000 cities, counties and other plaintiffs ahead of an expected bankruptcy filing. Opioids were involved in 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. Thousands of lawsuits by states and local governments have accused drugmakers like OxyContin maker Purdue Pharma of downplaying the risks of opioids in their marketing, and accuse drug distributors of failing to halt suspicious opioid orders. Most of the localities' lawsuits are before Polster, who has pushed for a settlement before trial. Plaintiffs have claimed it could cost about $480 billion to address the epidemic. State attorneys general are pursuing their own cases in state courts as well investigations and settlement talks. Opioid Plaintiffs Fight Bid to Disqualify U.S. Judge before Trial (Reuters) - Lawyers for cities and counties suing drug companies over the opioid epidemic on Monday objected to a bid by pharmaceutical distributors and pharmacies to disqualify the federal judge overseeing the cases, saying it had no basis and came too late. [FN48] The plaintiffs' lawyers moved swiftly to fight the request companies including AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp had made on Saturday for U.S. District Judge Dan Polster in Cleveland, Ohio, to step aside from the litigation. In Monday's brief, lawyers for the plaintiffs said the defendants had waived their ability to seek Polster's recusal, noting they were relying on statements he made more than a year ago to belatedly seek his disqualification.

-39- “If these Defendants really thought recusal was necessary, they were required to raise the issue sooner - much sooner,” the plaintiffs' lawyers wrote. More than 2,500 lawsuits by state and local governments are pending nationally, accusing drug manufacturers of deceptively marketing opioids in ways that downplayed their risks, and drug distributors of failing to detect and halt suspicious orders. The companies deny wrongdoing. Nearly 2,100 of the lawsuits are before Polster, while others are in state courts. The companies had argued in Saturday's motion that Polster, who has long pushed for a settlement that could “do something meaningful to abate this crisis,” had made a series of public statements since 2018 that could cause a reasonable person to question his impartiality. They said those statements, made in court hearings and media interviews, raised the prospect that he had improperly prejudged their liability ahead of the first trial on Oct. 21 involving two Ohio counties seeking $8 billion. In Monday's brief, the plaintiffs' lawyers said the companies did not take action when Polster made those comments and actively participated in court-overseen settlement talks without objection. Polster “has at no time expressed improper or biased views about the liability of any defendant, much less views based on extra-judicial sources,” the lawyers wrote. The companies who joined Saturday's motion also include CVS Health Corp and Walmart Inc. The defendants did not respond to requests for comment. Opioids were involved in 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. OxyContin maker Purdue Pharma, one of the lead defendants, filed for bankruptcy protection on Monday after reaching a tentative deal to resolve claims in the federal litigation and by 24 U.S. states. U.S. Judge Overseeing Opioid Litigation Won't Disqualify Himself (Reuters) - The U.S. judge overseeing nationwide litigation over the opioid epidemic on Thursday rejected a request by major pharmacies and drug distributors that he disqualify himself after pressing too hard for a potentially costly settlement. [FN49] While admitting he had been “very active” in encouraging a settlement, U.S. District Judge Dan Polster in Cleveland said he was “confident that no reasonable person can legitimately question my impartiality.” He also said that resolution of what he called a “social epidemic” should be the job of the government's executive and legislative branches but “these are not ordinary times,” and that not settling could overwhelm the courts and drive “most of the defendants” into bankruptcy. “It is important for our citizens to know what I am doing and to have confidence that the judicial branch is up to the task,” Polster wrote. “The moving defendants complain that I have had a ‘personal mission’ from the start of the case. That is true, but it does not suggest any bias or partiality.” Polster oversees more than 2,000 lawsuits by state and local governments and other municipal entities over opioids. A bellwether trial brought by two Ohio counties is scheduled to begin on Oct. 21. The companies that sought Polster's disqualification included retailers CVS Health Corp, Rite Aid Corp, Walgreens Boots Alliance Inc and Walmart Inc, and distributors AmerisourceBergen Corp, Cardinal Health Inc, Henry Schein Inc and McKesson Corp. Their lawyers did not immediately respond to requests for comment. Lawyers representing the plaintiffs had no immediate comment. Johnson & Johnson Settles Ohio Lawsuits to Avoid Federal Trial (Reuters) - Johnson & Johnson said on Tuesday it will pay $20.4 million to settle claims by two Ohio counties, allowing the U.S. healthcare giant to avoid an upcoming federal trial seeking to hold the industry responsible for the nation's opioid epidemic. [FN50] J&J became the fourth drugmaker to settle claims ahead of the Federal Court trial against multiple manufacturers and distributors in Cleveland scheduled for later this month. The case is considered a bellwether for more than 2,600 lawsuits by state and local governments that are pending nationally. “The settlement allows the company to avoid the resource demands and uncertainty of a trial as it continues to seek meaningful progress in addressing the nation's opioid crisis,” J&J said in a statement. “The company recognizes the opioid crisis is a complex public health challenge and is working collaboratively to help communities and people in need,” it added. Opioids were involved in 400,000 overdose deaths in the United States from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. J&J which formerly marketed the painkillers Duragesic and Nucynta, said the settlement includes no admission of liability.

-40- The company will pay $10 million to Cuyahoga and Summit counties, reimburse $5 million of their legal and other expenses and provide $5.4 million to non-profit organizations that run opioid-related programs in the counties. Mallinckrodt Plc finalized a $24 million settlement with the same two counties on Monday. Endo International Plc and Allergan Plc also settled with the two counties in August to avoid going to trial. The remaining defendants in the Oct. 21 federal trial include McKesson Corp, AmerisourceBergen, Cardinal Health, Teva Pharmaceutical Industries Ltd, Walgreens Boots Alliance Inc and Henry Schein Inc. OxyContin maker Purdue Pharma LP succumbed to pressure from the lawsuits and filed for bankruptcy protection in September. Some plaintiffs' lawyers have compared the opioid cases to litigation by states against the tobacco industry that led to a $246 billion settlement in 1998. Earlier in the year, an Oklahoma judge ordered Johnson & Johnson to pay $572.1 million to the state for its part in fueling an opioid epidemic by deceptively marketing addictive painkillers. Purdue Pharma and Teva had settled claims by Oklahoma's attorney general for $270 million and $85 million, respectively. Cracks in Purdue's Proposed Opioid Settlement as Arizona Backs Out (Reuters) - The U.S. state of Arizona withdrew its support for a proposed nationwide opioid settlement with Purdue Pharma LP, saying the maker of OxyContin sought to “undermine material terms of the deal,” according to a court filing on Monday. [FN51] Since Purdue filed for bankruptcy protection in September, Arizona is the first state to switch sides in the looming showdown over the privately-held company's proposed settlement, which it has estimated is worth more than $10 billion. Purdue reached the deal last month with 24 states and the local governments that have filed the bulk of the more than 2,600 lawsuits against the company. The lawsuits allege Purdue and its Sackler family owners contributed to a public health crisis by aggressively marketing opioids while downplaying their addiction and overdose risks, which contributed to nearly 400,000 deaths since 1999, according to U.S. statistics. “Purdue and the Sackler family need to take responsibility for their role in the opioid crisis,” said Arizona Attorney General Mark Brnovich said in a statement. Purdue declined to comment. Last week, court filings from states and local governments opposing the settlement asserted that Purdue steered up to $13 billion in profits to the Sackler family, more than triple the amount previously cited in litigation. A lawyer for some of the Sacklers last week said in a statement that much of the money was paid in taxes and reinvested in businesses that will be sold as part of the proposed settlement. U.S. Bankruptcy Judge Robert Drain in White Plains, New York, will on Friday consider Purdue's request for an injunction to pause the litigation for about nine months. Purdue said it needs time to try to settle the remaining cases. Purdue also asked Drain to shield the Sacklers from litigation, even though they have not filed for bankruptcy, partly because the family has proposed contributing at least $3 billion toward the settlement. Opponents of the settlement accused the family of using Purdue's bankruptcy to shield their wealth from victims. With Arizona, 25 states now oppose the deal. Kentucky and Oklahoma reached prior settlements with Purdue. Separately on Tuesday, a Massachusetts judge ruled against the Sacklers, who sought to have the state's lawsuit against them dismissed. The judge rejected their argument they did not personally participate in Purdue's conduct. Massachusetts was the first state to sue the Sacklers and Attorney General Maura Healey is leading the opposition to the proposed settlement. U.S. Judge Overseeing Opioid Litigation Will Not Be Disqualified (Reuters) - A federal appeals court on Thursday rejected a bid by eight drug retailers and distributors to disqualify the judge overseeing nationwide opioid litigation, after they claimed his rulings, public statements and efforts to encourage settlements created an appearance of bias. [FN52] The ruling, by the 6th U.S. Circuit Court of Appeals in Cincinnati, means U.S. District Judge Dan Polster can continue presiding over the litigation, including a landmark trial scheduled to begin in Cleveland on Oct. 21. Companies that sought Polster's removal included retailers CVS Health Corp, Rite Aid Corp, Walgreens Boots Alliance Inc and Walmart Inc, and distributors AmerisourceBergen Corp, Cardinal Health Inc, Henry Schein Inc and McKesson Corp. Ohio Counties Can't Seek $800 million in ‘Future’ Opioid Damages

-41- (Reuters) - Two Ohio counties cannot at a landmark trial over the nation's opioid crisis present evidence to jurors showing they deserve $800 million to address “future damages” caused by six drug companies they say fueled the epidemic, a special master has ruled. [FN53] Sunday's decision by David Cohen, who at the request of a federal judge in Cleveland, Ohio, oversees discovery disputes in the multidistrict litigation over the epidemic, was a setback for the plaintiffs in the bellwether trial set for Oct. 21. The damages are a subset of the $8 billion that Ohio's Cuyahoga and Summit counties are seeking from the six companies, whom they accuse of fueling the epidemic by deceptively marketing opioids and failing to halt suspicious orders. Those companies include the drug manufacturer Teva Pharmaceutical Industries Ltd, distributors McKesson Corp, AmerisourceBergen, Cardinal Health and Henry Schein Inc and pharmacy chain operator Walgreens Boots Alliance Inc. Their case will be the first to go to trial before U.S. District Judge Dan Polster, who presides over 2,300 of the 2,600 lawsuits nationally by states and local governments over the epidemic. Opioids were involved in 400,000 overdose deaths from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention. The counties sought to amend their experts' damages reports after Polster last month concluded that if the jury found the companies liable for creating a public nuisance, he would determine the financial remedy. That decision meant the bulk of what the counties were seeking at trial - the costs of abating, or redressing, the epidemic in their communities going forward - was no longer a jury issue. Following Polster's ruling, the counties on Sept. 23 submitted two sets of amendments to their experts' earlier reports estimating damages to include calculations showing they would suffer around $800 million in future damages. They said those future damages could be awarded on top of the up to $301 million they were seeking for past damages if the companies were found liable for racketeering, civil conspiracy and violating Ohio's consumer protection law. But Cohen on Sunday agreed with the companies that allowing the plaintiffs to present new expert opinions regarding damages so close to trial was prejudicial and would “potentially change the nature of the trial.” He said the experts' calculations would have the effect of shifting around $770 million from the category of potential future abatement costs, which Polster would decide, to “future damages,” which would be up to the jury. Cohen said should the counties object to his ruling they should do so before Polster at a final pretrial hearing on Tuesday. Paul Hanly, a lead attorney for the plaintiffs at Simmons Hanly Conroy, and representatives for the defendants did not respond to requests for comment. The case is In re National Prescription Opiate Litigation, U.S. District Court for the Northern District of Ohio, No. 17-md-02804. For the plaintiffs: Paul Hanly of Simmons Hanly Conroy, Joseph Rice of Motley Rice and Paul Farrell of Greene Ketchum Farrell Bailey & Tweel. Drug Companies Avert Landmark Opioids Trial as Talks on $48 billion Settlement Set to Resume (Reuters) - Four large drug companies could resume talks on Tuesday to try to reach a $48 billion settlement of all opioid litigation against them, after agreeing with two Ohio counties to a $260 million deal to avert the first federal trial over their role in the U.S. opioid epidemic. [FN54] Drug distributors AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp and drugmaker Teva Pharmaceutical Industries Ltd agreed to the deal that removed the immediate threat of a trial that was to begin on Monday in Cleveland. The parties could resume talks as soon as Tuesday aimed at a broader settlement of thousands of opioid lawsuits brought by states and local governments, according to Paul Hanly, an attorney for the towns and counties. Under Monday's local settlement, the distributors, which handle around 90% of U.S. prescription drugs, will pay a combined $215 million immediately to Ohio's Cuyahoga and Summit counties that were plaintiffs in Monday's trial. Israel-based Teva said it was paying $20 million in cash and will contribute $25 million worth of Suboxone, an opioid addiction treatment. Teva, the world's largest maker of generic drugs, said it will make its contribution over three years. The companies have been accused of fueling a nationwide opioid crisis. Some 400,000 U.S. overdose deaths between 1997 and 2017 were linked to opioids, according to government data. “While the companies strongly dispute the allegations made by the two counties, they believe settling the bellwether trial is an important stepping stone to achieving a global resolution,” the distributors said in a joint statement. Hanly said his team rejected a proposed $18 billion settlement last week from the three distributors because the payments were due to be made over 18 years.

-42- “One billion dollars for the entire year is a ham sandwich,” said Hanly. “It's way too small an amount.” Teva and attorneys general for four states pushed to salvage a deal they had reached last week, which was rejected by the team representing local governments. North Carolina Attorney General Josh Stein told reporters on a conference call that he and his counterparts in Pennsylvania, Texas and Tennessee had an agreement in principle with the distributors as well. He said the deal was comprised of $22 billion in cash and $26 billion in treatment drugs. Teva said it had agreed with the four attorneys general to contribute opioid treatment drugs worth $23 billion, as well as $250 million in cash over 10 years. The other contributions to the broader settlement were to come from the distributors. 'POSITIVE MOMENTUM' It was not yet clear if the settlement framework the four states announced would receive support from other states or the local governments, who had previously contended it was inadequate. Pennsylvania Attorney General Josh Shapiro said he believed “there's a lot of positive momentum” after Friday's settlement talks, which he said also included Johnson & Johnson. Hanly said the attorneys general deal was spread over too many years to be acceptable. He said he did not expect the attorneys general to participate when talks resumed this week. The so-called bellwether, or test trial, that had been set for Monday could have helped shape a broader settlement of some 2,600 lawsuits pending over the toll opioids have taken on local communities and the nation. Shares in the companies had risen last week in anticipation of a broader deal. On Monday, shares of the big three drug distributors were down as much as 5% but recovered after Teva's statement and closed down around 2% to 3%. “We are not surprised to see distributor shares giving back some of last week's gains as uncertainty persists in this extremely complex litigation,” Baird analyst Eric Coldwell wrote in a note. The settlement, if extrapolated to a nationwide deal resolving all litigation for the four defendants, suggests a settlement value of around $48 billion, based on a court-approved allocation formula. Hanly said he had not done the same calculation, but thought it was likely worth more. The lawsuits accuse drugmakers of overstating the benefits of opioids while downplaying the risks and allege distributors failed to flag and halt a rising tide of suspicious orders. The companies have denied wrongdoing. Drugmakers argued their products carried government-approved labels that warned of the addictive risks of opioids, while distributors had argued that their role was to make sure medicines prescribed by licensed doctors were available for patients. Monday's settlement adds to deals worth $66.4 million that the two Ohio counties earlier struck with drug companies Mallinckrodt Plc, Endo International Plc, J&J and Allergan Plc. Cuyahoga County has said it will use the funds to expand residential treatment beds, increase emergency care follow-up and to create alternatives to jailing low-level drug offenders, among other initiatives. N.Y. Insurance Regulator Notifies Opioid Makers, Distributors of Enforcement Action: Sources (Reuters) - New York's insurance regulator has formally notified a group of opioid manufacturers and distributors that it will launch a civil enforcement action against them for contributing towards a rise in health insurance premiums in the state, said two sources familiar with the matter. [FN55] The New York State Department of Financial Services (NYDFS) has sent letters to around 23 opioid manufacturers and distributors, notifying them that the regulator would begin the process to hold a hearing on the issue in an administrative proceeding, the sources said. New York Governor Andrew Cuomo said in September the state would launch a legal action against drug companies and distributors that sell opioids in order to recoup about $2 billion in insurance rate increases that were passed on to New York consumers because of opioids. Premiums surged because insurers had to cover prescription costs and opioid-related issues such as emergency room visits and addiction treatments, Cuomo had said. Opioids were involved in almost 400,000 overdose deaths in the country here between 1999 and 2017, according to the U.S. Centers for Disease Control and Prevention. Opioid litigation is playing out across the United States, including some 2,600 lawsuits brought by states, towns, cities, counties and tribal governments over the opioid epidemic.

-43- The two sources familiar with the NYDFS action declined to name the companies to which the letters were sent. Cuomo, on Sept. 10, published a list of entities the regulator had subpoenaed here including Purdue Pharma Inc, Johnson & Johnson, Teva Pharmaceuticals USA Inc, McKesson Corp, AmerisourceBergen Drug Corp and Janssen Pharmaceuticals Inc. “Janssen acted as a responsible manufacturer and seller of its opioid pain medications, which play in an important role in the lives of patients with severe pain,” the company said. Other companies mentioned above could not immediately be reached for comment. A letter of intent to bring an enforcement action follows a determination by the regulator that there is sufficient evidence to bring the case, the sources said. The entities will first have an opportunity to try to convince the regulator not to start the proceeding. The case would be heard by a hearing officer within the agency. Funds that New York would collect from the suits would be returned to consumers, possibly in the form of rebates of lower insurance premiums, NYDFS Superintendent Linda Lacewell has said. Opioid Judge Seeks to ‘Accelerate’ Resolution with Case Remands (Reuters) - The federal judge tasked with overseeing thousands of lawsuits accusing drug companies of fueling the opioid epidemic sought on Tuesday to “accelerate and facilitate resolution” of the cases by sending several back to their original courts for trial. [FN56] U.S. District Judge Dan Polster in Cleveland, Ohio, in an order suggested the Judicial Panel on Multidistrict Litigation remand lawsuits by San Francisco, Chicago and the Cherokee Nation to the courts they were originally filed in. The judge said he also planned to ask the panel to remand lawsuits by the City of Huntington, West Virginia, and Cabell County, West Virginia, soon, both of which he had previously picked to serve as the bellwether plaintiffs in the next trial. Instead, Polster said the next trial in October 2020, would center on claims by Ohio's Cuyahoga and Summit counties that pharmacy operators including Walgreens Boots Alliance Inc, CVS Health and Rite Aid filled suspicious opioid orders. Paul Hanly, a lawyer for the plaintiffs at Simmons Hanly Conroy, welcomed the rulings, saying Polster is “working tirelessly and with keen intellect to process the cases in this MDL efficiently and fairly.” Representatives of the companies either declined comment or had no immediate comment. The cases are among around 2,800 lawsuits nationwide by state and local governments accusing drug manufacturers of deceptively marketing opioids and distributors of failing to halt the drugs' diversion for illicit purposes. The companies deny wrongdoing. Polster, who oversees 2,436 of those cases, has pushed for a settlement. Claims by the two Ohio counties against drugmakers and distributors were set last month to be the subject of the first bellwether trial in the multidistrict litigation. The counties instead settled with those defendants, reaching $260 million in deals with the distributors AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp and drugmaker Teva Pharmaceutical Industries Ltd the day the trial was to start. Polster in his order suggesting three cases should be remanded to judges in California, Illinois and Oklahoma said his experience with the Ohio counties' case made him realize the bellwether trial process he was overseeing would “simply take too long.” “Meanwhile, the Opioid Crisis shows no sign of ending,” he wrote. McKesson, Cardinal, AmerisourceBergen, Teva and Johnson & Johnson have proposed settling the all of the cases for $48 billion as part of a framework negotiated by four state attorneys general. The framework has not been agreed to by other states yet, and lawyers for the local governments oppose the proposal. The case is In re National Prescription Opiate Litigation, U.S. District Court for the Northern District of Ohio, No. 17-md-02804. Bankrupt Insys Reaches Deal to Divvy Cash Among Opioid Victims (Reuters) - Drugmaker Insys Therapeutics Inc outlined a deal on Thursday to divide its dwindling cash among governments, insurers, hospitals and individuals who accused the company of fueling the U.S. opioid crisis. [FN57] The company was largely adopting a plan it had filed in September, which now had the support of numerous groups that initially opposed it, said Brenda Funk, who represents the company, at Thursday's hearing before a U.S. bankruptcy judge Kevin Gross in Delaware. The agreement addresses a problem that looms over the thousands of U.S. opioid lawsuits against some of the biggest drug companies - how to carve up the tens of billions of dollars from legal settlements among the plaintiffs. The Insys agreement established the company owed various parties a combined $1 billion, well below the billions of dollars that could have been claimed. In addition, the Department of Justice would have a claim of $243 million, along with undetermined claims for forfeiture and restitution.

-44- “I think this compromise is sufficiently bad for everyone, but everyone should go along with it,” said Andrew Troop, who represents New York. Most will get pennies on the dollar. Chandler, Arizona-based Insys has only $39 million in cash, according to filings. Insys also has estimated it could receive $60 million from an agreement to sell its fentanyl spray Subsys, $56 million from insurance and funds from lawsuits. John Kapoor, the founder and former billionaire, would seem a likely legal target. He was found guilty of conspiracy to bribe doctors to prescribe Subsys and misleading insurers. However, federal prosecutors have said they plan to seek $242 million in restitution from Kapoor. His lawyers say that demand exceeds his personal wealth. Kapoor also faces up to 20 years in prison. Insys filed for bankruptcy in June just days after the company struck a $225 million settlement with the Justice Department that included an agreement by a subsidiary to plead guilty to fraud. Insys, like numerous makers or distributors of opioids, also faced lawsuits by state attorneys general, local governments, health insurers, hospitals, guardians for children harmed by exposure to opioids in the womb and classes of individuals. The opioid crisis has contributed to more than 400,000 U.S. deaths since 1997. In September, OxyContin maker Purdue Pharma LP also filed for bankruptcy and has proposed to settle its lawsuits for what it says is $10 billion. The judge overseeing that bankruptcy has warned the parties about fighting over the proceeds. U.S. Supreme Court Rejects Arizona Opioid Case Against Purdue, Sackler Family (Reuters) - The U.S. Supreme Court on Monday turned away a novel case by Arizona seeking to recover billions of dollars that the state has said that members of the Sackler family - owners of Purdue Pharma LP - funneled out of the OxyContin maker before the company filed for bankruptcy in September. [FN58] The justices declined to take the rare step of allowing Arizona Attorney General Mark Brnovich to pursue a case directly with the Supreme Court on the role the drugmaker played in the U.S. opioid epidemic that has killed tens of thousands of Americans annually in recent years. The lawsuit accused eight Sackler family members of funneling $4 billion out of Purdue from 2008 to 2016 despite being aware that the company faced massive potential liabilities over its marketing of opioid medications. Brnovich argued that the national importance of holding those responsible for the opioid crisis accountable justified taking the case directly to the justices. Brnovich is a Republican. The case is among the thousands filed by states, counties and cities seeking to hold Stamford, Connecticut-based Purdue, and in many cases the Sacklers, responsible for a U.S. opioid addiction crisis that since 1999 has resulted in more than 400,000 overdose deaths. The lawsuits accuse the company of deceptively marketing opioids by overstating their benefits and playing down the risks. Purdue filed for Chapter 11 bankruptcy protection in September after reaching a tentative deal it values at $10 billion to resolve those cases. Only half the states support the proposed deal, with many wanting the Sacklers to contribute more than the initial $3 billion the families pledged to pay. A federal bankruptcy judge has placed a hold on all of the lower court and state court cases against Purdue. But Arizona declined to withdraw its Supreme Court case. States opposed to Purdue's $10 billion settlement proposal in a later bankruptcy filing in October asserted that the amount of money the Sacklers received was $13 billion, more than triple the amount previously cited. Lawyers for Purdue argued the bankruptcy court is a better forum than the Supreme Court to resolve Arizona's claims. In a brief, the states of Ohio, Alaska, North Dakota, Louisiana and Utah supported Arizona. Brnovich's case relied upon language in the U.S. Constitution giving the Supreme Court “original jurisdiction” over disputes in which a state is a party, meaning states can file a lawsuit at the high court instead of litigating first in lower courts.

[FN1] . Will Boggs, MD, Opioid prescriptions, overdose deaths most common among low-income whites, Reuters (Feb. 12, 2019).

[FN2]

-45- . Nate Raymond, Maine jail must provide opioid treatment to inmate, court rules, Reuters (May 1, 2019).

[FN3] . Lisa Rapaport, In states with most overdose deaths, poor patients struggle to find treatment, Reuters (June 3, 2019).

[FN4] . Linda Carroll, Opioid overdose deaths decline when pharmacists can dispense naloxone, Reuters (May 9, 2019).

[FN5] . Lisa Rapaport, Teens may struggle to get opioid overdose drug at U.S. pharmacies, Reuters (Sept. 26, 2019).

[FN6] . “Emergency Nurses Association Praises Signing of SUPPORT Act,” October 24, 2018, available at: https://www.ena.org/press-room/ articles/detail/2018/10/24/emergency-nurses-association-praises-signing-of-support-act.

[FN7] . Nate Raymond, Judge blocks New York from enforcing opioid surcharge on companies, Reuters (Dec. 19, 2018).

[FN8] . David Schwartz, Largest-ever U.S. border seizure of fentanyl made in Arizona - officials, Reuters (Jan. 31, 2019).

[FN9] . Gene Emery, Cutbacks by some doctors halved new opioid prescriptions over 5 years, Reuters Health eLine (March 13, 2019).

[FN10] . Marilynn Larkin, Diagnosis, treatment of opioid use disorder in pregnancy tied to state laws in US, Reuters (March 14, 2019).

[FN11] . Michael Martina, China expands curbs on fentanyl, blames U.S. for its abuse, Reuters (April 1, 2019).

[FN12] . Nate Raymond and Eric Beech, U.S. indicts Indivior over Suboxone opioid treatment marketing, Reuters (April 9, 2019).

[FN13] . Gabriella Borter, Dozens of doctors in Appalachia charged in opioid fraud bust. Reuters (April 17, 2019).

[FN14] . Nate Raymond and Jonathan Stempel, U.S. brings first criminal case against major drug distributor over opioids, Reuters (April 23, 2019).

[FN15] . Roberta Rampton, Trump says he is holding big Pharma accountable in opioid fight, Reuters (April 24, 2019).

[FN16] . Jonathan Landay, Trump accuses China's Xi of failing to halt fentanyl exports to U.S. Reuters (August 1, 2019).

[FN17] . U.S. government gives states nearly $2 bln to combat opioid crisis, Reuters (September 4, 2019).

[FN18] . U.S. charges 58 in Texas with healthcare fraud, illegal opioid distribution, Reuters (September 18, 2019).

[FN19] . Manojna Maddipatla, U.S. FDA issues warning letters to websites selling illegal opioids, Reuters (Sept. 30, 2019).

[FN20] . Federal prosecutors open criminal probe of opioid makers, distributors - WSJ, Reuters (Nov. 26, 2019).

-46- [FN21] . Nate Raymond, West Virginia cases picked for 2nd federal opioid trial, Reuters (Jan. 2, 2019).

[FN22] . Nate Raymond, Former Insys CEO pleads guilty to opioid kickback scheme, Reuters (January 9, 2019).

[FN23] . Nate Raymond, Connecticut judge tosses cities' lawsuits against opioid companies, Reuters (January 9, 2019).

[FN24] . Nate Raymond, Family behind Purdue Pharma pushed opioid marketing, Massachusetts says, Reuters (Jan. 15, 2019).

[FN25] . Nate Raymond, Insys founder, former execs face opioid kickback scheme trial, Reuters (Jan. 28, 2019).

[FN26] . Nate Raymond, Purdue loses bid to keep Massachusetts opioid complaint under wraps, Reuters (Jan. 28, 2019).

[FN27] . Pushkala Aripaka, Indivior braces for market share slide after U.S. court defeat, Reuters (Feb. 5, 2019).

[FN28] . Mike Spector, Jessica DiNapoli and Nate Raymond, Exclusive: OxyContin maker Purdue Pharma exploring bankruptcy - sources, Reuters (March 4, 2019).

[FN29] . Nate Raymond, OxyContin maker Purdue must face Vermont opioid lawsuit - judge, Reuters (March 21, 2019).

[FN30] . Nate Raymond, OxyContin maker Purdue agrees to settle Oklahoma opioid case - source, Reuters (March 26, 2019).

[FN31] . Nate Raymond, N.Y. accuses opioid maker Purdue of illegal fund transfers to Sacklers, Reuters (March 28, 2019).

[FN32] . Nate Raymond, Illinois sues Purdue over opioids; Arkansas lawsuit moves forward, Reuters (April 8, 2019).

[FN33] . Nate Raymond, Opioid distributor staffs compliance committee required by $20 million settlement, Reuters (May 7, 2019).

[FN34] . Jonathan Stempel, Five more U.S. states sue OxyContin maker Purdue Pharma over opioid epidemic, Reuters (May 16, 2019).

[FN35] . Jonathan Stempel, Insys to pay $225 million, plead guilty in U.S. over opioid kickbacks, Reuters (June 5, 2019).

[FN36] . Nate Raymond, Oklahoma judge approves Teva's $85 million opioid settlement, Reuters (June 24, 2019).

[FN37] . Nate Raymond, Local government lawyers to rework novel framework for opioid settlement talks, Reuters (June 25, 2019).

[FN38] . Nate Raymond and Mike Spector, Fate of opioid litigation hinges on government ‘police power’, Reuters (June 26, 2019).

[FN39]

-47- . Noor Zainab Hussain, Pushkala Aripaka and Nate Raymond, Reckitt to pay $1.4 billion to end U.S. opioid addiction treatment probes, Reuters (July 11, 2019).

[FN40] . Nate Raymond, Oklahoma makes final bid to hold J&J responsible for opioid epidemic, Reuters (July 31, 2019).

[FN41] . Nate Raymond, U.S. judge expresses support for novel opioid settlement talks framework, Reuters (August 6, 2019).

[FN42] . Ankur Banerjee, U.S. Drug distributors propose $10 bln to end state lawsuits over opioids - Bloomberg, Reuters (August 6, 2019).

[FN43] . Nate Raymond, Drug companies have duty to halt suspicious opioid orders - MDL judge, Reuters (August 19, 2019).

[FN44] . Nate Raymond, Drugmakers Endo, Allergan agree to $15 million in settlements in major opioid case, Reuters (August 20, 2019).

[FN45] . Nate Raymond, Oklahoma judge finds J&J liable in opioid epidemic, orders $572 mln damages, Reuters (August 26, 2019).

[FN46] . Jonathan Stempel, U.S. judge allows public nuisance claim in opioid trial, Reuters (September 9, 2019).

[FN47] . Brendan Pierson, U.S. judge approves novel framework for opioid settlement talks, Reuters (September 11, 2019).

[FN48] . Nate Raymond, Opioid plaintiffs fight bid to disqualify U.S. judge before trial, Reuters (September 16, 2019).

[FN49] . U.S. judge overseeing opioid litigation won't disqualify himself, Reuters (Sept. 26, 2019).

[FN50] . Shibham Kalia, Johnson & Johnson settles Ohio lawsuits to avoid federal trial, Reuters (Oct. 2, 2019).

[FN51] . Tom Hals, Cracks in Purdue's proposed opioid settlement as Arizona backs out, Reuters (Oct. 8, 2019).

[FN52] . Jonathan Stempel, U.S. judge overseeing opioid litigation won't be disqualified, Reuters (Oct. 10, 2019).

[FN53] . Nate Raymond, Ohio counties can't seek $800 million in ‘future’ opioid damages, Reuters (Oct. 14, 2019).

[FN54] . Kathy Gray, Drug companies avert landmark opioids trial as talks on $48 bln settlement set to resume, Reuters (Oct. 21, 2019).

[FN55] . Suzanne Barlyn, N.Y. insurance regulator notifies opioid makers, distributors of enforcement action: sources, Reuters (Nov. 13, 2019).

[FN56] . Nate Raymond, Opioid judge seeks to ‘accelerate’ resolution with case remands, Reuters (Nov. 20, 2019).

[FN57] . Tom Hals, Bankrupt Insys reaches deal to divvy cash among opioid victims, Reuters (Nov. 21, 2019).

[FN58]

-48- . Nate Raymond, U.S. Supreme Court rejects Arizona opioid case against Purdue, Sackler family, Reuters (Dec. 9, 2019).

Produced by Thomson Reuters Accelus Regulatory Intelligence 04-Feb-2020

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