TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
PREPARED BY: Javier Carcamo, Finance Director
SUBJECT:
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Authorization to Participate in National Opioid Litigation Settlements
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RECOMMENDATION
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Adopt Resolution No. 25-4886 entitled: A Resolution of the City Council of the City of Murrieta, California, Authorizing the City's Participation in the National Opioid Litigation Settlement Agreements with Alvogen, Amneal, Apotex, Hikma, Indivior, Mylan, Sun, and Zydus;
Adopt Resolution No. 25-4887 entitled: A Resolution of the City Council of the City of Murrieta, California, Authorizing the City's Participation in the National Opioid Litigation Settlement Agreements with Purdue Pharma L.P. and Sackler Family; and
Authorize the City Manager to take all actions necessary to implement the settlement agreements.
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PRIOR ACTION/VOTE
On December 21, 2021, the City Council adopted Resolution No. 21-4511, authorizing the City of Murrieta to enter into settlement agreements with McKesson Corporation, Cardinal Health, Inc., AmerisourceBergen Corporation, Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutical, Inc.; Agreeing to the terms of the Memorandum of Understanding (MOU) Allocating settlement proceeds; authorizing entry into the MOU with the attorney general; and electing to take direct distribution of its local allocation share. (Vote 5-0).
On July 2, 2024, the City Council adopted Resolution No. 24-4769, Authorizing the City's participation in the National Opioid Litigation Settlement Agreements with Kroger Co; any other future National Opioid Settlements; and authorizing the City Manager to take all actions necessary to implement the settlement Agreements (Vote 5-0).
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
DISCUSSION
In 2021, nationwide settlements were reached to resolve all Opioid litigations brought by states and local governments against the largest pharmaceutical distributors: McKesson, Cardinal Health, AmerisourceBergen, and manufacturer Janssen Pharmaceuticals, Inc. and its parent company Johnson & Johnson (collectively, "J&J"), Teva, Allergan, CVS, Walgreens, Walmart, and Kroger Co. These settlements will provide substantial funds to states and local governments for abatement of the Opioids epidemic across the country.
On December 21, 2021, the City Council authorized settlement agreements with McKesson Corporation, Cardinal Health, Inc., AmerisourceBergen Corporation, Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutical, Inc., and elected to take direct distribution of settlement payments.
On July 2, 2024, the City Council authorized settlement agreements with Kroger Co., which reached a national opioid settlement with thirty-three (33) states and participating political subdivisions totaling $1.2 billion, which will be paid out over 11 years.
Alvogen, Amneal, Apotex, Hikma, Indivior, Mylan, Sun, and Zydus Settlement
A new national opioid settlement has been reached with Alvogen, Amneal, Apotex, Hikma, Indivior, Mylan, Sun, and Zydus. The settlements will provide up to approximately $720 million in cash to participating states and subdivisions for the remediation and abatement of the opioid crisis.
The State of California has elected to participate in this settlement, which allows the City of Murrieta to also participate directly. The allocation of settlement funds to the State and subdivisions is not yet known, as final amounts will depend on the number of participating governmental entities. Proceeds will be restricted to opioid remediation efforts. To participate, the City of Murrieta must execute the Subdivision Participation and Release Form by October 8, 2025.
Purdue/Sackler Settlement
A new national opioid settlement has been reached with Purdue Pharma L.P. (and certain affiliates) and the Sackler family regarding alleged misconduct related to opioids. The settlement provides for an aggregate of $6.5 billion to be paid in 16 installments over 15 years.
The State of California has elected to participate in this settlement, which allows the City of Murrieta to also participate directly. The allocation of settlement funds to the State and subdivisions is not yet determined, as final amounts will depend on the number of participating governmental entities. Proceeds will be restricted to opioid remediation efforts. To participate, the City of Murrieta must execute the Subdivision Participation and Release Form by September 30, 2025.
The settlement payments will provide state and local governments with flexibility to fund a wide range of opioid abatement initiatives. Developed in consultation with leading public health experts, the list of pre-approved uses includes intervention, treatment, education, and recovery services. This approach allows each jurisdiction to determine the strategies and programs that will best serve its community.
FISCAL IMPACT
There is no immediate fiscal impact associated with participating in these two national opioid settlements. Upon receipt of settlement payments, staff will amend the Operating Budget as part of a future quarterly budget update to establish the corresponding revenue and expenditure appropriations.
ATTACHMENTS
1. Resolution No. 25-4886
2. Resolution No. 25-4887