Title
Consider/Discuss/Act on a Resolution Authorizing the City of McKinney to Participate in the Proposed Opioids Settlement Agreements regarding the State of Texas’ and other Governmental Entities’ Litigation against Alvogen, Amneal, Apotex, Hikma, Indivior, Mylan, Sun, and Zydus for their Respective Roles in the National Opioid Crisis and Authorizing the City Manager to Execute Documents related Thereto
Summary
COUNCIL GOAL: Operational Excellence
MEETING DATE: August 19, 2025
DEPARTMENT: City Manager’s Office
CONTACT: Paul G. Grimes, City Manager
RECOMMENDED CITY COUNCIL ACTION: Staff recommends approval of a resolution authorizing the City Manager to execute on behalf of the City settlement documentation relative to the State of Texas’ and other governmental entities’ litigation against eight opioids manufacturers, Alvogen, Amneal, Apotex, Hikma, Indivior, Mylan, Sun, and Zydus (the “Manufacturers”) for the manufacturing, marketing, sale, and distribution of opioids.
ITEM SUMMARY: At the present time, the amount of funds to be received by the City is unknown.
BACKGROUND INFORMATION: Several years ago, the State of Texas, along with a broad coalition of states and political subdivisions from across the country, sued three (3) major opioid distributors - McKesson, Cardinal Health and Amerisource Bergen-along with an opioid manufacturer, Johnson & Johnson - for their role in the national opioid crisis. Those companies entered into a settlement agreement with the coalition of states and over governmental entities and upon the request and urging of the Office of the Texas Attorney General, most Texas local governments participated in the settlement.
Similarly, the State of Texas and other coalition members settled their cases against two pharmaceutical manufacturers, Teva and Allergan (“Manufacturers”), and three pharmacies, CVS, Walgreens, and Walmart (“Pharmacies”) relative to their respective roles in manufacturing, distributing, marketing, sale and dispensing of opioids, in the following amounts: Allergan-$135 million; CVS-$304 million; Walmart-$170 million; and Walgreens-$340 million. The State of Texas and other coalition members also settled opioid cases against Kroger to pay $83 million to Texas and its political subdivisions. The City has opted to participate in all of the foregoing identified settlements, with the funds required to be utilized for opioid remediation purposes.
By separate Agenda Item, the City Council is considering opting in to a settlement agreement with Purdue Pharma, L.P. and its Affiliated Debtors that requires Purdue to pay $286 million dollars to Texas and its political subdivisions over a 15-year period.
This Agenda Item relates to the City choosing whether to opt in to a final settlement the State of Texas has reached with the Manufacturers identified herein. Depending on participation by the settling states and subdivisions, the Settlements require:
• Alvogen to immediately pay up to approximately $19 million;
• Amneal to pay up to approximately $74 million over 10 years, and to provide either approximately $177 million of its generic version of the drug Narcan or up to an additional approximately $44 million in cash;
• Apotex to immediately pay up to approximately $65 million;
• Hikma to immediately pay up to approximately $98 million, and to provide either approximately $35 million of its naloxone product or up to an additional approximately $7 million in cash;
• Indivior to pay up to approximately $75 million over five years, a portion of which, at the election of the state, could be paid in the form of Indivior’s branded buprenorphine and/or nalmefene products with a value of up to $140 million.;
• Mylan to pay up to approximately $290 million over nine years;
• Sun to immediately pay up to approximately $32 million; and
• Zydus to immediately pay up to approximately $15 million.
The Office of the Attorney General strongly encourages Texas political subdivisions to participate in the settlement for the following reasons:
“First, the amounts to be paid under the Settlement, while insufficient to abate the epidemic fully, will contribute to allowing Texas and its local governments to commence with meaningful change designed to curb opioid addiction, overdose, and death, following on the Distributors and Johnson & Johnson/Janssen settlements from 2021, the Teva and Endo settlements from 2022, the Mallinckrodt bankruptcy settlement in 2023, the Allergan, CVS, Walmart, and Walgreens settlements from 2023, and the 2024 Kroger settlement;
Second, time is of the essence. The opioid epidemic continues to devastate communities around the country, and it is critical that the funds begin to flow to allow governments to address the epidemic in their communities as soon as possible; and
Third, you know first-hand the effects of the opioid epidemic on your community. Funds from this settlement will be used to commence abatement of the crisis and provide relief to your citizens while litigation and settlement discussions proceed against numerous other defendants in the opioid industry.”
Actual settlement amounts will be based upon the number of participating governmental entities, and proceeds will be spent on additional opioid remediation. The amounts to be allocated to the City of McKinney are determined by the “Texas Term Sheet” that the City has already agreed to and adopted for this purpose or the specific allocations identified in the various settlements if directly with the Manufacturers. The vast majority of the funds are earmarked for use by Texas and its subdivisions to remediate and abate the impacts of the opioid crisis. These Settlements also contain injunctive relief provisions governing the opioid marketing as well as the sale and dispensing practices at the heart of the opioid claims in the lawsuits.
FINANCIAL SUMMARY:
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BOARD OR COMMISSION RECOMMENDATION:
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