| | | | | | | |  | Item #9.
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| | | | | | | | | TO: |
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| Mayor and City Council |
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| Eric Holmes, City Manager |
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| | DATE: |
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| 7/15/2024 |
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| SUBJECT
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| Approval of Participation Agreement for State of Washington Opioid Settlement with Kroger Co.
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| | | | | | | | Key Points
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- On Council authority in 2019, the City initiated litigation in 2019 against numerous manufacturers, distributors, and retailers of opioids
- On April 23, 2024, the State of Washington joined a March 22, 2024, nationwide settlement with Kroger Co. that is contingent upon every litigating government entity in Washington joining the agreement.
- The State’s settlement with Kroger Co. is for $47.5 million, of which local governments receive 50% less costs and attorneys’ fees.
- By joining the Agreement, the City of Vancouver would receive approximately $400,000 to be paid over 11 years.
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| | | | | | | | | Strategic Plan Alignment | Housing and Human Needs – meeting basic needs and partnering with organizations to support the community.
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| | | | | | | | | Present Situation | Since 2015, state and local governments around the Country have been united in efforts seeking to hold the manufacturers, distributors, and pharmacies of opioids responsible for the harms caused to their residents. The City of Vancouver joined this fight in 2019, filing suit against a number of manufacturers, distributors and pharmacies. That lawsuit was then transferred to the Northern District of Ohio as part of a nationwide multi-district litigation. The lawsuit has been pending there ever since. The City has already joined settlements with multiple opioid distributors (AmerisourceBergen Corporation, Cardinal Health, Inc., and McKesson Corporation) retailers (Teva, Allergan, CVS, Walgreens, and Walmart), and most recently, Johnson & Johnson/Janssen.
The Council approved a memorandum of understanding in April 2022 (“One Washington MOU”), that delineates the amount the City of Vancouver would receive if any statewide settlement was reached (1.7306605325% of amounts allocated to local governments) and limits the categories for which opioid funds may be expended. In March 2024 the City entered into an interlocal agreement with Camas and Washougal to fulfill its obligations under this MOU so that any expenditure of opioid funds is as transparent as possible to the public. The City of Battle Ground has since joined this interlocal agreement.
On March 22, 2024, Kroger Co. (which operates QFC and Fred Meyer within the State of Washington), a pharmaceutical retailer, entered into a $1.2 billion nationwide settlement. The State of Washington announced on April 23, 2024, that it joined this settlement for an allocation of $47.5 million to be split between the State and local governments, contingent upon eligible cities and counties joining the settlement. On June 28, 2024, the Attorney General’s Office provided all litigating local governments (of which Vancouver is one) with a proposed Allocation Agreement. To join the settlement, Vancouver would need to execute the Allocation Agreement and Participation Form. Joining the settlement would bind Vancouver to the terms of the settlement, which is receiving its share of the payout over the next 11 years. Per the Allocation Agreement and One Washington MOU, Vancouver’s share would be approximately $400,000 paid out over that time frame.
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| | | | | | | | | Advantage(s) | By approving this agreement, the City will receive funds that may be used to address the community impacts of the opioid epidemic in Vancouver, which range from substance addition to mental health to homelessness.
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| | | | | | | | | Disadvantage(s) | Forecloses (possibly) a greater share of recovery vis-a-vis other Washington local governments, but the City would have to litigate for that result if it was desired. In addition, refusing to join the settlement would nullify the settlement for the State and all other Washington local governments.
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| | | | | | | | | Budget Impact | The City would receive annual payments which would be allocated in a supplemental budget to be used for purposes authorized by the April 2022 One Washington MOU.
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| | | | | | | | Prior Council Review
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- Council authorized litigation against the opioid manufacturers, distributors, and retailers in 2019.
- Council authorized the One Washington MOU on April 4, 2022.
- Council authorized the City to join a national settlement with distributors on September 12, 2022.
- Council authorized the City to join a national settlement with other retailers on March 6, 2023.
- Council authorized an interlocal agreement with Camas and Washougal to create an Opioid Abatement Council to monitor receipt and expenditure of opioid funds on March 25, 2024.
- Council authorized the City to join a statewide settlement with Johnson & Johnson/Janssen on April 22, 2024
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| | | | | | | | | Action Requested | Authorize the City Manager, City Attorney, and/or designee to execute the attached Settlement Participation Form and attached Allocation Agreement to join the settlement with Kroger Co.
Dan Lloyd, Assistant City Attorney, (360) 487-8500
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