Kentucky Senate President Robert Stivers has called for an investigation into the state’s 2015 settlement with Purdue Pharma.
Eastern Kentuckians know Purdue Pharma, accepted responsibility for contributing too much of the Opioid crisis that has devastated thousands of families in our region. But recently the company filed for Bankruptcy protection, after making a multi-billion dollar settlement proposal with 12 states and thousands of cities suing the company.
Clearly, talk of that big settlement has brought renewed questions for Stivers and others about Kentucky’s $24 million settlement with the drug maker four years ago. As the “per capita” chart below shows, Kentucky, by settling with Purdue, seems to have gotten a much smaller amount per person than most of the “US group,” (dozens of states and thousands of cities which sued the company.) The chart shows that even Pike County, which sued Purdue independently, fared better than Kentucky overall.
The chart, supplied by Tim Robinson, an attorney and founder of Addiction Recovery Care, came from his research. “I remember thinking $24 million was an awfully low amount,” Robinson told me “Look at what Oklahoma got.”
Well before the beginning of this election year, Governor Matt Bevin and the Republican Party have been asking hard questions about the settlement. Even former democratic Attorney General Greg Stumbo, who first filed the case for Kentucky against Perdue, claimed it could be worth “a billion dollars.”
The Governor is running for re-election against the current attorney General Andy Beshear. Beshear approved the settlement, raising conflict-of–interest questions surrounding why he settled for such a low amount. Beshear, the governor’s office points out, worked for Stites & Harbison, the law firm representing Perdue Pharma against the state, before being elected Attorney General.
Republicans further charge that Jack Conway, who ran against Bevin in 2015, and was then Attorney General, settled too quickly. They suggest Conway was protecting Beshear from inheriting a potential conflict of interest. Before settling, Conway had said in court records the case was worth $100 million.
Bevin also asks why $4.2 million of the state’s settlement fund was paid to a law firm that former Jack Conway, later joined as a partner. Stumbo, not only the former AG, but also the democratic nominee for the AG job again in 2019, also lends credibility to an attack being levied by Bevin. According to the Courier-Journal, Stumbo, when talking about the Kentucky settlement said, “The optics don’t look very good.” He added, “And I think any fair-minded person would look at that and ask, “Why did that happen.” Stumbo also told the Louisville paper, “…there are questions that legitimately I think could flow out from those set of facts.”
Additionally, a former assistant attorney general, Lainie Kaiser, who worked on the Purdue Pharma suit, has given Bevin administration officials further reason to be suspicious about the settlement. In a sworn deposition, Kaiser, who is suing Beshear’s office for gender discrimination, said the case was settled because Conway’s staff was concerned about how it would be handled when Beshear took over as Attorney General. “There was some discussion of the case getting moved to the governor’s office should Jack Conway win, because he was running for Governor.” She said.
Conway claims politics played no role in his decision. He told the Courier-Journal, “I had no idea what Andy Beshear wanted or didn’t want, because I never had the first conversation with Andy about the settlement of this case.”
As for Beshear and his involvement, Sam Newton, a spokesman for his campaign, told the Courier-Journal in an email, “Andy had no role in the settlement and has said that many times.” He added, “Andy has been very aggressive against opioid companies.”
As for Stivers, he says he wants an investigation “regardless of who is Governor” when the legislature comes back into session.
Politics aside, perhaps a more pressing question is, what happens to Pike County, and all of Kentucky if the Bankruptcy caused Perdue Pharma funding to dry up? The attorneys have already gotten all their millions in fees from the settlement, but Perdue was paying Kentucky and Pike County over time. For Kentucky, that meant $1.1 million per year for several more years. The Governor’s chief of staff, Blake Brickman, points out that the bankruptcy filling now could potentially put those funds at risk. Clearly, this would negatively impact the treatment of those addicts the settlement funds were supposed to help.
Robinson, from the addiction center, says one way to gauge the potential impact is to look at how much treatment a million dollars will fund. “In one year, you could pay for over one thousand, five hundred medically assisted treatments (a doctor visit for addiction treatment followed up with a medicine like Vivatrol or Suboxone). Or, you could fund a 30 day residential treatment program for 150 people.” Robinson told the Mountain Advocate. Will the Perdue Pharma settlement funding disappear? Investigations and politics aside that issue directly impacts the fate of hundreds of Kentucky families who need help battling opioid addiction.