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The Legislature’s big opioids bill suddenly looks like it’s in serious trouble

In recent days, the legislation’s fee structure — especially how fees on opioid makers would sunset should the state win settlement against the companies  — have emerged as the main threat to the bill.

Eaton Rosen Olson Baker
Sen. Chris Eaton (DFL-Brooklyn Center), Sen. Julie Rosen (R-Vernon Center), Rep. Liz Olson (DFL-Duluth) and Rep. Dave Baker (R-Willmar) at a press conference earlier in the session announcing legislation aimed at tackling the opioid epidemic.
MinnPost photo by Peter Callaghan

Sen. Chris Eaton was confident when the 2019 session began that the Minnesota Legislature would finally adopt a response to the opioid crisis.

The plan was to pass a law imposing fees on the makers and distributors of the painkillers to pay for treatment, prevention and dealing with the fallout from opioid addiction. Doing something was a priority for both the DFL and the GOP, the legislation was even included on the list of “early wins” lawmakers thought could get done — items that would show voters that a divided legislature could agree on important issues.

Now, however, the Brooklyn Center DFLer is far less encouraged. In fact, Eaton, who has made addressing the opioid crisis one of her top legislative goals since her daughter Ariel died of an overdose in 2007, said this week she thinks the issue is likely to remain unresolved, a victim of the same partisan disagreement that is endangering passage of a state budget.

“This has never been an adversarial issue between parties, and it is now,” Eaton said Monday.

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Versions of an opioid bill passed both the House and Senate with similar fundamentals. New fees on the industry would raise $20 million a year for addiction services, prevention and addressing the collateral damage of addiction, such as the cost of caring for children of addicted parents.

It was first thought that the fees were the highest hurdle, prevented action on the issue in the state House in 2018. But in recent days, the details of the fee structure — especially how the fees on drug makers would sunset should the state win an expected settlement — have emerged as the main threat to scuttle the bill.

A House-Senate conference committee trying to work out differences in the legislation hasn’t met since last week. The regular session must end Monday.

Compromise offer ‘didn’t appear to be appreciated’

Committee co-chair Rep. Liz Olson, DFL-Duluth, said she feels that the House DFL made significant concessions in the conference committee. The House version of the bill did not include any language that would repeal the fees imposed on the industry if a lawsuit settlement is reached, and House DFLers voted down repeated attempts by minority GOP members to attach such a sunset to the bill. The latest Senate version, however, contains a provision where the fees would be reduced in five years or if state lawsuits bring cash settlements of at least $150 million.

In the conference committee, the DFL agreed to a sunset, which was “huge concession,” Olson said. That offer was to reduce the fees in 10 years or once settlement payouts equaled $700 million.  “We made significant moves toward the Senate because we do want to get a bill done this year,” Olson said.

Olson said there is a timeliness problem because settlement talks with drug makers are ongoing and could be completed by this year, even this summer. And based on settlements in other states, Minnesota could easily win $150 million, making all the work done on winning fees moot “almost immediately upon enactment,” she said.

“We don’t want that to happen,” Olson continued. “We haven’t even seen the high point of this crisis in our state. To sunset something before we have even reached the high point, when we have this opportunity to do something, seems like really poor management of what we need to do.”

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So last Friday, Eaton and Rep. Dave Baker, R-Willmar, both of whom are members of the conference committee, tried to broker a compromise with a proposal that fell between the current Senate and House positions. Under their provision, the fees would go away after five years once the account set up to pay for programs covered by the bill reached $300 million.

But Eaton said the offer wasn’t well received in the committee, which is co-chaired by Sen. Julie Rosen, R-Vernon Center and Olson. Both are well-placed members of the majority caucuses in their respective chambers, with Rosen as chair of the Senate Finance Committee and Olson as the third-highest-ranked member of House DFL leadership.

“Both were so angry and so stuck that I don’t see a path at this time unless they’ve calmed down over the weekend,” Eaton said. “Rep. Baker and I tried to show a path. We were doing this for our kids, that it didn’t need to be this way. It didn’t appear to be appreciated.”

Eaton said she turned over leadership on her bill to Rosen because of her interest in the issue and her position in the Senate majority. “She’s carrying my bill for me and she’s changed it a lot,” Eaton said of Rosen. “I knew once I talked her into carrying it for me that I lost control. But it was important enough for me to get it through; I was willing to try it. And up until the conference committee it was going pretty well.”

The high point for Eaton came on April 2, when the Senate passed its version of HF 400 on what would have been her daughter’s 35th birthday. The low point may have been Friday. Through a spokesman, Baker, who also lost a child — his son Dan — to the opioid crisis, said he didn’t want to talk about the bill or his proposal.

So is Eaton right to be discouraged?

“Ideally this isn’t the thing we do at the last part of session, but I remain hopeful that Sen. Rosen decides to act on this in the last few days,” Olson said.

Rosen wants the drug industry at the table

Rosen succeeded in winning passage of an opioids bill in the Senate last year only to see it fail to come to a vote in the House. This year, it is one of just two proposed increases in fees passed by Senate Republicans: it would raise licensing fees on opioid makers and distributors from $235 a year to tens of thousands of dollars, depending on their share of the market.

“We’ve been working on this for a very long time,” said Rosen, R-Vernon Center. “We’re a compassionate caucus. We understand there needs to be some responsibility and everyone agreed they all need to come to the table and what they’re paying right now is ridiculous.”

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But Rosen said her version of the sunset is more likely to get support from the drug industry and she wants them to be at the table seeking solutions to the crisis. “It’s reasonable, it’s fair, it’s what other states are looking at. We’re setting the bar for other states,” she said.

Normally, chairs alternate control of meetings and must call a meeting within 24 hours or surrender the gavel to their counterpart from the other chamber. But Rosen and Olson agreed to a less-formal relationship, alternating the gavel only after each meeting. Rosen currently has the gavel, no meetings have been set, and none will be until she decides to convene one. As chair of the Finance Committee, Rosen is involved in closed-door budget talks with House DFL leaders and Gov. Tim Walz.

“I think it was a mistake on Liz’s part to agree to that,” Eaton said of Rep. Olson. “I raised a little hell through text messages that they weren’t following the rule and they both said they made the agreement and they’re gonna stick with it.”

AG office suing drug makers

The legislation is being debated as the Minnesota attorney general’s office is pursuing three major lawsuits against the opioids industry. Minnesota v. Purdue Pharma alleges violations of a handful of state laws including consumer fraud, deceptive trade practices, false advertising, unlawful trade practices, deception of senior citizens and disabled persons and public nuisance.

According to a summary by the attorney general, the suit “seeks injunctive relief, damages, monetary relief (which could include restitution for harmed individuals and entities…), disgorgement of profits, civil penalties and supplemental civil penalties, abatement of public nuisance, treble damages, and the State’s costs, including attorney fees and expert costs.”

A second suit, State of Minnesota & Minnesota Board of Pharmacy v. Insys Therapeutics, alleges deceptive trade practices, consumer fraud and gift ban violations. In that suit, the state seeks injunctive relief and its costs, including attorney fees and expert costs.

A third suit, Minnesota Board of Pharmacy v. Insys Therapeutics, Inc., alleges gift ban violations, misbranding of a drug, violation of wholesale drug distributor laws, illegal fee splitting and providing false or misleading statements. According to the attorney general’s office, the state is conducting other confidential investigations of companies that manufacture opioids that have not been publicly disclosed.

Attorney General Keith Ellison
MinnPost photo by Peter Callaghan
Attorney General Keith Ellison
The first two actions are before the Fourth Judicial District Court of Minnesota. The third is an administrative action before the state Office of Administrative Hearings. The state is also part of national litigation led by other states that is being litigated in Ohio.

The largest settlement potential comes in the action against Purdue, the maker of Oxycontin. The company is being sued by many other states and has begun settling some of those suits, namely Oklahoma’s suit in March for $270 million.

In testimony before the conference committee, Attorney General Keith Ellison said he is limited in what he can say about the federal court cases due to a gag order issued by the judge in the Ohio litigation. Current state law, however, requires that the proceeds from any litigation brought by the state must be deposited in the state general fund.

Ellison said the law allows “distribution of money to the specific injured person or entities on whose behalf the litigation or settlement efforts were initiated” but does not require such distributions.

“Without legislation such as the proposal in front of you, there is no mechanism for any proceeds from litigation or settlement of the opioid lawsuits to go directly toward addressing, alleviating, and ending the opioid crisis and the harm it has caused everywhere in Minnesota and the United States,” Ellison told the conference committee.

“I believe that any proceeds the state wins from opioid manufacturers should go towards compensating the victims, their families, and the communities harmed by the devastation that opioid addiction and abuse has caused,” he said. “This can include treatment, prevention, intervention, and services to the affected families and communities.”

“We have in front of us a once-in-a-generation opportunity to dramatically improve the health of Minnesotans in every community and corner of our state. I urge you to seize it,” Ellison said.

CORRECTION: This story was changed to show that the fees on the opioid industry would be cut back after five years in the latest Senate proposal or sooner if settlement proceeds reach $150 million. The story had previously stated that the fees would be eliminated five years after the opioids account received at least $150 million.