CHARLESTON – An abatement expert says the total cost for such a plan for Cabell County and Huntington to deal with the opioid epidemic would be at least $2.5 billion.
On June 28, attorney Anthony Majestro, representing Cabell County, called George A. Barrett, an expert witness in the field of forensic economics. Barrett said he was asked to calculate the value of total cost of an abatement plan being composed by a group of epidemiologists. That cost would include abatement, inflation and interest to find the total cost.
Barrett said this calculation was like a lifecare plan and included specific items, unit cost – medical, social work and specifics to occupational wages – and the frequency of use. He also adjusted items for inflation.
Data collections is a collaborative effort, Barrett said. With inflation, Barrett said he did expect to see the same number used for the total 15-year calculation.
“To do so would be in opposition to the generally excepted concept that prices are the same from year to year,” Barrett said. “Generally, they get bigger, what we call inflation.”
In 2017, Cabell County and the City of Huntington sued the three largest pharmaceutical distribution companies – AmerisourceBergen, Cardinal Health and McKesson Corp. – claiming the companies were largely responsible for the opioid crisis after the companies shipped more than 81 million hydrocodone and oxycodone pills to the county of just 100,000 residents between 2006 and 2014.
Barrett testified that he used 11 different inflation rates for his calculations, often averaging a 30-year period to ensure accurate and smooth numbers. Barrett took wage increases from 1990-2020 to average wage increases for the plan.
“Generally accepted to use a 30-year data [set] to predict long-term future,” Barrett said. “Longer periods of time will allow you to flush out any outliers in the economy.”
Barrett’s wage estimates for the abatement plan are $1.3 million.
Attorney Jennifer Wicht, representing Cardinal Health, interrupted Barrett’s testimony to object Barrett relying on numbers from G. Caleb Alexander, an expert in pharmacoepidemiology, abatement and division – arguing Barrett can rely on numbers Alexander testified to, but not items not testified to.
Majestro argued that this was “exactly the kind of data an expert can rely on, especially in this field. I believe I have laid an adequate foundation from Mr. Barrett on the kind of data these experts rely on.”
Faber gave Majestro the go-ahead to continue the examination, with an appropriate ruling in the future. He also granted Wicht’s request of a standing objection throughout the testimony.
While explaining rent costs, Barrett said those who need transitional housing would have a higher price than those who do not due to accommodations needed to provide adequate housing.
“Transitional housing has special services in it that regular housing would not have,” Barrett said.
Barrett’s calculations for transitional housing, with inflation, is $8.7 million.
Barrett broke down each item’s cost, calculate inflation and came up with numbers for the next 15 years, all averaging between $149 million to $197 million.
The 15-year abatement plan cost including prevention, treatment, recovery and addressing needs of special population between 2021 and 2035 is a total of $2,544,446,548.
“Once we have a unit cost of the information, I am going to use inflationary data, inflationary trends to increase those costs to each year’s values,” Barrett said. “These are future numbers.”
Barrett said in these cases, interest rates are included due to accommodate lump sum awards. He used an average of annual rates based on the average of a six-month and 10-year maturity U.S. rate. The rate Barrett calculated was 3.73 percent.
Barret said this calculation started Sept 1, 2021, which is when he was told the payment would start. This also meant a prorated number for 2021.
Barrett testified that he did not second-guess Alexander’s redress model, nor did he consider costs of current spending, opioid-related programs by city and county, cost among defendants, apportions costs between prescription and illicit opioids, harms from the opioid epidemic and how to administer abatement plan spending because they were all the scope of his expertise.
Earlier in the day, U.S. District Judge David Faber started the day with his ruling on admitting the expert report numbers from Monday's testimony. Faber said he would sustain the defendant’s objection that the report is not evidence.
Attorney Linda Singer, representing the City of Huntington, continued with redirect of Alexander.
Through the redirect Singer clarified with Alexander who was at greater risk of future addiction.
Singer shared a piece of Alexander’s report from the cross-examination and included a follow-up sentence where Alexander said he used models developed from reviews, synthesis of additional assessments of interventions and included citations to come up with the number of a 50 percent reduction in substance abuse over a 15-year period.
Singer also asked Alexander about his knowledge of source funding. Alexander said while he does consider the funding source in his research, he does not throw out sources solely on funding.
Upon the dismissal of Alexander, attorney Ashley Hardin – representing Cardinal Health – asked to have Alexander’s testimony stricken from the record. Hardin said Alexander was engaging in an academic exercise that is not relevant to the question the court is to answer, did the defendant’s conduct cause a public nuisance and what is the appropriate remedy?
Hardin argued Alexander was trying to answer the remedy portion but failed to do so. She said he failed to connect the plan to the defendants and failed to do a needs assessment. Hardin also noted the defendants continues disagreement with abatement meaning “paying money to aid downstream harms.”
Faber said he would give it serious thought and rule later.
Huntington is represented by Anne Kearse, Joseph Rice, Linda Singer and David Ackerman of Motley Rice and Rusty Webb of Webb Law Centre. Cabell County is represented by Paul Farrell Jr. of Farrell Law, Anthony Majestro of Powell & Majestro and Michael Woelfel of Woelfel & Woelfel.
AmerisourceBergen is represented by Gretchen Callas of Jackson Kelly and Robert Nicholas and Shannon McClure of Reed Smith. Cardinal Health is represented by Enu Mainigi, F. Lane Heard III and Ashley Hardin of Williams & Connolly. McKesson is represented by Mark Lynch, Christian Pistilli, Laura Wu and Megan Crowley of Covington & Burling.
U.S. District Court for the Southern District of West Virginia case numbers 3:17-cv-01362 (Huntington) and 3:17-cv-01665 (Cabell)
