Drug Distributors in Talks to Settle Opioid Litigation for $18 Billion
16 October 2019 - 8:04AM
Dow Jones News
By Sara Randazzo
Three major drug distributors are in talks to pay $18 billion to
settle sweeping litigation brought by state and local governments
blaming them for fueling the opioid crisis, people familiar with
the discussions said, potentially marking a broad resolution to
lawsuits that have shaken the pharmaceutical industry.
The three distributors -- McKesson Corp., AmerisourceBergen
Corp., and Cardinal Health Inc. -- would collectively pay $18
billion over 18 years under the deal currently on the table, the
people said. Johnson & Johnson is also involved in the
discussions to contribute additional money, some of the people
said.
Players up and down the pharmaceutical supply chain, including
drugmakers, distributors and pharmacies, have been sued by
virtually every state and thousands of city and county governments.
Over 2,000 lawsuits allege the industry's overly aggressive
marketing of prescription painkillers and lax oversight over drug
distribution contributed to widespread opioid addiction.
At least 400,000 people have died in the U.S. from overdoses of
legal and illegal opioids since 1999, according to federal data.
The lawsuits are seeking to recoup the costs borne by communities
grappling with widespread addiction, including burdens on emergency
services, medical care and foster services for children born to
addicted parents.
Pressure has mounted on pharmaceutical companies to settle the
opioid lawsuits and cap the liability. McKesson, AmerisourceBergen
and Cardinal Health are among companies slated to go to trial
Monday in federal court in Cleveland in the cases of two Ohio
counties that have been chosen to serve as a bellwether for the
broader litigation.
Any final deal could include other companies. The talks have
raised the idea that the settlement would include the donation of
opioid-addiction treatment drugs.
If finalized, the settlement would be the first to achieve a
broad resolution of the opioid lawsuits outside of bankruptcy.
OxyContin maker Purdue Pharma LP filed for bankruptcy last month to
try to implement a settlement valued at around $10 billion to $12
billion but faces opposition from some states who say its owners,
the Sackler family, should contribute more to the deal.
Johnson & Johnson on Tuesday reiterated a prior statement
that "we remain open to viable options to resolve these cases,
including through settlement."
A spokeswoman for Cardinal declined to comment.
AmerisourceBergen had no immediate comment, and McKesson didn't
respond to requests for comment.
The agreement still needs to garner support from factions of
plaintiffs' lawyers and government entities with differing
interests. A bipartisan coalition of the attorneys general in
Texas, Tennessee, Pennsylvania and North Carolina have been leading
the discussions that generated the current proposal, the people
said. State attorneys general are scheduled to have a call Tuesday
evening to hear more about the deal.
Write to Sara Randazzo at sara.randazzo@wsj.com
(END) Dow Jones Newswires
October 15, 2019 16:49 ET (20:49 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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