- AmerisourceBergen, Cardinal Health, McKesson and Teva Pharmaceuticals have agreed to pay a combined $260 million to Cuyahoga and Summit counties in Ohio to settle a federal lawsuit alleging the companies encouraged overprescribing of opioid painkillers, The Wall Street Journal and other media reported today.
- The settlement came after the presiding judge invited the parties to a negotiating session starting on Friday. Walgreens Boots Alliance, another defendant in the case, has not agreed to a settlement.
- The Ohio case, the first to be tried in a U.S. federal court, is viewed as a bellwether for other pending cases across the country as municipalities seek to recoup the law enforcement, emergency response and health care costs resulting from opioid addiction and overdoses.
The companies have yet to formally acknowledge the settlement. The New York Times and Washington Post reported the presiding judge announced in the courtroom this morning that a deal had been struck overnight, and a formal announcement will come from the companies today.
According to available details, the settlement will involve $215 million immediately from the drug distributors, AmeriSource, Cardinal and McKesson, with Teva to pay $20 million over two years and provide $25 million in free addiction-fighting drugs, according to the reports, which cite the attorneys representing the counties.
Walgreens has not settled, but its trial has been delayed.
Teva was the last pharmaceutical manufacturer to remain subject to the lawsuit. Allergan, Endo International, Johnson & Johnson and Mallinckrodt had all settled in previous months. J&J's agreement was the most recent, with the New Jersey-based company paying $20.4 million to be excused from the courtroom.
The agreement potentially sets the stage for a larger, national deal with multiple states and municipalities that would relieve the courts of the burden of trying potentially hundreds of cases. That deal has been valued at as much as $50 billion.
In a Thursday note to clients, RBC Capital Markets analyst Randall Stanicky wrote that Teva could have $4.9 billion worth of liability in opiod-related lawsuits, the most of any company in the biopharma sector. All told, pharma manufacturers could have as much as $62 billion at stake, he wrote.