Oct 21, 2019 - Health

Major drug companies reach $260 million settlement in federal opioid trial

A man in front of the McKesson headquarters in San Francisco

Photo by Justin Sullivan/Getty Images

Drug distributors McKesson Corp., Cardinal Health Inc., AmerisourceBergen Corp. and Teva Pharmaceutical Industries, an Israeli-based manufacturer of generic drugs, reached a $260 million settlement on Monday to avoid the first federal opioid trial that was set to begin in Cleveland, the Wall Street Journal reports.

Why it matters: People familiar with the discussions told the New York Times that a broader settlement to resolve thousands of cases brought by local governments and states could be announced later in the day.

The settlement: McKesson, Cardinal Health and AmerisourceBergen, agreed to pay Ohio’s Cuyahoga and Summit counties $215 million.

  • Teva will pay the counties $20 million over the next two years and donate $25 million worth of addiction-treatment drugs.
  • The case's fifth defendant, Walgreens Boots Alliance, was not a part of the settlement, and U.S. District Judge Dan Polster postponed its trial.

Context: Almost every state and thousands of local governments have sued pharmaceutical companies for damages caused by the opioid crisis. In total, more than 2,300 opioid lawsuits have been brought in federal court by plaintiffs ranging from local municipalities to Native American tribes.

By the numbers: The WSJ reports that overdoses of legal and illegal opioids have killed at least 400,000 people since 1999.

  • Collectively, McKesson, Cardinal and AmerisourceBergen controlled 95% of the U.S. drug distribution market in 2018 and were among the largest corporations in the country.
  • A coalition of state attorneys general has pushed for a settlement with five drug companies that could be worth as much as $48 billion.

Walgreens was included in the trial for its role as a drug distributor to its own stores, and Teva was included because it produces generic opioid painkillers.

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