Oct 21, 2019

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

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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Teva's stock shines after agreeing to opioid settlements

Data: Investing.com; Chart: Axios Visuals

Three of the four defendants agreeing to pay $260 million to settle opioid litigation with two Ohio counties have seen their stock prices plummet, as the settlement leaves 2,700 more local governments still suing over the distributors' roles in the addiction crisis.

Why it matters: The deal could serve as a template that would put the companies on the hook for $47 billion in damages to all 2,700 counties serving as plaintiffs in the lawsuits, depending on what happens in individual representative "bellwether trials" that will shape negotiations.

Go deeperArrowOct 22, 2019

The opioids legal battles rage on

Illustration: Lazaro Gamio/Axios

The federal opioids litigation took a step closer to resolution yesterday when major drug companies settled with 2 Ohio counties just before a trial was scheduled to begin.

Yes, but: States, municipalities and the companies being sued are still hashing out a global resolution to the thousands of lawsuits pending across the country.

Go deeperArrowOct 22, 2019

Cardinal Health sets aside $5.6 billion for opioid lawsuits

Photo: Igor Golovniov/SOPA Images/LightRocket via Getty Images

Drug distributor Cardinal Health registered a $5.6 billion pre-tax charge in the third quarter, saying the company "agreed in principle to a global settlement" with states, cities and others to pay that amount over 18 years to resolve the opioid cases.

Why it matters: Cardinal is the first company to set aside billions of dollars in preparation for any national opioids settlement, even though a definitive settlement agreement has not been finalized.