Distributors paying out millions for their part in opioid crisis

The three largest US drug distributors and a major generic-drug manufacturer have agreed to pay more than $250m (€225m) to settle the first federal trial over the companies’ role in fuelling the US opioid epidemic.

Distributors paying out millions for their part in opioid crisis

By Jef Feeley and Riley Griffin

The three largest US drug distributors and a major generic-drug manufacturer have agreed to pay more than $250m (€225m) to settle the first federal trial over the companies’ role in fuelling the US opioid epidemic.

Drug distributors McKesson, Cardinal Health, and Amerisource Bergen, plus drugmaker Teva Pharmaceutical, entered into the agreement with two Ohio counties just before the start of the trial in Cleveland, according to people familiar with the pact.

The agreement is likely to help buy more time for a wider industry settlement in other opioid cases. McKesson, Cardinal and Amerisource Bergen, which together control 90% of the US drug-distribution market, have proposed an $18bn settlement for more than 2,000 other lawsuits filed by states, counties and cities, according to people familiar with those negotiations.

No deal has been reached on that offer. The settlement is expected to be announced in court. Walgreens Boots Alliance, the last remaining defendant, hasn’t yet reached a deal so far, said the sources.

A separate trial, involving claims by West Virginia municipalities, is scheduled for next year. Shares of the companies fell in New York. McKesson dropped around 2%, Amerisource Bergen was down almost 3%, Cardinal lost 2.4% and Teva declined 1.5%, at one stage.

The sources said the settlement deal was reached after weekend-long talks in Cleveland. Other defendants in the case brought by the Ohio counties had already settled. Last week, drugmaker Johnson & Johnson agreed to settle the Cleveland case for $20.4m. J&J has offered $4bn to settle all the opioid lawsuits against it.

Last month, generic-opioid manufacturer Mallinckrodt settled for $30m. A unit of Endo International offered to pay $10m and donate $1m worth of drugs to avoid the trial, and Allergan agreed to pay $5m.

More than 400,000 Americans have died of opioid overdoses over two decades as US addiction rates surged, and communities have sued to recover expenses on more drug treatment and police services.

Drugmakers and distributors have been accused in thousands of lawsuits of turning a blind eye to red flags about unusually large opioid shipments and employing lax compliance standards to rake in billions in profits.

The case is In Re National Prescription Opioid Litigation, 17-md-2804, US District Court, Northern District of Ohio (Cleveland).

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