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Monday, March 30, 2020

Opioid settlement that derailed first federal trial could be a harbinger to a national deal

Federal Court

By Richard Jones | Oct 24, 2019


CLEVELAND (Legal Newsline) – Monday’s $260 million settlement between two Ohio counties and several of the nation’s largest drug companies over allegations of complicity in the ongoing opioid crisis just might have provided a road map for reaching a larger settlement of similar claims across the country. 

In fact, later that evening on Oct. 21, all four defendants further reached a framework on a so-called $48 billion global settlement with attorneys general from North Carolina, Pennsylvania, Tennessee and Texas that is crafted to eventually cover all outstanding claims in other jurisdictions, including those bought forward by Native American reservations.

Earlier in the day, the defendants reached a separate settlement with Ohio’s Cuyahoga and Summit counties. AmerisourceBergen, Cardinal Health, McKesson Corp. and Teva Pharmaceutical Industries will pay the counties $260 million over the next 18 months.  A fifth defendant, Walgreens, was not a party to the Ohio agreement and will litigate the claims against the corporation before U.S. District Court Judge Dan Polster of the Northern District of Ohio at a later date. 

Under the proposed global settlement, AmerisourceBergen, Cardinal Health, McKesson, and Teva Pharmaceutical Industries agreed to donate up to $26 billion worth of opioid-addiction treatment drugs and pay $22 billion in cash.

According to a release from the office of North Carolina Attorney General Josh Stein, the agreement specifically calls for the following: Cash payments from the defendants to include McKesson paying $6.86 billion over 18 years, Cardinal Health paying $5.56 billion over 18 years, AmerisourceBergen paying $5.58 billion over 18 years and Teva Pharmaceuticals $250 million over 10 years.  

Teva Pharmaceutical will donate $23 billion in generic suboxone product over 10 years. McKesson will provide $1.14 billion in product distribution and monitoring over 10 years. Cardinal Health is on the hook for $.93 billion in product distribution and monitoring over 10 years and AmerisourceBergen will provide $930 million in product distribution and monitoring over the same 10 years.

The agreement allows for each state and their local municipalities to receive a share of the $22 billion cash. The distribution of monies will be based on a formula that has yet to be finalized

In a statement, Teva Pharmaceuticals said it was pleased to have reached a settlement, but stressed the agreement was not an admission of liability.

“The company is pleased to positively contribute to solving the nationwide opioid epidemic," the company said in the state. "Teva has consistently committed to complying with all laws and regulations regarding its manufacture and sale of opioids.” 

AmerisourceBergen, Cardinal Health and McKesson issued their own joint statement also stressing that the settlement is not an admission of liability.

"While the companies strongly dispute the allegations made by the two counties, they believe settling the bellwether trial is an important stepping stone to achieving a global resolution and delivering meaningful relief," the statement said.

The proposed global agreement would include all local municipalities that have claims in the multidistrict litigation but not individual states. There is a second agreement using the same framework currently in negotiation that would revolve the state litigation.

Stein expressed his concerns on a conference call with the media Monday that a settlement needed to be reached now if there was any hope to steam the epidemic.

"The opioid epidemic has ripped through our communities and left a trail of death and destruction in its wake," Stein said. "This problem demands a national solution and I’m pleased with my colleagues to announce a proposed settlement that can help restore lives.”

Pennsylvania Attorney General Josh Shapiro laid the blame for the crisis at the feet of the drug companies but made it clear that without a deal there is no funding in place to deal with the problem.

"Today, like every day in the recent past, 12 Pennsylvanians will die each day due to this crisis," Shapiro said on the call. “I believe you can draw a straight line between the death of these Pennsylvanians and back to some of the decisions made in these pharmaceutical companies’ boardrooms. So we believe that pursuing a global settlement at this time is vital to getting resources to those in need in those Pennsylvania communities and across America.”

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Organizations in this Story

North Carolina Office of the Attorney GeneralPennsylvania Office of the Attorney GeneralU.S. District Court for the Northern District of Ohio Cleveland Division