Drug Giants Close In on a $50 Billion Settlement of Opioid Cases

Marco Green
October 18, 2019

The first trial for the cases is scheduled to begin opening statements Monday.

The sources cautioned that there was no guarantee a deal would be struck.

The chief executives of the three largest United States drug distributors and a drugmaker have been summoned to appear before a federal judge to discuss a proposal to resolve thousands of lawsuits alleging they fueled the U.S. opioid crisis, a person familiar with the matter said on Thursday.

Lawyers for the plaintiffs in the trial starting Monday have said that the distributors conspired through their trade organization to flout the federal law, which obliged them to monitor sales and report outliers.

Distributors McKesson Corp, AmerisourceBergen Corp and Cardinal Health have offered to pay US$18 billion in cash over 18 years, while drugmaker Johnson & Johnson would pay US$4 billion in cash, two people familiar with the matter told Reuters.

An additional $14 billion would come from distribution of those drugs, based on calculations of how much a distributor could charge for them, according to people with knowledge of the deal who were not authorized to disclose information and spoke on the condition of anonymity.

Also on Tuesday, Bloomberg reported that J&J had offered to pay $4bn in talks with state attorney generals to settle claims related to the U.S. opioid epidemic.

The New York Times first reported news of a almost $50 billion settlement.

Those lawyers filed the first opioid lawsuits in 2014 and have since conducted hundreds of depositions and compiled many millions of documents. But the pressure of a more limited federal trial is a key in the push toward striking a deal.

Two Ohio counties claim drug companies that made, distributed and sold prescription painkillers engaged in a deadly conspiracy that has inflicted massive damage on their communities and created a costly public nuisance.

Johnson & Johnson recently settled with the two OH counties for about $20.4 million, but the company is named in numerous other suits, as well. It's expected to take up to three days for attorneys for Summit and Cuyahoga counties and six drug companies to select a 12-person jury.

This proposed deal is considerably larger than the tentative settlement negotiated by Purdue Pharma earlier this fall, not least because it involves five large companies instead of one.

If the three companies reach a settlement before the trial starts, the remaining defendants would be Teva Pharmaceutical Industries Ltd, Walgreens Boots Alliance Inc and Henry Schein Inc.

According to an analysis of federal data by The Washington Post, some rural areas received 200 to 300 opioid pills per person per year.

Counting prescription drugs and illegal ones such as heroin and illicitly made fentanyl, opioids have been blamed for more than 400,000 deaths in the US since 2000.

Other reports by Click Lancashire

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