Four large drug companies reached a last-minute $260 million legal settlement over their role in the U.S. opioid addiction epidemic, averting the first federal trial that was scheduled to start Monday morning in Cleveland.
The tentative settlement came hours before opening statements were set to be delivered in the Cleveland case, viewed as a harbinger for legal claims filed by hundreds of local and state governments.
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Terms of a deal involving McKesson Corp., Cardinal Health Inc., AmerisourceBergen Corp. and Teva Pharmaceutical Industries Ltd. would be announced later in the day. Cuyahoga County lawyer Hunter Shkolnik says the settlement amounts to $260 million.
Distributor Henry Schein announced it had settled for $1.25 million, leaving only Walgreens in the case. A possible trial involving Walgreens was put on hold.
U.S. District Court Judge Dan Polster has encouraged a settlement, which would provide affected communities the funds to combat opioid addiction much sooner than the lengthy process of going through a trial and the likely appeals afterward.
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Lawyers stressed that the deal involved only the two counties and was not a “global resolution” to the nationwide litigation. Attempts at a broader settlement broke down last week when an offer of $48 billion in cash, treatment drugs and services was rejected as lawyers for the 2,400 cities and counties involved clashed with states attorneys general over the distribution of the settlement.
North Carolina Attorney General Josh Stein said Friday:
“We’re disappointed that the cities and counties refused to go along with that deal. This would have helped the entire nation, not just a few counties, not just a few cities.”
On Sunday, a committee guiding OxyContin maker Purdue Pharma’s bankruptcy had suggested drugmakers, distributors and pharmacy chains use Purdue’s bankruptcy proceedings to settle lawsuits. However, Paul Hanly, a lead lawyer for local governments in the lawsuits, had called that mass settlement idea “most unlikely.”
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The Ohio trial would be the first federal trial related to an opioid crisis that has claimed an estimated 400,000 American lives over two decades. Cuyahoga and Summit counties in Ohio are suing drug manufacturer Teva Pharmaceuticals, four distributors and the drug store chain Walgreens claiming their practices contributed to the devastating opioid epidemic.
Drugmakers have routinely denied wrongdoing, saying the drugs had survived intense Food and Drug Administration scrutiny and carry warning labels explaining the addictive risks of opioids.
