Four large drug companies have reached a last-minute settlement with two Ohio counties to avoid trials blaming them for their part in fueling the ongoing opioid crisis, according to the Wall Street Journal. A fifth defendant, Walgreens Boots Alliance (WBA), has yet to agree to a deal.
A Cleveland federal judge dismissed opioid-damage claims against McKesson Corp. , Cardinal Health Inc., AmerisourceBergen Corp. and Teva Pharmaceutical Industries Ltd. - who agreed to pay more than $250 million to settle their first federal trial related to opioids according to Bloomberg. It is unclear whether trial will proceed against just WBA.
While the deal with the Ohio counties will avoid a federal jury trial with the two counties, it falls far short of a more sweeping deal currently under negotiation to resolve thousands of opioid lawsuits across the country.
The cases of Ohio’s Cuyahoga and Summit counties had been selected to go to trial first from more than 2,300 opioid lawsuits brought in federal court by local municipalities, hospitals, Native American tribes and others that are consolidated before U.S. District Judge Dan Polster in Cleveland.
The lawsuits broadly allege the pharmaceutical industry pushed opioid painkillers for widespread use without adequately warning of the risks of addiction and allowed high volumes of pills to flood into communities.
The Ohio cases will likely serve as a benchmark for how the more comprehensive opioid litigation may be resolved, as virtually every state - and thousands of local governments, have sought to recover money from pharmaceutical companies involved in the manufacture, marketing and distribution of opioids.
Over 400,000 people in the US have died from overdoses of opioids - both legal and illegal, since 1999 according to the report.
In August, McKesson, Cardinal and Amerisource Bergen verbally proposed a $10 billion national settlement according to Bloomberg. Responding to the offer, the National Association of Attorneys General countered with a demand for $45 billion paid over decades to cover the costs of the public health crisis brought on by opioid abuse, addiction and overdoses.
In July, UK-based drugmaker Reckitt Benckiser Group (RB Group) paid the US government a record $1.4 billion to end criminal and civil probes into allegations of illegal marketing of opioid addiction treatment medication, according to the US Justice Department.
According to Nephron Research analysts, a global settlement covering all opioid manufacturers could cost between $30 billion and $55 billion, while Wells Fargo analyst David Morris said it could reach $100 billion.
The Ohio cases would have provided a rare insight into how drug distributors contributed to the crisis, as documents and witnesses would be under a public microscope. According to the Journal, the companies are middlemen who fulfill drug orders placed by hospitals, pharmacies and others.
An earlier opioid-crisis trial, in Oklahoma, had only drugmaker Johnson & Johnson as a defendant, limiting the scope of the narrative unspooled in court.
McKesson, Cardinal and AmerisourceBergen collectively controlled 95% of the U.S. drug distribution market in 2018, according to Drug Channels Institute, which provides research on the drug-supply chain. The three companies are among the largest in the U.S., all ranking in the top 25 of the Fortune 500.
The distributors have argued that their role is to ensure medicines prescribed by licensed doctors are delivered to patients who need them. They say they must balance their mission to deliver medicine against efforts to prevent and detect illegal diversion of those drugs.
Walgreens, widely known as a pharmacy, has been included in the trial for its role as a drug distributor to its own stores.
Israel-based Teva and its subsidiaries make generic opioid painkillers and two branded drugs used for cancer pain. The company has argued that it doesn’t market its generic opioids. -Wall Street Journal
According to some accounts, the comprehensive deal between the industry and a coalition of state attorneys could be worth as much as $48 billion - a number which has been rejected by lawyers for cities and counties. It includes $18 billion to be paid over 18 years by AmerisourceBergen, Cardinal and McKesson; $4 billion from Johnson & Johnson over a shorter time frame; and the donation of drugs from Teva and distribution services valued at as high as $28 billion according to the report.