Drug Distributors in Talks to Settle Opioid Litigation for $18 Billion

By Sara Randazzo 

Three major drug distributors are in talks to pay $18 billion to settle sweeping litigation brought by state and local governments blaming them for fueling the opioid crisis, people familiar with the discussions said, potentially marking a broad resolution to lawsuits that have shaken the pharmaceutical industry.

The three distributors -- McKesson Corp., AmerisourceBergen Corp., and Cardinal Health Inc. -- would collectively pay $18 billion over 18 years under the deal currently on the table, the people said. Johnson & Johnson is also involved in the discussions to contribute additional money, some of the people said.

Players up and down the pharmaceutical supply chain, including drugmakers, distributors and pharmacies, have been sued by virtually every state and thousands of city and county governments. Over 2,000 lawsuits allege the industry's overly aggressive marketing of prescription painkillers and lax oversight over drug distribution contributed to widespread opioid addiction.

At least 400,000 people have died in the U.S. from overdoses of legal and illegal opioids since 1999, according to federal data. The lawsuits are seeking to recoup the costs borne by communities grappling with widespread addiction, including burdens on emergency services, medical care and foster services for children born to addicted parents.

Pressure has mounted on pharmaceutical companies to settle the opioid lawsuits and cap the liability. McKesson, AmerisourceBergen and Cardinal Health are among companies slated to go to trial Monday in federal court in Cleveland in the cases of two Ohio counties that have been chosen to serve as a bellwether for the broader litigation.

Any final deal could include other companies. The talks have raised the idea that the settlement would include the donation of opioid-addiction treatment drugs.

If finalized, the settlement would be the first to achieve a broad resolution of the opioid lawsuits outside of bankruptcy. OxyContin maker Purdue Pharma LP filed for bankruptcy last month to try to implement a settlement valued at around $10 billion to $12 billion but faces opposition from some states who say its owners, the Sackler family, should contribute more to the deal.

Johnson & Johnson on Tuesday reiterated a prior statement that "we remain open to viable options to resolve these cases, including through settlement."

A spokeswoman for Cardinal declined to comment. AmerisourceBergen had no immediate comment, and McKesson didn't respond to requests for comment.

The agreement still needs to garner support from factions of plaintiffs' lawyers and government entities with differing interests. A bipartisan coalition of the attorneys general in Texas, Tennessee, Pennsylvania and North Carolina have been leading the discussions that generated the current proposal, the people said. State attorneys general are scheduled to have a call Tuesday evening to hear more about the deal.

Write to Sara Randazzo at [e-mail]

(END) Dow Jones Newswires

October 15, 2019 16:49 ET (20:49 GMT)

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