Drug distributors in talks to settle opioid litigation for $18BPosted On: Oct. 16, 2019 11:37 AM CST
(Reuters) — Three drug distributors are in talks with state and local governments to settle thousands of opioid lawsuits for $18 billion, the Wall Street Journal reported on Tuesday, citing people familiar with the discussions.
McKesson Corp., AmerisourceBergen Corp. and Cardinal Health would collectively pay the amount over 18 years under the deal currently on the table, according to the Journal.
Shares of McKesson jumped about 9% in extended trading, while those of AmerisourceBergen rose 7% and Cardinal Health about 8% on prospects of ending what is expected to be a long and grueling legal battle related to a health crisis blamed for hundreds of thousands of deaths.
The three companies, which together control about 85% of the U.S. prescription drug market, are among six that are slated to be defendants in a landmark trial set to begin in federal court in Cleveland on Oct. 21. The trial will be presided over by U.S. District Judge Dan Polster, who has long pushed for a global settlement of the litigation.
The trial involves claims by two Ohio counties that the companies failed to halt and report suspicious orders of addictive painkillers. It is considered a bellwether case that would gauge broader exposure of the companies to litigation.
If the 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.
The trial is among more than 2,300 lawsuits in federal court and 2,600 total cases filed by state, local and tribal governments, hospitals and other entities, seeking to hold the drug industry responsible for the toll of opioid abuse.
Johnson & Johnson is also involved in the discussions to contribute additional money, the WSJ reported.
Later on Tuesday, Bloomberg reported that J&J had offered to pay $4 billion to settle claims related to the U.S. opioid epidemic.
Opioid addiction claimed roughly 400,000 lives in the United States from 1999 to 2017, according to the U.S. Centers for Disease Control and Prevention.
Earlier this month, J&J said it would pay $20.4 million to settle claims by the two Ohio counties, becoming the fourth drugmaker to settle claims ahead of the Federal Court trial. In a statement on Tuesday it said, "As previously stated, we remain open to viable options to resolve these cases, including through settlement."
Cardinal Health and AmerisourceBergen declined to comment, while the other companies did not immediately respond to Reuters' requests for comment.