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U.S. states reject $18 billion proposal to settle opioid lawsuits, discussions ongoing: sources

[February 15, 2020] By Tom Hals and Diane Bartz

(Reuters) - Twenty one states have rejected an $18 billion settlement proposal from three major U.S. drug distributors to resolve lawsuits over their alleged role in the opioid crisis, but discussion are still active, according to three sources familiar with the matter.

More than 2,500 lawsuits have been brought nationwide by states, local and tribal governments over the toll the opioid crisis has taken on their communities.

The Wall Street Journal reported on Friday that the states objected to a settlement offer sent to the companies' law firms earlier this week, and were pushing for a larger payment.

"We're far along in the process of talks and still negotiating," said Sarah Lovenheim, spokeswoman for California Attorney General Xavier Becerra. "For anyone to suggest otherwise would be inaccurate."

Sources with three other state attorneys general told Reuters the parties are in active discussions, adding the proposal is not dead but requires wider support.

The states want the companies - AmerisourceBergen Corp, McKesson Corp and Cardinal Health Inc - to pay between $22 billion and $32 billion, the WSJ reported https://on.wsj.com/37kSRkA, citing a person familiar with a matter.

States also want the money faster than the companies' proposal, which was for $18 billion over 18 years, one of the sources told Reuters. The state attorneys general believe distributors can pay more than $18 billion dollars over a shorter period of time, the person said.

Some 400,000 U.S. overdose deaths between 1997 and 2017 were linked to opioids, according to government data.

The lawsuits accuse drugmakers of deceptively marketing opioids in ways that downplayed their risks, and drug distributors of failing to detect and halt suspicious orders. The companies have denied any wrongdoing.

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Shares of the three distributors, which together handle about 85% of the U.S. prescription drug market, were down less than 1%.

The $18 billion proposal would only settle allegations with the distributors and does not includes claims against pharmacies like Walgreens Boots Alliance Inc and drugmakers including Teva Pharmaceutical Industries.

A trial is scheduled to begin on March 20 in which the state of New York and the counties of Suffolk and Nassau are suing drug distributors, drugmakers such as Johnson & Johnson and pharmacy chains including CVS Health Corp.

The $18 billion settlement was proposed on the eve of the last major opioid trial in Cleveland in October. The New York trial date could help push the parties to a deal.

McKesson said it is focused on finalizing a global settlement that would provide billions of dollars in immediate funding and relief to states and local communities, a company spokesman said in an emailed statement.

"We are committed to being part of the solution, but are also prepared to defend ourselves vigorously if the litigation progresses," he added.

A Cardinal Health spokesperson said the company continues to work toward a nationwide settlement.

AmerisourceBergen did not immediately respond to a request for comment.

The rejection letter was signed by attorneys general for 21 states as well as Puerto Rico and the District of Columbia, according to the WSJ report.

(Reporting by Tom Hals in Delaware, Diane Bartz in Washington and Saumya Sibi Joseph in Bengaluru; Writing by Michael Erman in New York; Editing by Shinjini Ganguli and Bill Berkrot)

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