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 U.S. state attorneys general are expected to unveil a settlement
proposal this week with distributors McKesson Corp, Cardinal Health
Inc and AmerisourceBergen Corp contributing a combined $21 billion,
while Johnson & Johnson would pay $5 billion.
The ultimate settlement price-tag could fluctuate depending on how
many state and local governments agree to the deal or reject it to
pursue litigation on their own.
More than 3,000 lawsuits, mostly by local governments, have been
filed over the opioid crisis against a range of companies for
allegedly downplaying the risk of the drugs and for lax controls
that allowed the highly addictive painkillers to flood communities.
Excluded from the potential $26 billion deal are pharmacy operators
including Walgreens Boots Alliance, Walmart Inc, Rite Aid Corp and
CVS Health Corp, which have been accused of ignoring red flags that
opioid drugs were being diverted into illegal channels.
The deal also would not include drugmakers AbbVie Inc, Teva
Pharmaceutical Industries Ltd or Endo International Plc, which have
been accused of misleadingly marketing their pain medicines as safe.
Nearly 500,000 people died from opioid overdoses in the United
States from 1999 to 2019, according to the U.S. Centers for Disease
Control and Prevention. The CDC last week said provisional data
showed that 2020 was a record year for overall drug overdose deaths
with 93,331, up 29% from a year earlier.
The pharmacies and drugmakers have denied the claims, saying rising
opioid prescriptions were driven by doctors, that they followed
federal law and that the known risks were included in U.S.-approved
labels for the drugs.
News of the proposed nationwide settlement came three weeks into a
jury trial in New York, and legal experts said upcoming court
proceedings will pressure the remaining defendants to reach a deal.
The drugmakers are currently defending themselves at the New York
trial and a trial in Orange County, California, and are expected to
face another trial in San Francisco along with the pharmacies later
this year. The pharmacies, which settled the New York case shortly
before trial, also face an October trial in Ohio.
Endo is scheduled to go to trial next week to assess damages over a
lawsuit brought on behalf of Tennessee counties and an infant
allegedly born addicted to opioids, in which a judge has already
ruled the company liable. District Attorney General Barry Staubus of
Tennessee's Sullivan County told WHLJ television that the company
offered to settle, but the deal would be limited to that case.
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'COMMON GOAL' TO END EPIDEMIC
Richard Ausness, a law professor at the University of Kentucky, said
a settlement this week reduces the groups of defendants in the
litigation and makes it harder for the remaining companies to blame
others.
"It puts pressure on them to reach a deal, especially if the
mechanics were formulated in this present settlement,” he said.
Peter Mougey, a lawyer representing the local governments pursuing
opioid litigation around the country, said at a news conference to
discuss proposed settlements that he was "frustrated" pharmacies
were not part of the nationwide deal.
"They've had ample time to assess where they are with their
liability, and we all have the common goal of trying to end this
opioid epidemic," he said.
The pharmacies did not immediately respond to requests for comment.
In 2019, Teva proposed a settlement in which it would donate
addiction treatment drugs that it valued at $23 billion. Industry
analysts said the actual cost of the drugs to Teva could be as
little as $1.5 billion, however, and plaintiffs' lawyers balked at
what they called an inflated valuation.
Joe Rice, another plaintiffs' lawyer, said Teva had not been
involved in settlement talks since early 2020 but that plaintiffs
hoped to negotiate with them going forward.
Teva said in a statement on Tuesday that it remained "confident" it
would reach a deal involving donated drugs, and that it would defend
itself against "unfounded claims" in the meantime.
"Now more than ever - with local state government budgets
dramatically impacted by COVID - it is clear that donated medicines
provide the holistic approach needed for solving the epidemic of
addiction," the Israel-based company said.
AbbVie and Endo did not immediately respond to requests for comment
on settlement negotiations.
Other settlements are also being negotiated with OxyContin maker
Purdue Pharma and generic opioid maker Mallinckrodt Plc now working
through the bankruptcy courts to secure support for settlements
worth more than $10 billion and $1.6 billion, respectively.
(Reporting By Brendan Pierson in New York and Tom Hals in
Wilmington, Delaware; Editing by Bill Berkrot)
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