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Pharmaceutical companies reach $260 million settlement in opioid case before trial begins

The four companies settled with the two Ohio counties that had brought the lawsuit, avoiding what was expected to be a bellwether trial.

Jeff Lagasse, Associate Editor

Monday was supposed to be the day when four pharmaceutical companies appeared as defendants in a trial that sought to litigate their culpability in the opioid epidemic. Instead, those companies reached a settlement Monday morning totaling $260 million, multiple sources confirm.

The four companies in question -- AmerisourceBergen Corp., Cardinal Health, McKesson Corp. and Teva Pharmaceutical Industries -- settled with the two plaintiffs, Summit and Cuyahoga counties in Ohio, in what CNN said was the first federal multidistrict litigation trial involving the opioid epidemic. While MDL cases are similar to class action lawsuits, each plaintiff in an MDL case can receive a different verdict.

Cardinal Health, McKesson and AmerisourceBergen will pay a combined $215 million, and Teva Pharmaceutical will pay out $20 million. According to CNBC, Teva will pay out its contribution over a period of 18 months.

WHAT'S THE IMPACT

The Ohio counties had contended heading into Monday that the four pharmaceutical companies helped to fuel the opioid crisis that's still gripping many parts of the U.S., with an estimated 400,000 deaths from 1997 to 2017 linked to the use of opioids.

The trial was expected to be a bellwether trial, which meant it was intended to be a guide for determining the broader settlement of roughly 2,600 similar lawsuits still pending across the country. There were talks last week of a $48 billion global settlement of all opioid litigation against the same four defendants, but those talks collapsed.

McKesson, in a statement posted to its website Monday, denied allegations of wrongdoing.

"While the companies strongly dispute the allegations made by the two counties, they believe settling the bellwether trial is an important stepping stone to achieving a global resolution and delivering meaningful relief," the company said. "The companies expect settlement funds to be used in support of initiatives to combat the opioid epidemic, including treatment, rehabilitation, mental health and other important efforts."

Cuyahoga County said the funds will go toward increasing emergency care follow-up and expanding the number of residential treatment beds, as well as crafting alternatives to jail time for low-level drug offenders.

Two other defendants were also involved in the case: pharmacy chain Walgreens and small pharma outfit Henry Schein Medical. Walgreens was not part of the settlement. Instead, claims against the company have been moved to a different track, and will be litigated once a new trial date is determined.

THE LARGER TREND

A number of factors play into the prevalence of opioids, including direct payments to doctors. Doctors who receive direct payments from opioid manufacturers tend to prescribe more opioids than doctors who receive no such payments, research showed.

The association between payments and prescribing is strongest for hydrocodone and oxycodone, the most frequently prescribed opioids among Medicare patients.

Twitter: @JELagasse

Email the writer: jeff.lagasse@himssmedia.com