Talks to Settle Opioid Lawsuits Intensify
October 17 2019 - 6:15PM
Dow Jones News
By Sara Randazzo and Jared S. Hopkins
Drug companies and state and local governments are racing to cut
a deal in landmark opioid litigation, with talks set to continue
this week before a federal judge that could settle more than 2,500
lawsuits for tens of billions of dollars.
U.S. District Judge Dan Polster asked chief executives from top
drug companies to meet with lawyers for states, cities and counties
in his Cleveland court on Friday morning, according to people
familiar with the matter. Judge Polster is overseeing cases filed
by cities and counties and has pushed all sides to reach a
comprehensive settlement.
The companies -- distributors McKesson Corp., Cardinal Health
Inc., AmerisourceBergen Corp. and drugmaker Teva Pharmaceutical
Industries Ltd. -- are among the defendants in a trial slated to
start in Judge Polster's courtroom Monday. The case, expected to
serve as a bellwether for the broader litigation, involves two Ohio
counties that are among hundreds of plaintiffs trying to hold the
pharmaceutical industry accountable for widespread opioid
addiction.
Another major drugmaker, Johnson & Johnson, is also involved
in the broader settlement discussions but earlier reached a $20
million deal to avoid the Ohio trial.
Representatives for McKesson, AmerisourceBergen, Cardinal and
Teva declined to comment Thursday.
Some state attorneys general value the current settlement
proposal at as much as $50 billion, people familiar with the matter
said. That would include $18 billion in cash over 18 years from the
three major distributors -- McKesson, Cardinal and
AmerisourceBergen -- and another $4 billion from Johnson &
Johnson, The Wall Street Journal has reported.
Over a period of time, Teva would contribute drugs and
distribution services valued at as much as $29 billion, the people
said, adding that some states have expressed skepticism about the
value of Teva's portion of the deal.
Lawsuits against drugmakers and distributors began piling up in
2017, brought by state and local governments seeking to recoup the
costs of addressing opioid addiction, including pressure on
emergency services and foster-care systems.
One of the major early targets in the cases, Purdue Pharma LP,
the maker of OxyContin, filed for bankruptcy last month to try to
implement a deal it has valued at between $10 billion and $12
billion to resolve the 2,600 lawsuits it faces. Two dozen states
still oppose that deal, which includes at least $3 billion from
members of the Sackler family -- the company's owners -- saying it
doesn't hold Purdue sufficiently accountable.
Reaching a truly comprehensive resolution has proved challenging
for the drug companies because of the many plaintiffs' competing
agendas. In addition to 2,500 lawsuits filed by cities, counties,
hospitals and Native American tribes in federal court, virtually
every state attorney general has filed their own lawsuit in state
courts.
Attorneys general in Tennessee, Texas, North Carolina and
Pennsylvania are leading the current round of talks, causing
tension with some other states that feel cut out of the process.
Some plaintiffs' lawyers representing cities and counties don't
support the deal currently under discussion, a person familiar with
the matter said.
Ohio Attorney General Dave Yost sent a letter to the four
attorneys general on Thursday, expressing concerns with the current
settlement proposal and laying out the terms under which he could
back it, according to a copy of the letter view by the Journal.
The letter says that "the lack of consultation with other
attorneys general regarding terms of a possible settlement
increases the risk of a result similar to what we saw in the
Purdue/Sackler negotiations, where fully half of the states are not
in agreement." Outside of bankruptcy court, such dissension would
create an unworkable settlement, he wrote.
To win his support, Mr. Yost wrote, a deal would need to ensure
that money is spent "abating and remediating the addiction
epidemic" and that private plaintiffs' lawyers representing some of
the government entities don't get an undue windfall. Mr. Yost also
noted that Ohio, unlike many states, has sued the drug
distributors, adding that any agreement that treats the litigating
states "the same as those who have sat on the sidelines watching
while others carried the battle is unfair and inappropriate," he
wrote.
Meantime, preparations continue to race along for Monday's
trial. Twelve jurors were chosen Wednesday and Thursday, and
lawyers continue to ready for opening statements. It isn't clear
what any settlement with Teva and the drug distributors would mean
for the two other defendants set to go to trial before Judge
Polster next week, Walgreens Boots Alliance Inc. and a smaller
distributor, Henry Schein.
Write to Sara Randazzo at sara.randazzo@wsj.com and Jared S.
Hopkins at jared.hopkins@wsj.com
(END) Dow Jones Newswires
October 17, 2019 18:00 ET (22:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
McKesson (NYSE:MCK)
Historical Stock Chart
From Aug 2024 to Sep 2024
McKesson (NYSE:MCK)
Historical Stock Chart
From Sep 2023 to Sep 2024