AmerisourceBergen (NYSE: ABC), Cardinal Health (NYSE: CAH) and
McKesson (NYSE: MCK) announced today that they have negotiated a
comprehensive proposed settlement agreement which, if all
conditions are satisfied, would result in the settlement of a
substantial majority of opioid lawsuits filed by state and local
governmental entities.
While the companies strongly dispute the allegations made in
these lawsuits, they believe the proposed settlement agreement and
settlement process it establishes, which is outlined below, are
important steps toward achieving broad resolution of governmental
opioid claims and delivering meaningful relief to communities
across the United States. The companies remain deeply concerned
about the impact the opioid epidemic is having on individuals,
families, and communities across the nation and are committed to
being part of the solution.
The proposed settlement agreement is the result of years of
negotiation with state attorneys general and representatives of the
subdivisions. If the proposed settlement agreement and settlement
process leads to final settlement through the process outlined
below, it would collectively provide thousands of communities
across the United States up to approximately $21 billion over 18
years. It would also establish a clearinghouse that consolidates
data from all three distributors, which will be available to the
settling states to use as part of their anti-diversion efforts.
Subject to certain future milestones described below and the
level of participation, the companies would be responsible for up
to the following contributions, payable over 18 years:
- AmerisourceBergen: $6.4 billion
- Cardinal Health: $6.4 billion
- McKesson: $7.9 billion
The proposed settlement agreement would become binding only if
all conditions outlined below are satisfied:
Approval of State and Territorial
Participation
For the next 30 days, all U.S. States,
territories and Washington DC will have the opportunity to join the
settlement, except West Virginia which settled previously with the
companies. After the conclusion of the state sign-on period, each
company will independently determine whether a sufficient number of
states have joined to warrant continuing with the political
subdivision sign-on period.
Approval of Political Subdivision
Participation
If the distributors decide that sufficient
states have joined, each participating state will continue to offer
its political subdivisions, including those that have not sued, the
opportunity to participate in the settlement for an additional
120-day period. After the conclusion of the political subdivision
sign-on period, each company will independently determine whether a
sufficient number of states and a sufficient number of political
subdivisions have joined for the settlement to proceed to
implementation.
If the conditions are satisfied, the settlement would become
effective 60 days after the distributors determine that there is
sufficient participation to proceed. During this 60-day period, the
participating states and the distributors would cooperate to obtain
consent judgments in each participating state embodying the terms
of the settlement. The companies will make their first annual
settlement payment into escrow on or before September 30, 2021, and
the payment will be disbursed following the effective date, or
returned to distributors if the settlement does not become
effective.
If, however, a settlement cannot be finalized and plaintiffs
instead choose to pursue their claims in court, the companies will
continue to assert their strong legal defenses in pending
litigation.
This settlement process only addresses the claims of U.S. state
attorneys general and political subdivisions in participating
states. The West Virginia subdivisions and Native American tribes
are not part of this settlement process.
Cautionary Statements Regarding Forward Looking
Statements
The preceding descriptions of a potential resolution of certain
governmental entities’ opioids-related claims against
pharmaceutical distribution companies constitute “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934,
that involve risks and uncertainties that could cause actual
results to differ materially from those in those statements. It is
not possible to identify all such risks and uncertainties. The
reader should not place undue reliance on forward-looking
statements, which speak only as of the date they are first made.
Except to the extent required by law, the companies undertake no
obligation to publicly update forward-looking statements. Risk
factors include, but are not limited to: the settlement process may
not result in a resolution of all or any claims against each
company regarding its role in distributing opioids; the companies
may continue to experience costly and disruptive legal disputes and
settlements related to distribution of controlled substances,
including opioids; the companies might experience losses not
covered by insurance; and the companies might be adversely impacted
by changes in tax legislation or challenges to their respective tax
positions. Investors should read the important risk factors
described in each company’s Form 10-K, Form 10-Q and Form 8-K
reports filed with the Securities and Exchange Commission.
About AmerisourceBergen
AmerisourceBergen fosters a positive impact on the health of
people and communities around the world by advancing the
development and delivery of pharmaceuticals and healthcare
products. As a leading global healthcare company, with a foundation
in pharmaceutical distribution and solutions for manufacturers,
pharmacies and providers, we create unparalleled access, efficiency
and reliability for human and animal health. Our 41,000 global team
members power our purpose: We are united in our responsibility to
create healthier futures.
About Cardinal Health
Cardinal Health is a distributor of pharmaceuticals, a global
manufacturer and distributor of medical and laboratory products,
and a provider of performance and data solutions for healthcare
facilities. With 50 years in business, operations in more than 40
countries and approximately 48,000 employees globally, Cardinal
Health is essential to care. Information about Cardinal Health is
available at cardinalhealth.com.
About McKesson Corporation
McKesson Corporation is a global leader in healthcare supply
chain management solutions, retail pharmacy, community oncology and
specialty care, and healthcare information solutions. McKesson
partners with pharmaceutical manufacturers, providers, pharmacies,
governments and other organizations in healthcare to help provide
the right medicines, medical products and healthcare services to
the right patients at the right time, safely and cost-effectively.
United by our ICARE shared principles, our employees work every day
to innovate and deliver opportunities that make our customers and
partners more successful - all for the better health of patients.
McKesson has been named a “Most Admired Company” in the healthcare
wholesaler category by FORTUNE, a “Best Place to Work” by the Human
Rights Campaign Foundation, and a top military-friendly company by
Military Friendly. For more information, visit
www.mckesson.com.
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AmerisourceBergen Investor
Contact: Bennett S. Murphy 610-727-3693
bmurphy@amerisourcebergen.com
Media Contact: Gabe Weissman 610-727-3696
gweissman@amerisourcebergen.com
Cardinal Health Investor
Contact: Kevin Moran 614-757-7942
kevin.moran@cardinalhealth.com
Media Contact: Erich Timmerman 847-887-1487
Erich.Timmerman@cardinalhealth.com
McKesson Investor Contact:
Holly Weiss 972-969-9174 Holly.Weiss@McKesson.com
Media Contact: David Matthews 214-952-0833
David.Matthews@McKesson.com
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