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US states reject drug distributors’ opioid settlement

The Wall Street Journal reports at least 21 states want a larger settlement

US state court house

At least 21 US states have rejected an $18bn proposal by the ‘big three’ pharma wholesalers to settle opioid litigation, according to a Wall Street Journal report.

McKesson, AmerisourceBergen and Cardinal Health had offered the amount over an 18-year period, but the WSJ understands the states want a larger settlement of $22bn to $32bn, or a shorter timeframe for payment, citing people close to the matter.The wholesalers are accused in the litigation of contributing to the opioid crisis in the US by distributing inappropriately high volumes of opioid painkillers in the market, and failing to block suspicious transactions.

The pharma companies made the settlement offer last year as part of a wider deal – which also included a separate $4bn deal tabled by drugmaker Johnson and Johnson – in the build-up to a federal trial that was scheduled to begin in Ohio last October.

The trial was called off at the last minute after two Ohio counties serving as bellwethers in the case agreed a $260m with the wholesalers and Teva. J&J had settled with the counties for $20m shortly before.

The 21 states, along with Puerto Rico and Washington DC, reportedly think that the settlement offered by the wholesalers is too small to have a material impact on their businesses, and so would not constitute a sufficient penalty for the alleged activity.

An analyst at Evercore ISI told the news outlet that there is little chance of an end to the impasse anytime soon, but that negotiations will continue.

Litigation involving more than 2,600 plaintiffs is seeking redress for the crisis which has claimed approximately 400,000 lives over an 18-year period, according to the Centers for Disease Control and Prevention (CDC).

AmerisourceBergen told the WSJ that it is “disappointed to hear that some states do not currently understand the merits of the global settlement framework”, adding that it remains committed to a “fair negotiated resolution”.

In the meantime, the wholesaler said it will continue to defend itself in court and with chances of a settlement anytime soon now diminished, is preparing for upcoming trials.

McKesson said that it was prepared to defend itself in court, while asserting that a global settlement “would serve as the best path forward”, while Cardinal Health said it was committed to negotiating a deal that would “provide relief to communities impacted by the opioid epidemic”.

Article by
Phil Taylor

17th February 2020

From: Regulatory



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