The first federal trial in the US litigation over the opioid epidemic looked was prevented by last-ditch negotiations which reached a $260m settlement.
Pharmaceutical companies and wholesale distributors had been trying to get state and local authorities to back the settlement – which would include cash, supply of medicines including drugs to treat opioid addiction and overdose and distribution services.
Press reports coming out of the US suggest that one reason the deal was initially rejected is that state, city and county authorities couldn’t agree on how the proceeds of the settlement would be distributed.
US District Judge Dan Polster was due to start hearing the trial in Cleveland, Ohio, although he had been pushing for an out-of-court settlement to save all parties the hefty cost of litigation.
Polster spent a busy day last Friday handling meetings between state attorneys general, lawyers for local authorities and top executives of the US’ largest three wholesalers – AmerisourceBergen, Cardinal Health and McKesson – as well as drugmaker Teva and pharmacy group Walgreen Boots Alliance.
The deal, which was reached on Monday, will see McKesson, Cardinal Health and AmerisourceBergen pay $215m to the Ohio, US counties of Summit and Cuyahoga. Teva is also due to pay $45m in cash and addiction treatments.
Polster is presiding over thousands of lawsuits alleging that companies fuelled a healthcare crisis responsible for roughly 400,000 US deaths from 1999 to 2017, according to US government statistics.
The last-minute deal does not resolve the additional nationwide litigation.
The details of a wider settlement on the table differs depending on the source, but is thought to include roughly $22bn in cash and $29bn in products and distribution intended to help tackle the epidemic of opioid addiction that affects every US state.
The three wholesalers are offering $18bn over 18 years, with Johnson & Johnson adding another $4bn to the tally. Teva is in the midst of a challenging time financially at the moment so is trying to avoid a cash settlement, opting instead to provide $15bn worth of drugs and some distribution services.
J&J wasn’t involved in the talks on Friday because it has already settled with two Ohio counties that are being used as test plaintiffs in the federal trial. They have requested damages of up to $8bn, saying that is the amount of money needed to provide care for those affected by the crisis.
Lawyers for the estimated 2,600 plaintiffs involved in the litigation said in a statement last week that “our priority when assessing settlement proposals is to ensure they will provide urgently needed relief in the near term and that these resources will be directed exclusively toward efforts to abate the opioid epidemic”.