Five drugmakers and distributors are offering $22 billion in cash as
well as drugs and services they value at $28 billion to resolve
lawsuits alleging the industry fuelled the U.S. opioid crisis, two
sources familiar with the matter said on Wednesday.
The drug industry faces roughly 2,600 lawsuits brought by state and
local governments, hospitals and other entities seeking to hold
drugmakers and distributors responsible for the toll of opioid abuse.
Local governments seek funds to cover costs of services in their
communities.
Distributors McKesson Corp, AmerisourceBergen Corp and Cardinal
Health have offered to pay $18 billion in cash over 18 years, while
drugmaker Johnson & Johnson would pay $4 billion in cash, two people
familiar with the matter told Reuters.
Teva Pharmaceutical Industries Ltd has offered to give away
medications it values at $15 billion as part of the deal and provide
distribution services it values in the billions, one of the people said.
Both said that Teva’s proposed agreement would run over 10 years and
had a total estimated value of around $28 billion. However, it is not
clear how the valuation was reached, and one source said some states are
asking whether Teva should pay cash as well.
The negotiations are being led by the attorneys general for Texas, Tennessee, North Carolina and Pennsylvania, one person said.
Teva and the three distributors are all defendants in a landmark
trial set to begin in federal court in Cleveland, Ohio, on Monday. U.S.
District Judge Dan Polster, who has long pushed for a global settlement
of the litigation, will preside over the trial.
The distributors, accused of failing to halt and report suspicious
drug orders, are pushing for a settlement to be agreed to before the
trial begins on Monday, one source said. The second source added that a
sticking point was compensation for lawyers who typically are paid a
percentage of settlements and represent many of the state and local
plaintiffs.
The sources cautioned that there was no guarantee a deal would be
struck. One source said lawyers for the thousands of cities and counties
with cases pending in federal court have not yet agreed to back the
proposal the states are negotiating.
In a joint statement late on Wednesday, the lead attorneys for the
cities and counties pursuing federal lawsuits – Joe Rice, Paul Farrell
and Paul Hanly – called media reports that they were tentatively
supporting the settlement proposal “inaccurate.”
“We await the fine print of the settlement framework so that we can
work alongside the 2,600 communities we represent to determine the best
path forward,” they said.
Jury selection went ahead on Wednesday in anticipation of opening
statements on Monday. Other defendants in the trial are Walgreens Boots
Alliance Inc and Henry Schein Inc.
Opioid addiction claimed roughly 400,000 lives in the United States
from 1999 to 2017, according to the U.S. Centers for Disease Control and
Prevention.
The companies did not respond to requests for comment on Wednesday. J&J had said on Tuesday it was open to a settlement.
https://www.marketscreener.com/HENRY-SCHEIN-INC-9582/news/Drug-firms-offer-to-settle-U-S-opioid-suits-with-50-billion-package-sources-29385820/
