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After flooding US with opioids, industry giants offer $50 billion settlement

Enlarge / Members of the International Brotherhood of Teamsters hold signs while protesting during the McKesson Corp. annual meeting at the Irving-Las Colinas Chamber of Commerce in Irving, Texas, US, on Wednesday, July 26, 2017. Getty | Bloomberg

Three of the nations largest drug distributors plus two big-name drug makers have reportedly offered a deal worth nearly $50 billion to settle more than two thousand opioid-crisis lawsuits, consolidated in federal court in Cleveland, Ohio. The first trial for the cases is scheduled to begin opening statements Monday.

The deal includes around $22 billion in cash, plus drugs and services valued at around $28 billion, according to sources familiar with the negotiations who spoke with Reuters.

Specifically, drug distributors McKesson Corp, AmerisourceBergen Corp, and Cardinal Health offered $18 billion in cash. Drug maker Johnson & Johnson offered another $4 billion. And finally, Israel-based Teva Pharmaceutical Industries offered to give away addiction medications and related services in a 10-year program that it estimated has a total value of $28 billion.

According to The New York Times, the cash is intended to go to healthcare, law enforcement, and other public costs of the opioid epidemic, which has killed nearly 400,000 people in the US in the past two decades.

If the scores of plaintiffs take the deal, the five companies would be released from the massive litigation. While the Times reported that multiple plaintiff states had agreed to the settlement terms, lead attorneys representing cities and counties in the cases—Joe Rice, Paul Farrell and Paul Hanly—pumped the brakes on the optimistic outlook on the deal, telling Reuters that media reports suggesting they, too, supported it were “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,” the attorneys said in a joint statement.

Collectively, the plaintiffs allege that opioid makers egregiously misrepresented their drugs risks and that distributors failed to prevent massive and obviously suspicious orders of opioids from flooding states and towns.

Make it rain

According to an analysis of federal data by The Washington Post, some rural areas received 200 to 300 opioid pills per person per year. McKesson Corp, AmerisourceBergen Corp, and Cardinal Health are three of just six companies responsible for distributing 75% of the 76 billion oxycodone and hydrocodone pain pills that inundated the country between 2006 and 2012. (The other three are CVS, Walgreens, and Walmart, who are also involved in the litigation but not this settlement negotiation.)

The three big distributors are also in the countrys top 20 in terms of revenue, the TiRead More – Source

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