Opioid Crisis: U.S. Drug Distributors Propose $10 Billion to end public suits

Drug distributors AmerisourceBergen Corp, McKesson Corp and Cardinal Health Inc have proposed a $10 billion settlement for claims of their culpability in the opioid crisis, as reported by Bloomberg.

Hundreds of states and cities have filed lawsuits accusing drug producers and wholesalers including AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp of their accountability in deceiving consumers and prescribers of the drugs’ dangers.

Litigation in the federal opioid settlement stalled over the last 18 months as massive legal fees rose and concerns for human welfare in the crisis continued to intensify. Meanwhile, the wholesalers were overwhelmed by the consistent stream of new and updating cases.

According to U.S. Department of Health and Human Services Opioid overdoses accounted for more than 42,000 deaths in 2016 and this has risen every year. An estimated 40 percent of opioid overdose deaths involved a prescription opioid. In 2017 HHS declared a public health emergency.

Opioid Crisis by numbers: U.S. Department of Health and Human Services

Lawyers for the 2,000 city and county cases collaborated compiling an innovative plan that would allow all 34,000 towns, cities and counties in the country to vote on settlement offers, the New York Times reported. If an offer was approved, all plaintiffs would commit to the outcome, vowing to refrain from any further legal action and would be entitled to part of the payout.

The city and county lawyers hoped their proposal would affect the outcome of the Tobacco settlement and could provide a model for future resolutions in public health issues like firearms and climate change and pollution.

However, the state lawyers pushed back against the proposition saying the cases should be solved on a state-by-state basis. Traditionally, the states are the first defense for citizens, but only certain states progressed on this issue like Massachusetts. The proposal was reviewed in a Cleveland court Tuesday by Judge Dan A. Polster.

In the days following, The National Association of Attorneys General, representing more than 35 states, countered with a request for $45 billion to cover costs, according to the Bloomberg report.

AmerisourceBergen, McKesson and Cardinal Health shares took a hit and were down by 5 percent.

"We regularly engage with the state attorneys general, but the company has made no settlement offers," McKesson said in a statement.


Cardinal Health declined to comment. Spokesperson for AmerisourceBergen Francesca Gunning said "AmerisourceBergen does not create demand for opioid based medicines. Our role in the supply chain is to distribute FDA approved medications to licensed and DEA registered health care facilities. We are vigorously defending ourselves in the pending lawsuits."