Drug firms strike 11th-hour deal to avoid major opioid trial

CLEVELAND (Reuters) — Four large drug companies could resume talks on Tuesday to try to reach a $48 billion settlement of all opioid litigation against them, after agreeing with two Ohio counties to a $260 million deal to avert the first federal trial over their role in the U.S. opioid epidemic.

Drug distributors AmerisourceBergen, Cardinal Health and McKesson and drugmaker Teva Pharmaceutical Industries agreed to the deal that removed the immediate threat of a trial that was to begin on Monday in Cleveland.

The parties could resume talks as soon as Tuesday aimed at a broader settlement of thousands of opioid lawsuits brought by states and local governments, according to Paul Hanly, an attorney for the towns and counties.

Under Monday’s local settlement, the distributors, which handle around 90 percent of U.S. prescription drugs, will pay a combined $215 million immediately to Ohio’s Cuyahoga and Summit counties that were plaintiffs in Monday’s trial.

Israel-based Teva said it was paying $20 million in cash and will contribute $25 million worth of Suboxone, an opioid addiction treatment.

Teva, the world’s largest maker of generic drugs, said it will make its contribution over three years.

The companies have been accused of fueling a nationwide opioid crisis. Some 400,000 U.S. overdose deaths between 1997 and 2017 were linked to opioids, according to government data.

“While the companies strongly dispute the allegations made by the two counties, they believe settling the bellwether trial is an important stepping stone to achieving a global resolution,” the distributors said in a joint statement.

Hanly said his team rejected a proposed $18 billion settlement last week from the three distributors because the payments were due to be made over 18 yeas.

“One billion dollars for the entire year is a ham sandwich,” said Hanly. “It’s way too small an amount.”

Teva and attorneys general for four states pushed to salvage a deal they had reached last week, which was rejected by the team representing local governments.

North Carolina Attorney General Josh Stein told reporters on a conference call that he and his counterparts in Pennsylvania, Texas and Tennessee had an agreement in principle with the distributors as well.

He said the deal was comprised of $22 billion in cash and $26 billion in treatment drugs.

Teva said it had agreed with the four attorneys general to contribute opioid treatment drugs worth $23 billion, as well as $250 million in cash over 10 years.

The other contributions to the broader settlement were to come from the distributors.

It was not clear if the settlement framework the four states announced would receive support from other states or the local governments, who had previously contended it was inadequate.