Drug distributors McKesson Corp., Cardinal Health Inc. and AmerisourceBergen Corp. have offered a $10 billion settlement to resolve lawsuits in more than 35 states alleging the companies fueled the opioid epidemic, according to an Aug. 6 Bloomberg report.
The proposed payment is part of ongoing discussions with state attorneys general, Bloomberg said, citing three individuals familiar with the offer. The National Association of Attorneys General countered the offer with $45 billion to cover the public health costs of the epidemic, according to the individuals.
McKesson's shares were trading down by about 6% to $135.95 as of 2:29 p.m. ET, while Cardinal Health's stock was down about 6.3% to $42.68 at the same time. AmerisourceBergen's shares declined by approximately 6.2% to $83.23.
Drug distributors and manufacturers have been accused by state lawmakers of using deceptive marketing techniques that fueled the opioid epidemic, which claims as many as 100 lives in the U.S. every day. Distributors, specifically, have been accused of ignoring red flags of abuse and pushing sales of the pain-killing drugs in states that were already flooded with them.
Altogether, McKesson, Cardinal Health and AmerisourceBergen shipped approximately 76 billion pain pills between 2006 and 2012, the U.S. Drug Enforcement Agency has said.
The settlement would be a complex process; the companies face 2,000 lawsuits from cities and other governments around the country headed by a separate group of lawyers who are also pushing for a settlement. The three distributors have already paid millions of dollars in settlements to states such as West Virginia.
McKesson, Cardinal Health and AmerisourceBergen may require that a high percentage of the local cities and counties agree to join the settlement, Bloomberg said.
Most of the opioid lawsuits have been consolidated in a Cleveland, Ohio, court, where the first trial is expected to begin Oct. 21. The defendant companies have sought a delayed start date to prepare for the trial.
Meanwhile, drugmakers such as Purdue Pharma LP, Teva Pharmaceutical Industries Ltd. and Johnson & Johnson are facing similar charges of contributing to the opioid epidemic, which has led to thousands of deaths in the U.S.