$260M Deal Averts First Federal Trial on Opioid Crisis

The nation’s three biggest drug distributors and a major drugmaker agreed to an 11th hour, $260 million settlement Monday over the terrible toll taken by opioids in two Ohio counties, averting the first federal trial over the crisis.

The trial, involving Cleveland’s Cuyahoga County and Akron’s Summit County, was seen as a critical test case that could have gauged the strength of the opposing sides’ arguments and prodded the industry and its foes toward a nationwide resolution of nearly all lawsuits over opioids, the scourge blamed for 400,000 U.S. deaths in the past two decades.

The agreement was struck in the middle of the night, just hours before a jury that was selected last week was scheduled to hear opening arguments in federal court in Cleveland.

Drug distributors AmerisourceBergen, Cardinal Health and McKesson will pay a combined $215 million, said Hunter Shkolnik, a lawyer for Cuyahoga County. Israeli-based drugmaker Teva will contribute $20 million in cash and $25 million worth of generic Suboxone, a drug used to treat opioid addiction.

“People can’t lose sight of the fact that the counties got a very good deal for themselves, but we also set an important national benchmark for the others,” Shkolnik said.

The deal contains no admission of wrongdoing by the defendants.

Across the U.S., the pharmaceutical industry still faces more than 2,600 other lawsuits over the deadly disaster. Participants in those cases said the Ohio deal buys them time to try to work out a nationwide settlement of all claims.

It could also turn up the pressure to work out such a deal, because every partial settlement reached reduces the amount of money the companies have available to pay other plaintiffs.

The barrage of lawsuits was brought against drug manufacturers, suppliers and sellers by state and local governments, Native American tribes, hospitals and others. For nearly two years, a federal judge in Ohio has been pushing the parties toward one big settlement.

The only defendant left in the trial that had been scheduled for Monday is the drugstore chain Walgreens. The new plan is for Walgreens and other pharmacies to go to trial within six months.

The settlement enables both sides to avoid the risks and uncertainties involved in a trial: The counties immediately lock in money they can use to deal with the crisis, and the drug companies avoid a possible finding of wrongdoing and a huge jury verdict.

In a statement, the three major distributors said the settlement money should be used on such things as treatment, rehab and mental health services.

The settlement also means that the evidence prepared for the trial won’t be fully aired.

Those suing the industry have accused it of aggressively marketing opioids while downplaying the risks of addiction and turning a blind eye toward suspiciously large shipments of the drugs. The industry has denied wrongdoing.