Opioid settlement reached in Ohio with drug companies

The nation’s three top drug distributors and a major drugmaker have reached a tentative deal to settle a lawsuit related to the opioid crisis just as the first federal trial over the crisis was due to begin Monday in Ohio, according to a lawyer for the local governments leading the complaint.

The deal, details of which were to be announced later Monday, settles claims by state and local governments against drug distributors AmerisourceBergen, Cardinal Health and McKesson and pharmaceutical firm Teva.

The Ohio jury case is the first of 2,300 opioid lawsuits filed in federal court by counties, cities and Native American tribes around the country that accuse drugmakers of helping fuel the deadly opioid crisis, which has killed about 400,000 Americans in the past two decades.

The case was expected to be watched as a litmus test for thousands of other lawsuits against drugmakers, distributors, and retail pharmacies, like Walgreens, Cardinal Health and McKesson. The opioid epidemic has also taken a massive toll on the economy, reaching at least $631 billion from 2015 to 2018 alone, according to a report released last week.

The crisis’ costs aren’t over. The crisis is projected to cost the economy up to another $214 billion in 2019, according to the authors of the study, which was conducted by Milliman, a provider of corporate actuarial services. Those losses, in lives and dollars, are likely to mount.

Lines at the courtroom

After five drug manufacturers, including Johnson & Johnson, reached settlements leading up to the trial, it became clear that the focus would be largely on the behavior of the distributors. Opening arguments were scheduled to begin Monday in U.S. District Court in Cleveland for the case involving claims bought by the Ohio counties of Cuyahoga and Summit.

It was not immediately clear whether the federal trial in Cleveland would go forward with the two remaining defendants — distributor Henry Schein and pharmacy chain Walgreens. Lawyers, journalists and spectators packed courtroom and two overflow rooms, forming lines dozens deep before the courtroom opened at 8 a.m.

The deal was first reported by The Wall Street Journal and was confirmed to The Associated Press by Paul Hanly, a lead lawyer for the local governments suing the drug industry.

Suspicious orders

The plaintiffs say distributors failed to uphold a requirement that they stop suspicious orders of controlled substances from being shipped. Federal data released as part of the litigation shows that 76 billion oxycodone and hydrocodone pills were shipped to U.S. pharmacies from 2006 to 2012, with shipments continuing to grow even after the U.S. Drug Enforcement Administration warned the drug industry about the increasing misuse of prescription opioids.

An Associated Press analysis found that in 2012, enough of the powerful and addictive painkillers were shipped for every man, woman and child in the U.S. to have nearly a 20-day supply.

The lawsuits also alleged that drugmakers improperly marketed opioids to prescribers, overselling the benefits and understating the risks of a class of drugs that has been known for centuries to be addictive.

The judge overseeing the federal litigation had long pushed for settlements that would not only provide for damages for the plaintiffs, but also change practices as a way to make a dent in the opioid crisis.

Overdose legacy

The epidemic has become more complicated in the past decade, with fatal overdose numbers rising largely because of illicit drugs such as heroin and fentanyl.

The settlement efforts until now have been mixed.

Four drugmakers reached deals only with the two Ohio counties — enough to get them out of the first trial, but leaving unresolved the claims from communities across the country.

OxyContin maker Purdue Pharma reached a tentative settlement last month that could be worth up to $12 billion over time. But half the states and hundreds of local governments oppose it. The company is now going through federal bankruptcy proceedings in White Plains, New York, creating the possibility that its settlement offer could be renegotiated.