Three drug distributors are in talks with state and local governments in the United States to settle thousands of opioid lawsuits for $18bn, the Wall Street Journal reported on Tuesday, citing people familiar with the discussions.
McKesson Corp, AmerisourceBergen Corp and Cardinal Health would together pay the amount over 18 years, at a rate of $1bn a year, based on the deal currently being discussed, according to the Journal.
The three companies, which together control about 85 percent of the US prescription drug market, are among six that are slated to be defendants in a landmark trial set to begin in federal court in Cleveland, Ohio, on October 21. The trial involves claims by two Ohio counties that the companies failed to halt and report suspicious orders of addictive painkillers.
If the three companies reach a settlement before the trial starts, the remaining defendants would be Teva Pharmaceutical Industries Ltd, Walgreens Boots Alliance Inc and Henry Schein Inc.
Teva has also offered to give away more than $15bn in generic drugs, including those that help fight opioid overdoses, to resolve all of its cases, the Bloomberg news agency quoted sources as saying.
If all the proposals are accepted, the Cleveland trial could be delayed, given that the three distributors and Teva are the main defendants, Bloomberg reported.
The trial is meant to be presided over by US District Judge Dan Polster, who has long pushed for a global settlement of the litigation. It is among more than 2,300 lawsuits in federal court and 2,600 total cases filed by state, local and tribal governments, hospitals and other entities, seeking to hold the drug industry responsible for the toll of opioid abuse.
Johnson & Johnson (J&J) is also involved in the discussions to contribute additional money, the Journal cited unnamed sources as saying.
Also on Tuesday, Bloomberg reported that J&J had offered to pay $4bn in talks with state attorney generals to settle claims related to the US opioid epidemic.
Opioid addiction took roughly 400,000 lives in the US from 1999 to 2017, according to the US Centers for Disease Control and Prevention.
Earlier this month, J&J said it would pay $20.4m to settle claims by the two Ohio counties, becoming the fourth drugmaker to settle claims in advance of the Federal Court trial. In a statement on Tuesday it said, “As previously stated, we remain open to viable options to resolve these cases, including through settlement.”
Cardinal Health and AmerisourceBergen declined to comment, while the other companies did not immediately respond to requests from news agencies for comment.
Shares of McKesson jumped about 9 percent in extended trading, while those of AmerisourceBergen rose 7 percent and Cardinal Health about 8 percent on prospects of ending what is expected to be a long and gruelling legal battle related to a health crisis blamed for hundreds of thousands of deaths.