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21 States Reject $18 Billion Offer From Drug Wholesalers to Settle Opioid Litigation -- 2nd Update

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02/14/2020 | 10:35am EDT

By Jared S. Hopkins

An $18 billion settlement offer from three major drug wholesalers aimed at resolving litigation over their alleged role in the opioid crisis appears to have fallen apart, after more than 20 state attorneys general rejected it in a letter sent to the companies' law firms this week.

The letter, reviewed by The Wall Street Journal, shows that the drug industry hasn't won enough support from states to begin moving the sprawling litigation to a global resolution.

The dissenting states want the wholesalers to contribute between $22 billion and $32 billion, according to a person familiar with the matter.

The rejection is the latest setback in negotiations to resolve the nation's complex opioid-crisis litigation, which began several years ago. The majority of the lawsuits have been consolidated in federal court in Cleveland, though state attorneys general have largely pursued cases in their own state courts.

The parties have been holding talks since at least October, when The Wall Street Journal reported that the three distributors -- McKesson Corp., AmerisourceBergen Corp., and Cardinal Health Inc. -- were in talks to collectively pay $18 billion over 18 years. Johnson & Johnson was also involved in the discussions to contribute additional money, the Journal reported.

The letter was signed by attorneys general for 21 states as well as Puerto Rico and the District of Columbia and include some of the hardest hit by the opioid crisis, including Ohio and West Virginia.

AmeriSourceBergen said it remains committed to a "fair negotiated resolution" but will continue to defend itself in court and is preparing for upcoming trials. It said in a statement it was "disappointed to hear that some states do not currently understand the merits of the global settlement framework that the distributors have been discussing with the attorneys' general over the past many months."

McKesson said it is focused on "finalizing a global settlement structure that would serve as the best path forward to provide billions of dollars in immediate funding and relief to states and local communities." The company said it is committed to be part of a solution but is prepared to defend itself in litigation.

Cardinal Health didn't respond to a request for comment.

Ohio Attorney General Dave Yost said in an interview the letter shows the states "who are not willing to sign on" to the settlement. He said the wholesalers should pay their $18 billion in a shorter time period or provide more funding.

The letter is signed mostly by Democratic attorneys general, although there are some Republicans, including West Virginia's Patrick Morrissey and Florida's Ashley Moody.

"Each of you has expressed that your clients seek a settlement that is global," the letter reads. "It is our collective view that the most recently communicated offer is unlikely to achieve that goal. We invite you to discuss our specific issues more fully so that a global settlement may be reached."

States in support of the deal remain optimistic that a global resolution can be worked out, according to a person familiar with the negotiations. Talks for the deal have been lead by a bipartisan group of attorneys general from North Carolina, Texas, Pennsylvania and Tennessee. Those attorneys general didn't sign the letter.

Write to Jared S. Hopkins at jared.hopkins@wsj.com


Stocks mentioned in the article
ChangeLast1st jan.
AMERISOURCEBERGEN CORPORATION -2.57% 86.23 Delayed Quote.4.09%
CARDINAL HEALTH, INC. -0.48% 47.71 Delayed Quote.-5.22%
MCKESSON CORPORATION -1.63% 133.06 Delayed Quote.-3.80%
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