Item 8.01. Other Events.
As previously disclosed, in
On
The Agreement is subject to contingencies and will not become effective unless and until the Boards of Directors of the Company and the two other distributors each make separate independent determinations that (1) following a sign-on period, a sufficient number of states have agreed to the Agreement (the "Settling States"); and, subsequently, (2) following a notice period, that a sufficient number of states and political subdivisions, including those that have not sued, have agreed to the Agreement (or otherwise had their claims foreclosed) to proceed to effectiveness. Prior to the second determination, the Settling States will also have an opportunity to make a determination as to whether a sufficient number of political subdivisions have agreed to the Agreement (or otherwise had their claims foreclosed) to proceed with the Agreement. This process is currently contemplated to take 194 days, although it may be extended by agreement.
If these conditions are satisfied, the Agreement would become effective sixty (60) days after the distributors determine that there is sufficient participation among political subdivisions. During this 60-day period, the Settling States and the distributors would cooperate to obtain consent judgments in each participating state embodying the terms of the Settlement.
On
The Agreement includes a cash component, pursuant to which the Company would pay
up to approximately
The Agreement also includes injunctive relief terms governing settling distributors' controlled substance anti-diversion programs, including with respect to: (1) governance; (2) independence and training of the personnel operating our controlled substances monitoring program; (3) due diligence for new and existing customers; (4) ordering limits for certain products; and (5) suspicious order monitoring. A monitor will be selected to oversee compliance with these provisions for a period of five years. In addition, the Company and the two other national distributors will engage a third-party vendor to act as a clearinghouse for data aggregation and reporting; distributors will fund the clearinghouse for ten years.
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In connection with the matters described above and other opioid-related matters,
the Company expects to record a total pre-tax charge of approximately
The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, which is attached hereto as Exhibit 99.2 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit Number Exhibit Description 99.1 News release issued onJuly 21, 2021 99.2 Proposed Settlement Agreement 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
Important Information Regarding Forward-Looking Statements
This Form 8-K contains forward-looking statements addressing expectations,
prospects, estimates and other matters that are dependent upon future events or
developments. These statements may be identified by words such as "expect,"
"anticipate," "intend," "plan," "believe," "will," "should," "could," "would,"
"project," "continue," "likely," and similar expressions, and include statements
reflecting future results or guidance, statements of outlook and various
accruals and estimates. These matters are subject to risks and uncertainties
that could cause actual results to differ materially from those projected,
anticipated or implied. These risks and uncertainties include the risk that we
may fail to reach a final settlement agreement; that a sufficient number of
states and other political subdivisions may not agree to the Agreement; the
possibility that negotiations with
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