July 22 (Reuters) - Endo International Plc has
agreed to pay $35 million to settle a lawsuit by Tennessee local
governments and on behalf of a child allegedly born addicted to
painkillers accusing the drugmaker of fueling the opioid
epidemic, the company announced Thursday.
The settlement came just days before the case was set to go
to trial to decide damages, in which plaintiffs were expected to
seek $2.4 billion. A judge had previously ruled Endo liable as a
penalty for failing to hand over evidence.
The deal must still be approved by some of the plaintiffs,
Endo said. Gerard Stranch, a lawyer for the plaintiffs, declined
Endo shares had jumped about 25% on Tuesday after local
government officials revealed that the drugmaker had made a
The lawsuit, which was filed in 2017, is being pursued by
nine counties, 18 cities and a "Baby Doe" allegedly born with
neonatal abstinence syndrome, which is caused by withdrawal
after in-utero opioid exposure.
The plaintiffs alleged that Endo downplayed the risks of its
painkiller Opana ER, which was pulled from the market in 2017
due to concerns about abuse. OxyContin maker Purdue Pharma and
generic opioid maker Mallinckrodt Plc were also named as
defendants in the case, but subsequently filed for bankruptcy,
leaving Endo as the only active defendant.
Chancellor E.G. Moody of the Circuit Court for Sullivan
County, who is overseeing the case, ruled in April that Endo and
its lawyers engaged in a "coordinated strategy" to withhold
evidence, including about opioid prescribers. He took the
unusual step of entering judgment of liability against the
company as a sanction, leaving only damages to be decided at
Nearly 500,000 people died from opioid overdoses in the
United States from 1999 to 2019, according to the U.S. Centers
for Disease Control and Prevention. The CDC last week said
provisional data showed that 2020 was a record year for overall
drug overdose deaths with 93,331, up 29% from a year earlier.
The Tennessee case is among the more than 3,000 lawsuits,
mostly by local governments, accusing drugmakers of falsely
promoting opioids as safe and distributors and pharmacies of
overlooking red flags that drugs were being diverted to illegal
channels. The defendants have denied the claims.
U.S. state attorneys general on Wednesday unveiled a
settlement proposal in which leading drug distributors McKesson
Corp, Cardinal Health Inc and AmerisourceBergen
Corp would pay a combined $21 billion, and drugmaker
Johnson & Johnson would pay $5 billion, to resolve most
claims against them.
Endo is not part of that deal, and is currently defending
itself along with other drugmakers at trials in New York and
California. The company in 2019 settled opioid claims by two
Ohio counties for $10 million.
(Reporting By Brendan Pierson in New York, additional reporting
by Tom Hals and Nate Raymond; editing by Diane Craft)