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McKesson says states seek $21 billion from drug distributors in opioid settlement

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Nate Raymond
·2 min read
A needle used for shooting heroin lays in the street in the Kensington section of Philadelphia
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By Nate Raymond

(Reuters) - McKesson Corp <MCK.N> on Tuesday said it and two other major U.S. drug distributors could be expected to pay up to $21 billion under a new proposal to resolve thousands of lawsuits alleging they helped fuel the U.S. opioid crisis.

McKesson and rivals AmerisourceBergen Corp <ABC.N> and Cardinal Health Inc <CAH.N> last year proposed paying a combined $18 billion to resolve the roughly 3,200 lawsuits, with drugmaker Johnson & Johnson <JNJ.N> paying another $4 billion.

That proposal, part of a settlement framework negotiated with four state attorneys general, met resistance from lawyers for local governments and several states, leading to further talks. J&J on Oct. 13 said it would now contribute $5 billion.

San Francisco-based McKesson in a quarterly report said under the new $21 billion settlement framework proposed by attorneys general, it would pay about $8 billion over 18 years.

The proposal is subject to further negotiations, and McKesson said it "has not reached a point where settlement is probable."

"Communities are desperately in need of the relief this deal would provide," said Laura Brewer, a spokeswoman for North Carolina Attorney General Josh Stein, who is involved in the settlement talks.

AmerisourceBergen and Cardinal Health declined to comment.

The lawsuits, largely filed by states, counties and cities, seek to hold drug companies responsible for an opioid addiction epidemic that according to U.S. government data resulted in 450,000 overdose deaths from 1999 to 2018.

The lawsuits accuse drugmakers of deceptively marketing opioids and distributors of ignoring red flags indicating the prescription painkillers were being diverted for improper uses. They deny wrongdoing.

McKesson said the proposed settlement also calls for the distributors to make changes to their anti-diversion programs.

OxyContin maker Purdue Pharma and generic painkiller manufacturer Mallinckrodt Plc <MNK.N> previously filed for bankruptcy protection in connection with their own multibillion-dollar proposals to resolve opioid lawsuits against them.

(Reporting by Nate Raymond in Boston and Manas Mishra in Bengaluru; Editing by Peter Graff and Bill Berkrot)