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Opioid distributors reach $518 million settlement with Washington state

FILE PHOTO: Tablets of the opioid-based Hydrocodone at a pharmacy in Portsmouth

By Dietrich Knauth

(Reuters) -Washington has reached a $518 million settlement with drug distributors McKesson Corp, AmerisourceBergen Corp and Cardinal Health Inc, ending a months-long trial over the companies' alleged role in fueling the opioid epidemic in the state.

McKesson will pay $197 million, while AmerisourceBergen and Cardinal will each contribute $160.5 million to the settlement.

Washington had opted out of a $26 billion nationwide opioid settlement involving the three largest U.S. drug distributors and Johnson & Johnson. The state previously said it would have received $417.9 million from McKesson, Cardinal Health and AmerisourceBergen under that settlement.

The settlement is one of the largest in Washington State history, state Attorney General Bob Ferguson said in a news conference.

"We could have joined the overwhelming majority of states and settled with the largest opioid distributors, but we chose to fight them in court instead," Ferguson said. "That decision to take them to court will result in significant additional resources for Washington to combat the opioid epidemic."

The state had accused the three companies of failing to prevent prescription pills from being diverted for illegal use during a trial that began in November before King County Superior Court Judge Michael Scott in Seattle.

Washington had sought $38.2 billion to fund public health initiatives related to opioid addiction.

Despite falling far short of its trial demands, Washington improved on the previous settlement offer without risking a loss in court, Ferguson said.

"It would be a bad day for the state of Washington if I take that risk and I lose," Ferguson said.

The settlement will become final if all Washington's political subdivisions agree to participate before a September 2022 deadline. If the settlement is finalized, the drug distributor payments will be spread over 17 years.

The distributors, who deny wrongdoing, said the settlement would provide meaningful relief to communities impacted by the opioid epidemic in the United States, which has caused more than 500,000 overdose deaths over the past two decades, according government data.

Washington state will continue to bring lawsuits against companies that contributed to the opioid crisis, Ferguson said. The state expects to go to trial against J&J in September.

Other states that opted out of the broader nationwide settlement include Alabama and Oklahoma. West Virginia was not eligible to join the national agreement because of a prior settlement between the state and the three distributors.

Alabama recently reached settlements with McKesson and J&J, while West Virginia settled the state's opioid claims against J&J.

Florida and West Virginia are currently in the midst of opioid trials against other defendants.

(Reporting by Dietrich Knauth; Editing by Emelia Sithole-Matarise and Bill Berkrot)