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Drug giants in opioid compensation deal
Pharmaceutical companies are being pursued for peddling addictive opioids. The sums involved could be massive. Matthew Partridge reports.
There has been another "flurry of deals" over the opioid crisis, says Jan Hoffman in The New York Times. Teva Pharmaceutical Industries, as well as distributors McKesson, Cardinal Health and AmerisourceBergen, have agreed to pay a total of $260m to two Ohio counties. The counties were aiming to hold the companies liable for the "epidemic of addiction" that has killed hundreds of thousands of Americans. Despite agreeing to settle, the companies continue to dispute that they delivered "highly suspicious quantities" of opioids without properly reporting them.
That settlement is limited to the two counties involved. But there are also signs of progress in the "complex negotiations" between the same companies and various states, cities and counties to try to settle "mass litigation" over the issue, says Hannah Kuchler in the Financial Times. The companies and four states have sketched a draft proposal that would see the firms pay $48bn to the 50 states (and the District of Columbia), with the firms "paying $22.25bn in cash and $26bn in kind"; Teva would contribute $23bn of medication to treat opioid victims. The markets have had a mixed response to the deal, with Teva's shares jumping, Johnson & Johnson's flat, and Cardinal Health and AmerisourceBergen's stocks falling.
A good deal for Teva
A "multibillion-dollar deal that brings closure to 2,500 lawsuits and sends needed money to communities hard-hit by opioid addiction" would indeed be welcome, says Sara Randazzo in The Wall Street Journal. However, nothing is guaranteed, especially as there are "deep differences" not only between the plaintiffs and defendants, but also among the "hundreds of states, counties, cities and Native American tribes bringing suits". The cities and counties say any broader settlement should "immediately go toward helping alleviate the impacts of opioid addiction", avoiding the outcome of the 1990s tobacco litigation, in which a $206bn settlement "went to the states and was often spent to fill budget holes".
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Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
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Despite the delays, there "is not much doubt" that a global settlement is "going to happen", says Bloomberg's Joe Nocera. After all, the cities and counties "need money to help end the crisis" and the only way they're going to get it "is from the big companies they're suing". Similarly, while the companies "may not think it is fair", society is demanding "that they pay up for their roles in the opioid scourge".
Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
