Four large drug companies could soon resume talks to reach a $48 billion ($69bn AUD) settlement covering all opioid litigation against them.
The four companies have just struck a $260 million ($378m AUD) deal with two Ohio counties to avert the first federal trial over their role in the US opioid epidemic.
Drug distributors AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp and drug maker Teva Pharmaceutical Industries Ltd agreed to the $260m deal, removing the threat of a trial due to begin this week.
The parties could resume talks as soon as Tuesday, aimed at a broader settlement of thousands of opioid lawsuits brought by other states and local governments, according to lawyer Paul Hanly.
Under Monday's settlement the distributors, which handle around 90 per cent of United States prescription drugs, will pay a combined $215 million ($313m AUD) immediately to Ohio's Cuyahoga and Summit counties.
The Ohio counties' lawyer Mark Lanier said the settlement needed to be a catalyst for a larger solution to the opioid crisis.
Lawyer Mark Lanier, who says the settlement needs to lead to a larger solution to the opioid crisis. Source: AP
"The key consideration was to get financial relief as quickly as possible to the local governments that have paid the price for this epidemic for many years," he said.
"This incremental step will change a small corner of the globe ravaged by opioids. We need to make this a step ladder to a larger resolution."
Israel-based Teva said it was paying $20 million ($29m AUD) in cash and will contribute $25 million ($36m AUD) worth of Suboxone, an opioid addiction treatment.
Teva, the world's largest maker of generic drugs, said it will make its contribution over three years.
The companies have been accused of fuelling a nationwide opioid crisis.
Some 400,000 United States overdose deaths between 1997 and 2017 were linked to opioids, according to government data.
"While the companies strongly dispute the allegations made by the two counties, they believe settling the bellwether trial is an important stepping stone to achieving a global resolution," the distributors said in a joint statement.
Mr Hanly said his team rejected a proposed $18 billion ($26bn AUD) settlement last week from the three distributors because the payments were due to be made over 18 years.
The $260 million opioid settlement could lead to a larger deal in the United States. Source: AP
"One billion dollars for the entire year is a ham sandwich," said Mr Hanly.
"It's way too small an amount."
Teva and attorneys general for four states pushed to salvage a deal they had reached last week, which was rejected by the team representing local governments.
North Carolina Attorney General Josh Stein told reporters that he and his counterparts in Pennsylvania, Texas and Tennessee had an agreement in principle with the distributors as well.
He said the deal was comprised of $22 billion ($32bn AUD) in cash and $26 billion ($37bn AUD) in treatment drugs.
Teva said it had agreed with the four attorneys general to contribute opioid treatment drugs worth $23 billion ($33bn AUD), as well as $250 million ($364m AUD) in cash over 10 years.
The other contributions to the broader settlement were to come from the distributors.
'Positive momentum'
It was not clear if the settlement framework the four states announced would receive support from other states or the local governments, who had previously contended it was inadequate.
Pennsylvania Attorney General Josh Shapiro said he believed “there’s a lot of positive momentum” after Friday’s settlement talks, which he said also included Johnson & Johnson.
In a statement, Ohio Attorney General Dave Yost said other attorneys general "don't speak for Ohio."
"This isn't a framework, it's a pile of lumber that's been dropped on the construction site,” he said.
“Ohio will wait and see what the detailed plan looks like."
Mr Hanly said the deal was spread over too many years to be acceptable.
He said he did not expect the attorneys general to participate when talks resumed this week.
The so-called bellwether, or test trial, that had been set for Monday could have helped shape a broader settlement of some 2,600 lawsuits pending over the toll opioids have taken on local communities and the nation.
The settlement, if extrapolated to a nationwide deal resolving all litigation for the four defendants, suggests a settlement value of around $48 billion, based on a court-approved allocation formula.
Mr Hanly said he had not done the same calculation, but thought it was likely worth more.
The lawsuits accuse drug makers of overstating the benefits of opioids while downplaying the risks and allege distributors failed to flag and halt a rising tide of suspicious orders.
The companies have denied wrongdoing.
Drugmakers argued their products carried government-approved labels that warned of the addictive risks of opioids, while distributors had argued that their role was to make sure medicines prescribed by licensed doctors were available for patients.
Monday's settlement adds to deals worth $66.4m ($94m AUD) that the two Ohio counties earlier struck with drug companies Mallinckrodt Plc, Endo International Plc, J&J and Allergan Plc.
