Drug Distributors Reach $300M Opioid Settlement

Drug Distributors Reach $300M Opioid Settlement

Introduction

The three largest U.S. drug distributors—McKesson Corp, Cencora Inc, and Cardinal Health Inc—have agreed to pay $300 million to settle claims by health insurers and benefit plans over their role in fueling the U.S. opioid crisis.

The proposed settlement, which still requires court approval, was revealed in a filing in federal court in Cleveland, Ohio. This class action settlement covers third-party payers, such as union funds, that "largely paid for the overprescribed and overmarketed opioid pills," said a lawyer for the plaintiffs. These payers also bore the costs of treatment when beneficiaries developed opioid use disorder.

The settlement follows a previous $21 billion agreement by the same distributors to resolve claims from state and local governments, which accused them of failing to prevent the illegal diversion of addictive painkillers. As part of this new agreement, McKesson will pay 38.1% of the $300 million, Cardinal Health 30.9%, and Cencora 31%. The companies did not admit any wrongdoing.

The case is one of thousands seeking accountability from drug manufacturers, distributors, and pharmacies for the opioid epidemic that has caused hundreds of thousands of overdose deaths in the U.S. over the last two decades. To date, these lawsuits have resulted in over $50 billion in settlements, primarily with states and local governments.