Drug Distributors Agree To $300M Settlement For Role In Opioid Epidemic

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Dive Brief:

• The three biggest U.S. drug distributors have agreed to pay $300 million to health plans to settle lawsuits over their role in perpetuating the deadly opioid epidemic.
• McKesson, Cardinal and Cencora have already shelled out billions to resolve claims that their actions made it easier for people to access highly addictive pain medication. The latest suits brought by health insurers and benefits plans argue the drug distributors’ actions forced them to cover overprescribed pills, along with treatment for their members with opioid use disorder that they would not have had to pay for otherwise.
• The settlement — which does not require the distributors to admit wrongdoing — was disclosed Friday in an Ohio federal court, and still requires a judge’s approval

Dive Insight:

Starting in the late 1990s, a rash of inexpensive, highly addictive and duplicitously marketed painkillers hit the market, hooking millions of Americans and causing a cascading wave of deaths. Almost 645,000 people died from an overdose involving an opioid from the start of the epidemic to 2021, according to the Centers for Disease Control and Prevention.

Drugmakers, distributors, pharmacies and doctors have been taken to task for their role in flooding the country with opioids, including in thousands of lawsuits. Litigation has resulted in roughly $50 billion in settlements to date.

This litigation was brought by six benefit plans in Ohio, Oklahoma, Michigan and New York, including the health plan of New York City’s largest union. It argues that payers were forced to pay billions of dollars for opioids — and the resulting medical treatment their overuse required, including emergency room visits and care for opioid use disorder — because of the distributors’ actions.

Health plans filed the cases in late 2017 through early 2019. They were centralized in front of the Ohio Northern District court, which has overseen the vast majority of opioid-related litigation.

The parties have been hashing out a settlement since 2022, according to the filing.

The plaintiffs expect settlement funds to be split between more than 40,000 plans, including privately managed federal health employee benefits plans, managed Medicaid plans, Medicare Advantage and Part D plans and other local operators.

Government entities that have previously settled with the distributors are excluded from the settlement, as are major national insurers UnitedHealth, Aetna, Elevance, Cigna and Humana.

McKesson, Cardinal and Cencora (formerly known as AmerisourceBergen) have already agreed to pay state and local governments $21 billion to quash opioid-related claims in the largest national settlement over the epidemic to date.

That agreement also required the companies to create a clearinghouse to consolidate their opioid distribution data and make it available to states for use in anti-diversion efforts.