Last month, 3 major drug distributors agreed to pay $300 million in a class action settlement, answering for each company’s role in fueling the US opioid epidemic. Despite not admitting wrongdoing, the companies are expected to facilitate the resolution upon judge’s approval, with McKesson, Cardinal Health, and Cencora taking responsibility for 38.1%, 30.9%, and 31% of the total $300 million lawsuit, respectively, Reuters reported.1
According to a previous Reuters article, the recent $300 million lawsuit will be added on top of a 2022 agreement to settle $26 billion between multiple drug distributors and state and local governments. Along with McKesson, Cardinal Health, and Cencora, this settlement also included Johnson & Johnson.2
With several lawsuits being settled as of late, federal and local governments are beginning to allocate responsibility to specific parties—mainly drug distributors—for the ongoing opioid epidemic in the US.
Key Takeaways
- McKesson, Cardinal Health, and Cencora agreed to pay $300 million in a class action settlement, without admitting wrongdoing, for their roles in fueling the US opioid epidemic.
- More specifically, companies are answering for overprescribing and overmarketing opioid medications, as well as leading beneficiaries to suffering variations of opioid use disorder.
- This lawsuit comes just 2 years after the same 3 companies, plus Johnson & Johnson, agreed to pay states and local governments $26 billion between the 4 parties.
Regarding the August 2024 settlement, litigation support consultant Meredith Rosenthal, MD, Health and Policy Professor at Harvard University, played a significant role in identifying the reasoning behind drug distributors’ responsibility for issues fueling the epidemic. She further explained how distributors forced health benefit payors to back their patients into a corner regarding opioid prescriptions.
“A fixed settlement to compensate [third party payors (TPPs)] for overcharges related to opioid marketing should be allocated in a way that reflects the relative burden of opioid overuse borne by individual TPPs. This relative burden can be approximated by comparison of TPPs’ estimated spending on opioids and the health care sequelae of opioid addiction (e.g., emergency department visits for opioid overdose),” said Rosenthal, according to the court filing.3
Unlike the 2022 agreement, resolved between distributors and local governments, this settlement involved the 3 drug distributors’ involvement with health insurers and benefit plans. Plaintiff lawyer Paul Geller further elaborated on how funds were “largely paid for the overprescribed and overmarketed pills and for the treatment required when their plan beneficiaries inevitably suffered opioid use disorder.”1
As the opioid epidemic within the US has been gradually exacerbated over the last 30 years, settlements between states and local governments—and now health insurers—with drug distributors have been one of the few moves in a positive direction to stunting the growth of the epidemic.
READ MORE: City of Boston Sues Major PBMs Over Role in Opioid Crisis
“In the 1990s, the intensified marketing of newly reformulated prescription opioid medications (e.g., OxyContin) and an influential pain advocacy campaign that encouraged greater pain management led to a precipitous rise in opioid use in the United States. Research from the Centers for Disease Control and Prevention (CDC) shows that prescription opioid sales in the United States quadrupled from 1999 to 2010. At the same time, opioid misuse and opioid-involved overdose deaths increased,” according to the Congressional Research Service.4
