The first federal trial to emerge from the US opioid crisis looks set to go ahead on Monday after last-minute talks to reach a multibillion-dollar settlement faltered on Friday evening.
The County Executives of America, which represents hundreds of local governments pursuing opioid makers and distributors for their alleged role in the epidemic, said the settlement proposals offered were “severely inadequate”. Accusing the defendants of “countless attempted delays and diversions”, the organisation praised the judge for allowing the trial to go forward.
“Now it’s time, through the bellwether trial for Summit and Cuyahoga counties, to shed light on the actions of the remaining opioid defendants in that litigation [that is] opioid distributors and a manufacturer — in the first federal trial that begins on Monday,” it said in a statement.
Opioid makers and distributors are facing mass litigation from US states, counties, and cities seeking to recoup some of the costs of the crisis, which has led to mounting healthcare and law enforcement bills. Two million Americans are suffering from opioid use disorder, according to the Center for Disease Control, and the outbreak of overdoses has contributed to a drop in US life expectancy.
The companies, which all deny responsibility for the crisis, did not respond to requests for comment.
Shares in the defendants fell in after-hours trading in New York. Teva Pharmaceuticals, the only remaining manufacturer, fell 1.6 per cent to $7.38, after losing 3.5 per cent during the trading day. Drug distributor stocks also dropped: Cardinal Health lost 3 per cent to $50.02, McKesson fell 3.1 per cent to $147.56, and AmerisourceBergen was down 1 per cent to $89.64.
Other opioid makers were also brought lower by the news. Even though they have settled the cases with these particular bellwether counties in Ohio, they face other lawsuits related to the crisis.
Endo International, which settled these cases for about $10m, was down 2.4 per cent to $4.76, and Mallinckrodt, which settled the two cases for about $30m, fell 3 per cent to $2.66. Johnson & Johnson, which settled with the two counties for $10m, was up slightly after-hours, after losing 6 per cent to $127.70 during the day, due to investor concerns about a recall of one batch of its talcum powder.
Judge Dan Polster met with executives from the defendants on Friday, in an attempt to form a deal before the trial starts on Monday. The Wall Street Journal reported earlier in the week that the distributors had offered about $18bn to settle, while The New York Times said the deal would include the distributors, Teva and Johnson & Johnson, and would be worth about $50bn in cash and addiction treatments.
As well as the total value of the deal, the sides have been debating over what period the payments should be made and the split between cash and in-kind payments.
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