A historic $300 million settlement is agreed to by top U.S. drug distributors; this should be an important development in accountability for the opioid epidemic.
Key Insights:
McKesson, Cardinal, and Cencora-three behemoths in the world of pharmaceutical distribution-will pay against claims linked to their responsibility in the overdose epidemic. These companies have already paid billions in restitution over allegations their practices contributed to the prolific supply of painfully addictive painkillers. The new settlement stems from litigation filed by health insurers and benefits plans, which claim they were unfairly forced to bear the costs of covering overprescribed opioids, as well as treatments for opioid use disorder.
Although the companies did not admit liability, this settlement was disclosed in federal court in Ohio pending judicial approval.
Deeper Analysis:
So, the opioid crisis started in the late 1990s with a proliferation of highly addictive yet deceptively marketed pain medications. As these powerful drugs saturated the market, millions became dependent-causing an avalanche of deaths. Specifically, the CDC estimated that since the beginning of the opioid crisis up until 2021, close to 645,000 Americans have died from opioid overdoses.
Suits have placed blame on everything from pharmaceutical manufacturers and distributors to pharmacies, and even healthcare providers, for their part in the flooding of the United States with opioids. To date, the lawsuits have resulted in settlements of roughly $50 billion.
The newest litigation, pushed forward by six benefit plans throughout states such as Ohio, Oklahoma, Michigan, and New York, asserts that insurance companies were coerced into absorbing financial costs from opioid overuse, everything from the pharmaceuticals themselves to downstream emergency medical care and long-term treatment for those afflicted with the condition of opioid use disorder.
Originally filed between 2017 and 2019, these cases were consolidated under the Northern District Court of Ohio, which has become the focal point for opioid-related legal actions. The negotiations that have resulted in this settlement have been ongoing since 2022.
It is expected that the settlement money will be divided among more than 40,000 health plans, from privately managed federal employee benefit programs to Medicaid and Medicare Advantage plans. Major governmental entities that had reached a separate settlement with the distributors, as expected, aside from major insurers such as UnitedHealth, Aetna, Elevance, Cigna, and Humana, are not part of this settlement.
Specifically, McKesson, Cardinal, and Cencora, doing business as AmerisourceBergen, settled for $21 billion in a landmark settlement led by state and local governments over their role in the opioid epidemic. The agreement reached included the development of a national opioid distribution data clearinghouse as the pathway for states to ramp up efforts at drug diversion prevention.
Frequently Asked Questions
Why was the $300M settlement awarded?
The settlement occurred due to lawsuits filed by various state and local governments against major drug distributors who played a role in perpetrating the opioid crisis through their negligent practices.
Where will the funds be allocated?
The settlement funds will go toward abatement programs for opioids, addiction treatments, and public health programs in the respective states and localities in order to minimize further damage.
Will this stop another opioid crisis in the future?
While the settlement is a good first step in trying to make things right, preventing a similar crisis from happening again will require sustained effort in solidifying regulations and making more considerate monitoring, along with greater awareness of the public.
What does the affected person do after being affected by the epidemic?
Individuals and communities affected by the opioid crisis should seek out resources for support, be it through treatment programs, community organizations, or any form of legal support they may be in need of.
How might the community continue to fight against the opioid crisis?
Communities can continue their fight against the opioid crisis through education, the facilitation of recovery programs, and further regulatory reforms and accountability in the pharmaceutical industry.