Cardinal Health, AmerisourceBergen book billions in opioid settlement-related charges

(Reuters) - Drug distributors AmerisourceBergen Corp and Cardinal Health Inc on Thursday reported $7.62 billion in new charges between them related to talks to resolve thousands of lawsuits alleging they helped fuel the U.S. opioid epidemic.

The news came after rival McKesson Corp on Tuesday disclosed it and the other two distributors could be expected to pay up to $21 billion over 18 years under a new settlement proposal by state attorneys general.

AmerisourceBergen recorded a $6.6 billion charged related to the litigation. Cardinal said it took a pre-tax charge of $1.02 billion, which was on top of a $5.63 billion charge it incurred last year following an earlier settlement proposal.

The three drug distributors in October 2019 proposed paying a combined total of $18 billion to resolve the roughly 3,200 lawsuits, with drugmaker Johnson & Johnson paying another $4 billion.

That proposal, part of a settlement framework negotiated with four state attorneys general, met resistance from lawyers for local governments and several states, leading to further talks. J&J said last month it would now pay $5 billion.

“We take comfort from our belief that settlement funds will be used in support of initiatives to combat the opioid epidemic, to increasing rehabilitation, mental health and other important efforts,” AmerisourceBergen CEO Steven Collis told analysts.

The lawsuits, largely filed by states, counties and cities, seek to hold the companies responsible for an opioid addiction epidemic that according to U.S. government data resulted in 450,000 overdose deaths from 1999 to 2018.

The lawsuits accuse drugmakers of deceptively marketing opioids and distributors of ignoring red flags indicating the prescription painkillers were being diverted for improper uses. They deny wrongdoing.

Paul Hanly, a lawyer for many local governments, said the plaintiffs’ executive committee that is steering the federal opioid lawsuits “fully supports” the proposed settlement.

Reporting by Nate Raymond in Boston and Ankur Banerjee in Bengaluru; Editing by Shinjini Ganguli and DIane Craft