The nation’s three largest drug distributors – McKesson Corp, Cardinal Health Inc, and Cencora Inc – recently agreed to pay $300 million to health plans to settle lawsuits over their role in the opioid epidemic. The lawsuits resolved by this settlement were those brought by private benefit plans that provide health and welfare benefits to members and their families, including reimbursement for some or all of the costs of prescription opioids on their approved formularies and for resulting medical claims, such as OUD treatment and emergency room visits.
The lawsuits brought by the health plans alleged that the companies made it easier for patients to access addictive pain medication, arguing that the companies forced insurers and benefit plans to cover medications that were overprescribed in lieu of safer, non-addictive, and lower-cost prescription drugs, along with treatment for their members with opioid use disorder that they would not have otherwise had to pay.
While the health plans believe that their case is strong, “almost all class actions involve a high level of risk, expense, and complexity, which is at least in part why judicial policy so strongly favors resolving class actions through settlement.”
The Class Members’ claims will be paid under the settlement “pursuant to a fair and equitable Plan of Allocation, developed by a preeminent expert familiar with the opioids litigation, and which takes into account the impact of opioids consistent with prior opioids settlements.”
The $300 million would be paid 38.1% by McKesson, 30.9% by Cardinal, and 31% by Cencora (formerly known as AmerisourceBergen). This recent settlement is in addition to $21 billion already paid by the three companies, resolving claims by state and local governments where the companies were alleged to have insufficient controls that allowed large amounts of addictive painkillers to be diverted to illegal channels.
The distributors do not admit to any wrongdoing as part of the settlement. The settlement is pending judicial approval.