Distributors Announce Proposed Opioid Settlement Agreement
While the companies strongly dispute the allegations made in these lawsuits, they believe the proposed settlement agreement and settlement process it establishes, which is outlined below, are important steps toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities across
The proposed settlement agreement is the result of years of negotiation with state attorneys general and representatives of the subdivisions. If the proposed settlement agreement and settlement process leads to final settlement through the process outlined below, it would collectively provide thousands of communities across
Subject to certain future milestones described below and the level of participation, the companies would be responsible for up to the following contributions, payable over 18 years:
AmerisourceBergen: $6.4 billion
Cardinal Health: $6.4 billion
The proposed settlement agreement would become binding only if all conditions outlined below are satisfied:
Approval of State and
For the next 30 days, all
Approval of Political
If the distributors decide that sufficient states have joined, each participating state will continue to offer its political subdivisions, including those that have not sued, the opportunity to participate in the settlement for an additional 120-day period. After the conclusion of the political subdivision sign-on period, each company will independently determine whether a sufficient number of states and a sufficient number of political subdivisions have joined for the settlement to proceed to implementation.
If the conditions are satisfied, the settlement would become effective 60 days after the distributors determine that there is sufficient participation to proceed. During this 60-day period, the participating states and the distributors would cooperate to obtain consent judgments in each participating state embodying the terms of the settlement. The companies will make their first annual settlement payment into escrow on or before
If, however, a settlement cannot be finalized and plaintiffs instead choose to pursue their claims in court, the companies will continue to assert their strong legal defenses in pending litigation.
This settlement process only addresses the claims of
Cautionary Statements Regarding Forward Looking Statements
The preceding descriptions of a potential resolution of certain governmental entities’ opioids-related claims against pharmaceutical distribution companies constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that involve risks and uncertainties that could cause actual results to differ materially from those in those statements. It is not possible to identify all such risks and uncertainties. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are first made. Except to the extent required by law, the companies undertake no obligation to publicly update forward-looking statements. Risk factors include, but are not limited to: the settlement process may not result in a resolution of all or any claims against each company regarding its role in distributing opioids; the companies may continue to experience costly and disruptive legal disputes and settlements related to distribution of controlled substances, including opioids; the companies might experience losses not covered by insurance; and the companies might be adversely impacted by changes in tax legislation or challenges to their respective tax positions. Investors should read the important risk factors described in each company’s Form 10-K, Form 10-Q and Form 8-K reports filed with the