Two Drugmakers Settle Ahead Of Federal Cases

By Kelly Burch 08/23/19

Endo and Allergan will still face ongoing litigation with dozens of other municipalities.

drugmakers reaching a settlement
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Two drug makers have settled with two Ohio counties ahead of an upcoming federal opioid trial in Cleveland.

Endo International and Allergan will pay a combined $15 million in damages to Cuyahoga and Summit counties in Ohio. Both companies avoided admitting any wrongdoing. 

The settlement comes ahead of a landmark trial slated to start Oct. 21—which will hear arguments by local governments, Native American tribes and more from around the country alleging that the drug companies fueled the opioid crisis.

Right now, other major drug manufacturers and distributors including Purdue Pharma, Teva, Johnson & Johnson, McKesson, and AmerisourceBergen will still proceed to trial in the fall, according to STAT News

Although Endo settled, the company faces ongoing litigation with other municipalities, including more than 2,300 cases filed by counties and cities. 

The Deal

Endo’s deal with the Ohio counties indicates that the company could settle its suits globally for about $1.8 billion, according to FiercePharma. That’s lower than the $4 billion in settlements that was initially predicted for the company. One analyst said that the lower-than-expected settlement amount indicates that drug manufacturers may be “out of the woods.”

After the settlement was announced, Endo and other pharmaceutical stocks were trading higher, indicating that investors were pleased with the settlement amount. Although Allergan did not comment on the settlement, Matthew Maletta, Endo’s executive vice president and chief legal officer said that the agreement was a “favorable outcome.”

One analyst, John Leppard, said that the settlement amount from Endo was likely calculated based on what the company thought it would cost to go to trial. 

The agreement “appears designed only to spare Endo the expense of the bellwether trial, rather than satisfying their overall potential costs in a comprehensive resolution of government-related opioid claims with the approximately 2,000 cities and counties party to the multi-district litigation,” he wrote. “The cash portion of this settlement appears intended to reflect Endo’s estimated costs of having to participate in the bellwether trial itself, rather than their overall liability or culpability.”

In addition to the $10 million cash settlement, Endo agreed to provide the counties with up to $1 million of the drugs Vasostrict and Adrenalin free of charge. Vasostrict is a hormone used to treat diabetes, blood pressure and other conditions. Adrenalin is used in EpiPens. 

The settlement could be an indication of the amounts that other pharmaceutical companies may settle for ahead of thousands of other upcoming lawsuits. 

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Kelly Burch writes about addiction and mental health issues, particularly as they affect families. Follow her on TwitterFacebook, and LinkedIn.