Baltimore to take drug distributors to trial over opioids
Adds comment from Cencora in paragraph 4
By Brendan Pierson
Sept 16 (Reuters) -The city of Baltimore is scheduled to go to trial this week in its $11 billion lawsuit accusing drug distributors McKesson MCK.N and Cencora COR.N of fueling an epidemic of opioid addiction and overdose deaths.
The city, which has been especially hard hit by the opioid crisis, opted out of large national opioid settlements in recent years. It's now hoping it can win more money by taking companies to court on its own. Jury selection is expected to begin on Monday in the Circuit Court for Baltimore City, Maryland.
The city accuses Cencora, formerly called AmerisourceBergen, and McKesson of ignoring red flags that opioids they supplied were being diverted into illegal channels. It says the companies must pay the cost of addressing the crisis.
Cencora said in a statement that it "does not determine the supply of the medications it distributes, nor do we impact demand for those medications." It said it distributed opioids to fill prescriptions by doctors, and that it reported suspicious orders to U.S. authorities.
McKesson did not immediately respond to a request for comment.
Baltimore had also been prepared to take drugmaker Johnson & Johnson's JNJ.N Janssen to trial over claims that it concealed the risk of addiction when it marketed its relatively little-used, now discontinued opioid drugs Duragesic and Nucynta, but settled over the weekend, according to a court filing on Sunday.
Terms of the settlement were not disclosed. J&J, which has denied the allegations, declined to comment.
Baltimore is one of more than 3,000 local, Native American tribal and state governments across the country that have filed similar lawsuits against drugmakers, distributors and pharmacies over the opioid crisis. The vast majority of those cases have been settled through nationwide agreements, which now total about $46 billion.
In 2022, Baltimore recorded 904 opioid overdose deaths, out of a total population of about 569,000, while the national opioid overdose death rate was about 25 per 100,000.
GOING SOLO
The city joined some other hard-hit jurisdictions around the country in opting out of the national deals. It has already reached its own settlements with several companies ahead of the trial, most recently with pharmacy operator Walgreens WBA.O and drugmaker Teva TEVA.TA, totaling $402.5 million.
Opting out has both potential upside and risk.
San Francisco obtained a $230 million settlement from Walgreens after beating it at trial, which it said was the largest for any local government. West Virginia, another opt out, secured about $1 billion in opioid settlements, a larger recovery per capita than any other state.
The city of Huntington, West Virginia, and its county, however, lost their trial against McKesson, Cencora and distributor Cardinal Health CAH.N after a judge rejected their public nuisance claims, which are similar to Baltimore's. That means they will receive no money from the distributors if they do not get the verdict overturned on appeal.
McKesson supplied about half of Baltimore's opioids between 2006 and 2019, according to U.S. government data. In 2017, it reached a $150 million settlement with the U.S. Department of Justice, under which it admitted that it had failed in its duty to prevent illegal drug sales nationwide.
Judge Lawrence Fletcher-Hill, who will be presiding over this week's trial, has ruled that jurors will be allowed to hear about that deal.
Cencora is also currently facing a civil lawsuit by the Justice Department over its alleged role in the opioid crisis.
More than 800,000 people in the United States died of opioid overdoses from 1999 through 2023, according to data from the U.S. Centers for Disease Control and Prevention.
The case is Mayor and City Council of Baltimore v. Purdue Pharma et al, Circuit Court of Maryland for Baltimore City, No. 24-C-18-000515.
For Baltimore: Bill Carmody of Susman Godfrey
For J&J: Steve Brody of O'Melveny & Myers and Mike Brown of Nelson Mullins
For McKesson: Tim Hester and Chris Eppich of Covington & Burling
For Cencora: Anne Bohnet of Reed Smith
Read more:
Baltimore settles with Teva, Walgreens ahead of scheduled opioid trial
McKesson in record $150 million U.S. settlement over suspicious drug orders
U.S. sues AmerisourceBergen, says distributor helped ignite opioid epidemic
Top law firms in US opioid lawsuits to get hundreds of millions in fees
First drop in overdose deaths in 6 years, US preliminary data shows
(Reporting By Brendan Pierson in New York)
</body></html>Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
