Dive Brief:

• Healthcare supplies manufacturer Cardinal Health and fellow drug distributors McKesson and AmerisourceBergen have agreed to pay a combined $215 million to Cuyahoga and Summit counties in Ohio to settle a federal lawsuit alleging the companies encouraged overprescribing of opioid painkillers. Separately, ​Teva Pharmaceuticals settled cases with the county by agreeing to pay $20 million over three years and donating $25 million worth of addiction treatment Suboxone.
• The settlement, first reported by The Wall Street Journal, came after the presiding judge invited the parties to a negotiating session starting on Friday. Walgreens Boots Alliance, another defendant in the case, has not agreed to a settlement.
• The Ohio case, the first to be tried in a U.S. federal court, is viewed as a bellwether for other pending cases across the country as municipalities seek to recoup the law enforcement, emergency response and healthcare costs resulting from opioid addiction and overdoses.

Dive Insight:

In a joint press release published late Monday morning, the three drug distributors announced they will pay $215 million to the two counties. The New York Times and Washington Post reported the presiding judge announced in the courtroom Monday morning that a deal had been struck overnight.

Teva, which later confirmed the settlement independently, will pay $20 million over two years and provide $25 million in free addiction-fighting drugs. The Israel-based generics company also offered on Monday to donate $23 billion worth of Suboxone and pay another $250 million to reach a global settlement deal with the thousands of plaintiffs pushing forward claims. 

Walgreens has not settled, but its trial has been delayed.

Teva was the last pharmaceutical manufacturer to remain subject to the lawsuit. Allergan, Endo International, Johnson & Johnson and Mallinckrodt had all settled in previous months. J&J's agreement was the most recent, with the New Jersey-based company paying $20.4 million to be excused from the courtroom. 

The agreement potentially sets the stage for a larger, national deal with multiple states and municipalities that would relieve the courts of the burden of trying potentially hundreds of cases. That deal has been valued at as much as $50 billion.

"While the companies strongly dispute the allegations made by the two counties, they believe settling the bellwether trial is an important stepping stone to achieving a global resolution and delivering meaningful relief," the drug distributors stated in their press release.

In an Oct. 17 note to clients, RBC Capital Markets analyst Randall Stanicky wrote that Teva could have $4.9 billion worth of liability in opioid-related lawsuits, the most of any company in the biopharma sector. All told, pharma manufacturers could have as much as $62 billion at stake, he wrote.

Cardinal Health will host an earnings call to discuss first quarter financial results Nov. 7.