Opioid Settlement Faces Objection From Attorneys General, WSJ Reports

Josh Nathan-Kazis Health ABC CAH JNJ MCK TEVA.TV AmerisourceBergen AmerisourceBergen Cardinal Health McKesson McKesson Johnson & Johnson Johnson & Johnson Teva Pharmaceutical Industries Teva Pharmaceutical Industries Pharmaceuticals Analgesics Legal Services Health Care/Life Sciences Business/Consumer Services Specialized Drugs/Medications Kåre Schultz Elizabeth Anderson Johnson Johnsons Schultz Teva Financial Performance Share Price Movement/Disruptions Corporate/Industrial News Content Types Factiva Filters C&E Exclusion Filter C&E Industry News Filter ABC CAH I/DRG I/XFFX JNJ M/CYC M/HCR MCK N/CNW N/DJN N/PFM N/WER TEVA TEVA.TV Barrons.com Barrons Blogs Wires Fortune 500 CODES_REVIEWED Companies Health Markets author Josh Nathan-Kazis author|Josh Nathan-Kazis topicid 8583 name Josh Nathan-Kazis extractedtext Josh Nathan-Kazis rank 1 codetype author code josh_nathan_kazis nameformat surname_first author Josh Nathan-Kazis id Josh Nathan-Kazis barrons_display_subject BARHEALTH barrons_display_subject|BARHEALTH canbedisplaysubject true codetype BARRONS_DISPLAY_SUBJECT name Health source MANUAL code BARHEALTH value BARHEALTH status modified co alchs co|alchs country US symbol ABC codetype co displayname AmerisourceBergen why occur extractedtext AmerisourceBergen source FACTIVA seoname amerisourcebergen name AmerisourceBergen countrycode US relevancerange low chartingsymbol STOCK/US/XNYS/ABC fcode alchs fullextractedtext AmerisourceBergen ticker ABC confidence 100 subcat com code alchs relevance 31 significance passing confidencerange high exchange NYSE exchangeisocode XNYS onlinesignificance passing-mention co formk co|formk country US symbol MCK codetype co displayname McKesson why occur extractedtext McKesson source FACTIVA seoname mckesson name McKesson countrycode US relevancerange low chartingsymbol STOCK/US/XNYS/MCK fcode formk fullextractedtext McKesson ticker MCK confidence 94 subcat com code formk relevance 27 significance passing confidencerange high exchange NYSE exchangeisocode XNYS onlinesignificance passing-mention co jonjon co|jonjon country US symbol JNJ codetype co displayname Johnson & Johnson why occur extractedtext Johnson & Johnson source FACTIVA seoname johnson_johnson name Johnson & Johnson relevancerange low chartingsymbol STOCK/US/XNYS/JNJ fcode jonjon fullextractedtext Johnson & Johnson confidence 100 subcat com code jonjon relevance 26 significance passing confidencerange high exchangeisocode XNYS onlinesignificance passing-mention co teviy co|teviy country US symbol TEVA.TV codetype co displayname Teva Pharmaceutical why occur extractedtext Teva Pharmaceutical Industries source FACTIVA seoname teva_pharmaceutical_industries name Teva Pharmaceutical Industries relevancerange low chartingsymbol STOCK/US/XNYS/TEVA fcode teviy fullextractedtext Teva Pharmaceutical Industries confidence 100 subcat com code teviy relevance 8 significance passing confidencerange high exchangeisocode XNYS onlinesignificance passing-mention co FORMK co|FORMK symbol MCK country US codetype co displayname McKesson extractedtext McKesson source MANUAL code mck name McKesson significance prominent exchange U.S.: NYSE exchangeisocode XNYS chartingsymbol STOCK/US/XNYS/MCK fcode FORMK status modified onlinesignificance passing-mention co ALCHS co|ALCHS symbol ABC country US codetype co displayname AmerisourceBergen extractedtext AmerisourceBergen source MANUAL code abc name AmerisourceBergen significance prominent exchange U.S.: NYSE exchangeisocode XNYS chartingsymbol STOCK/US/XNYS/ABC fcode ALCHS status modified onlinesignificance passing-mention co CDIST co|CDIST symbol CAH country US codetype co displayname Cardinal Health extractedtext Cardinal Health source MANUAL code cah name Cardinal Health significance prominent exchange U.S.: NYSE exchangeisocode XNYS chartingsymbol STOCK/US/XNYS/CAH fcode CDIST status modified onlinesignificance passing-mention co JONJON co|JONJON symbol JNJ country US codetype co displayname Johnson & Johnson extractedtext Johnson & Johnson source MANUAL code jnj name Johnson & Johnson significance prominent exchange U.S.: NYSE exchangeisocode XNYS chartingsymbol STOCK/US/XNYS/JNJ fcode JONJON status modified onlinesignificance passing-mention co TEVIY co|TEVIY symbol TEVA.TV country US codetype co displayname Teva Pharmaceutical Industries extractedtext Teva Pharmaceutical Industries source MANUAL code teva name Teva Pharmaceutical Industries significance prominent exchange U.S.: NYSE exchangeisocode XNYS chartingsymbol STOCK/US/XNYS/TEVA fcode TEVIY status modified onlinesignificance passing-mention company MCK company|MCK name McKesson significance PASSING-MENTION company ABC company|ABC name AmerisourceBergen significance PASSING-MENTION company CAH company|CAH name Cardinal Health significance PASSING-MENTION company JNJ company|JNJ name Johnson & Johnson significance PASSING-MENTION company TEVA.TV company|TEVA.TV name Teva Pharmaceutical Industries significance PASSING-MENTION djn ABC djn|ABC codetype djn why occur source FACTIVA code abc name ABC significance passing fcode ABC onlinesignificance passing-mention djn CAH djn|CAH codetype djn why occur source FACTIVA code cah name CAH significance passing fcode CAH onlinesignificance passing-mention djn MCK djn|MCK codetype djn why occur source FACTIVA code mck name MCK significance passing fcode MCK onlinesignificance passing-mention djn JNJ djn|JNJ codetype djn why occur source FACTIVA code jnj name JNJ significance passing fcode JNJ onlinesignificance passing-mention djn TEVA djn|TEVA codetype djn why occur source FACTIVA code teva name TEVA significance passing fcode TEVA onlinesignificance passing-mention djn TEVA.TV djn|TEVA.TV codetype djn why occur source FACTIVA code teva_tv name TEVA.TV significance passing fcode TEVA.TV onlinesignificance passing-mention djn I/DRG djn|I/DRG codetype djn why about source FACTIVA code i_drg name I/DRG significance prominent fcode I/DRG onlinesignificance prominent djn M/HCR djn|M/HCR codetype djn name M/HCR why lineage source FACTIVA code m_hcr fcode M/HCR djn M/CYC djn|M/CYC codetype djn name M/CYC why lineage source FACTIVA code m_cyc fcode M/CYC djn N/PFM djn|N/PFM codetype djn why about source FACTIVA code n_pfm name N/PFM significance prominent fcode N/PFM onlinesignificance prominent djn N/CNW djn|N/CNW codetype djn name N/CNW why lineage source FACTIVA code n_cnw fcode N/CNW djn I/XFFX djn|I/XFFX codetype djn why about source FACTIVA code i_xffx name I/XFFX significance prominent fcode I/XFFX onlinesignificance prominent djn N/DJN djn|N/DJN codetype djn name N/DJN source DJN-CONTROL code n_djn value N/DJN status modified inactivebydefault true djn N/WER djn|N/WER codetype djn name N/WER source DJN-CONTROL code n_wer value N/WER status modified inactivebydefault true first_publish_headline Opioid Settlement Faces Objection From Attorneys General, WSJ Reports first_publish_headline|Opioid Settlement Faces Objection From Attorneys General, WSJ Reports flow NWREGULAR flow|NWREGULAR codetype FLOW name Wires source MANUAL value NWREGULAR code NWREGULAR status modified flow Barrons.com flow|Barrons.com codetype FLOW name Barrons.com source MANUAL value Barrons.com code online status modified name Online title Product code Barrons.com flow Barrons Blogs flow|Barrons Blogs codetype FLOW source MANUAL title Product code Barrons_Blogs name Barrons Blogs value Barrons Blogs status modified headline Opioid Settlement Faces Objection From Attorneys General, WSJ Reports headline|Opioid Settlement Faces Objection From Attorneys General, WSJ Reports id facebook id|facebook news_tab_url https://www.barrons.com/articles/opioid-settlement-faces-objection-from-attorneys-general-wsj-reports-51581698614 idx xf500 idx|xf500 codetype idx why about source FACTIVA code xf500 name Fortune 500 significance prominent fcode xf500 onlinesignificance prominent in i835 in|i835 codetype in why about source FACTIVA code i835 name Legal Services significance prominent fcode i835 onlinesignificance prominent in i25782 in|i25782 codetype in why about source FACTIVA code i25782 name Analgesics significance prominent fcode i25782 onlinesignificance prominent in i257 in|i257 codetype in why about source FACTIVA code i257 name Pharmaceuticals significance prominent fcode i257 onlinesignificance prominent in i951 in|i951 codetype in name Health Care/Life Sciences why lineage source FACTIVA code i951 fcode i951 in ibcs in|ibcs codetype in name Business/Consumer Services why lineage source FACTIVA code ibcs fcode ibcs in idrugty in|idrugty codetype in name Specialized Drugs/Medications why lineage source FACTIVA code idrugty fcode idrugty media media-2 media|media-2 responsive layout wrap softcrop Horizontal imphotoid im-154662 location https://images.barrons.com/im-154662/?size=1.5 media media-1 media|media-1 softcrop Horizontal imphotoid im-154662 location https://images.barrons.com/im-154662/?size=1.5 ns c15 ns|c15 codetype ns why about source FACTIVA code c15 name Financial Performance significance prominent fcode c15 onlinesignificance prominent ns c1522 ns|c1522 codetype ns why about source FACTIVA code c1522 name Share Price Movement/Disruptions significance prominent fcode c1522 onlinesignificance prominent ns ccat ns|ccat codetype ns name Corporate/Industrial News why lineage source FACTIVA code ccat fcode ccat ns ncat ns|ncat codetype ns why lineage source FACTIVA code ncat name Content Types internalsymbol true fcode ncat ns nfact ns|nfact codetype ns why lineage source FACTIVA code nfact name Factiva Filters internalsymbol true fcode nfact ns nfce ns|nfce codetype ns why lineage source FACTIVA code nfce name C&E Exclusion Filter internalsymbol true fcode nfce ns nfcpin ns|nfcpin codetype ns why lineage source FACTIVA code nfcpin name C&E Industry News Filter internalsymbol true fcode nfcpin nwchain SB527704021182362942196045862029110571795341 nwchain|SB527704021182362942196045862029110571795341 pe Elizabeth Anderson pe|Elizabeth Anderson firstname Elizabeth lastname Anderson displayname Anderson, Elizabeth name Elizabeth Anderson extractedtext Elizabeth Anderson source FACTIVA codetype pe code elizabeth_anderson nameformat surname_first pe 91294 pe|91294 lastname Schultz codetype pe displayname Schultz, Kåre confidence 100 why occur extractedtext Kåre Schultz source FACTIVA code 91294 relevance 50 name Kåre Schultz significance passing firstname Kåre nameformat surname_first confidencerange high relevancerange low fcode 91294 onlinesignificance passing-mention pe Johnson pe|Johnson lastname Johnson codetype pe displayname Johnson extractedtext Johnson source FACTIVA code johnson name Johnson nameformat surname_first pe Johnsons pe|Johnsons lastname Johnsons codetype pe displayname Johnsons extractedtext Johnsons source FACTIVA code johnsons name Johnsons nameformat surname_first pe Schultz pe|Schultz lastname Schultz codetype pe displayname Schultz extractedtext Schultz source FACTIVA code schultz name Schultz nameformat surname_first pe Teva pe|Teva lastname Teva ticker TEVA codetype pe displayname Teva Pharmaceutical extractedtext Teva source FACTIVA code teva name Teva nameformat surname_first relay SYND relay|SYND codetype RELAY name Syndication source EXPANDER value SYND code synd status modified statistic CODES_REVIEWED statistic|CODES_REVIEWED name CODES_REVIEWED value CODES_REVIEWED codetype STATISTIC code CODES_REVIEWED subject BARCOMP subject|BARCOMP codetype SUBJECT title Companies code BARCOMP name Companies canbedisplaysubject true ruleid BARCOMP value BARCOMP status modified subject BARMKTS subject|BARMKTS codetype SUBJECT selectable true title Markets code BARMKTS name Markets canbedisplaysubject true ruleid BARMKTS value BARMKTS status modified subject BARHEALTH subject|BARHEALTH codetype SUBJECT title Health code BARHEALTH name Health canbedisplaysubject true ruleid BARHEALTH value BARHEALTH status modified wordcount 881 wordcount|881 Photograph by Eric Baradat/AFP via Getty Images Opioid Settlement Faces Objection From Attorneys General, WSJ Reports Opioid Settlement Faces Objection From Attorneys General, WSJ Reports Opioid Settlement Faces Objection From Attorneys General, WSJ Reports

Five major defendants said last fall that they had made progress, reaching a deal with four state attorneys general to give cash and free pharmaceuticals in return for a settlement. Now, segments of that deal seem to be facing serious trouble.

Opioid Settlement Faces Objection From Attorneys General, WSJ Reports

The state attorneys general want drug distributors McKesson, AmerisourceBergen, and Cardinal Health to pay more money than they would have paid under the framework agreement, according to the Wall Street Journal.

https://www.wsj.com/articles/21-states-reject-18-billion-offer-from-drug-wholesalers-to-settle-opioid-litigation-11581692527?mod=hp_lead_pos1 https://ncdoj.gov/wp-content/uploads/2019/10/OpioidFrameworkFactSheetv3.pdf?mod=article_inline https://www.barrons.com/articles/how-investors-could-pay-for-the-opioid-crisis-51569006234 https://www.barrons.com/articles/johnson-johnson-jnj-cuts-earnings-in-late-night-filing-on-opioid-settlement-51571930284 https://www.barrons.com/articles/teva-pharmaceutical-ceo-interview-51581544184 mailto:josh.nathan-kazis@barrons.com Opioid Settlement Faces Objection From Attorneys General, WSJ Reports By Josh Nathan-Kazis Photograph by Eric Baradat/AFP via Getty Images

The Wall Street Journal reported mid-morning that a group of 21 state attorneys general had written a joint letter rejecting a proposed deal between a handful of drug companies and a group of four state attorneys general that would have settled thousands of opioid cases.

The state attorneys general want drug distributors McKesson (ticker: MCK), AmerisourceBergen (ABC), and Cardinal Health (CAH) to pay more money than they would have paid under the framework agreement, according to the Journal.

States, counties, cities, and drug companies have been working for months toward global settlements that would end the thousands of lawsuits seeking to make companies pay for the opioid crisis. Those settlements have been elusive, however, due in part to the extraordinary complexity of the litigation.

Five major defendants said last fall that they had made progress, reaching a deal with four state attorneys general to give cash and free pharmaceuticals in return for a settlement. Questions lingered around the viability of the deal, however, with lawyers representing local governments that would need to sign saying from the beginning that they didn’t like aspects of it. Still, it was enough to give investors hope, and opioid defendant stocks were buoyed in the tail end of 2020.

Now, segments of that deal seem to be facing serious trouble. Under the terms of the framework, the three drug distributors had agreed to pay $18 billion in cash. The Journal report says that the 21 state attorneys general opposing the framework deal now say they want between $22 billion and $32 billion in total from the three companies.

Drug distributor stocks fell sharply after the Journal’s article was published, though recovered within minutes. Shares of AmerisourceBergen fell from $93.53 to $90.46 in the minutes after the article was published, but have since recovered, and the stock is now down 1% on the day as of 10:40 a.m. Shares of Cardinal Health also fell sharply, from $59.13 to $57.75, before recovering, and are down 0.7% on the day. McKesson shares dropped, too, but are now down 0.7% for the day.

“With the three distributor stock prices reacting to the news (down ~2%) and then rebounding, the market is shrugging [off] today’s update as part of the inevitable back and forth of negotiating a deal between the distributors and the state AGs,” wrote Evercore ISI analyst Elizabeth Anderson in a Friday morning note. “However, with the passing of time since the original expectation of an October settlement and the continued back and forth, we see a low probability that the settlement happens by this summer.”

The framework agreement also included Johnson & Johnson (JNJ), which had agreed to pay $4 billion, and Teva Pharmaceutical Industries (TEVA), which had agreed to pay $250 million, and to donate $23 billion worth of suboxone, which treats opioid addiction. The Journal article did not address whether the objection from the 21 state attorneys general extended to the proposed deals with Johnson & Johnsons and Teva.

A Teva spokesperson said that the company had no comment. Johnson & Johnson also did not have a comment on the Journal story. Shares of Johnson & Johnson did not appear to respond strongly to the report, though shares of Teva were down 4.2% as of 10:45 a.m.

On Wednesday, Teva’s CEO, Kåre Schultz, said that he hoped that the framework agreement would be finalized in the near term in an interview with Barron’s.

“I’m cautiously optimistic this will end up in a firm settlement,” Schultz said at the time. “There is still ongoing work happening between the defendants and the state attorneys general.”

That outcome now faces more questions.

In a statement, McKesson said it was “focused on finalizing a global settlement structure that would serve as the best path forward to provide billions of dollars in immediate funding and relief to states and local communities.” The company said it was prepared to “defend ourselves vigorously if the litigation progresses.”

AmeriSourceBergen said in a statement that it was disappointed that “some states do not currently understand the merits of the global settlement framework that the distributors have been discussing with the attorneys’ general over the past many months..” The company said it was committed to a negotiated resolution, but was also preparing for upcoming trials and defending itself in litigation.

In a statement sent after this article’s publication, a Cardinal Health spokesperson said: “We continue to work toward a nationwide settlement that would bring substantial and immediate relief to communities impacted by the opioid epidemic.”

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.