Summary
Cardinal Health, Inc. (CAH) has announced a significant development regarding its involvement in a nationwide settlement to resolve a substantial majority of opioid lawsuits. The company, along with two other major pharmaceutical distributors, has reached an agreement to settle claims filed by states and local governmental entities. This settlement, which is expected to become effective on April 2, 2022, marks a crucial step in addressing the ongoing opioid litigation that has impacted the company and its peers. The financial implications for Cardinal Health include a commitment to pay up to $6.0 billion over an 18-year period. A significant portion of these payments, at least 85%, will be directed towards remediation efforts for the opioid epidemic. The agreement also incorporates injunctive relief measures focused on strengthening the distributors' controlled substance anti-diversion programs, with oversight and data aggregation initiatives to be implemented. This settlement aims to provide a pathway to resolving a major overhang for the company.
Key Highlights
- 1Cardinal Health and two other national pharmaceutical distributors have entered into a material definitive agreement for a nationwide opioid lawsuit settlement.
- 2The settlement will resolve a substantial majority of opioid lawsuits filed by states and local governmental entities.
- 3Cardinal Health's payment commitment is up to $6.0 billion over 18 years.
- 4A minimum of 85% of settlement payments must be used by settling entities for opioid epidemic remediation.
- 5The agreement includes injunctive relief related to controlled substance anti-diversion programs, including a monitor and a data clearinghouse.
- 6The settlement is anticipated to become effective on April 2, 2022.
- 746 out of 49 eligible states, plus Washington D.C. and all eligible U.S. territories, have agreed to join the settlement.