Summary
Cencora, Inc. (formerly AmerisourceBergen Corporation) announced a significant development in its legal landscape through a Material Definitive Agreement filed on February 25, 2022. The Company, along with two other major pharmaceutical distributors, has reached a settlement totaling approximately $19.5 billion over 18 years to resolve a substantial majority of opioid-related lawsuits filed by U.S. states, territories, and local governmental entities. Cencora's portion of this settlement amounts to up to $6.1 billion, reflecting its 31% share. This settlement is designed to address the widespread litigation stemming from the opioid epidemic. A minimum of 85% of the settlement payments will be allocated by governmental entities towards remediating the opioid crisis. The agreement also includes the establishment of a data clearinghouse by the distributors to aid in anti-diversion efforts. Importantly, the settlement allows the distributors to proceed without admitting liability or wrongdoing. The effective date for the settlement is April 2, 2022, contingent upon court approvals and other conditions being met. While this settlement resolves a significant portion of claims, it is important to note that it may not cover all governmental entity claims, and the Company anticipates potential ongoing legal disputes.
Key Highlights
- 1Cencora (formerly AmerisourceBergen) to pay up to $6.1 billion as part of a $19.5 billion settlement to resolve the majority of U.S. state and local opioid-related lawsuits.
- 2Settlement spans 18 years, with an effective date of April 2, 2022, subject to court approval and other conditions.
- 3A minimum of 85% of settlement funds must be used for opioid epidemic remediation by governmental entities.
- 4Distributors will establish a controlled-substance data clearinghouse for anti-diversion efforts by settling states.
- 5The settlement explicitly states that the distributors do not admit liability or wrongdoing.
- 6Forty-six out of 49 eligible states, the District of Columbia, and all eligible territories have agreed to join the settlement.
- 7Separate settlement arrangements, such as the one with West Virginia, are not included in this broad agreement.