Distributors Announce Proposed Opioid Settlement Will Proceed to Next Phase

Rhea-AI Summary

AmerisourceBergen (ABC), Cardinal Health (CAH), and McKesson (MCK) announced progress on the opioid claims settlement involving U.S. states and territories. As of August 21, 2021, 42 states, 5 territories, and Washington, D.C. have joined the settlement, allowing the process to move forward. This next phase includes a 120-day period for political subdivisions to join, ending January 2, 2022. If enough subdivisions participate, the settlement will take effect 60 days after that. The companies aim to focus on secure medication delivery while providing relief to affected communities.

Positive

• 42 out of 49 states, all 5 territories, and Washington, D.C. have joined the settlement, indicating broad support.
• The settlement framework is designed to expedite relief to affected communities.

Negative

• The settlement process may not resolve all claims.
• Legal disputes related to opioid distribution could continue, leading to potential financial losses.

CONSHOHOCKEN, Pa. & DUBLIN, Ohio & IRVING, Texas--(BUSINESS WIRE)-- AmerisourceBergen (NYSE: ABC), Cardinal Health (NYSE: CAH) and McKesson (NYSE: MCK) announced today that, under the previously announced proposed settlement agreement and process designed to resolve the opioid claims of state and local governmental entities, they have determined that enough states have agreed to settle to proceed to the next phase. Under the proposed settlement agreement and process, all U.S. States, territories, and Washington DC were given 30 days to join the settlement, except West Virginia which settled previously with the companies. As of August 21, 2021, 42 out of 49 states, all 5 territories and Washington DC had affirmatively signed on to the agreement.

This next phase is notice to the subdivisions, and the subdivision sign-on period. During this phase, each participating state will offer its political subdivisions, including those that have not sued, the opportunity to participate in the settlement for an additional 120-day period, which ends January 2, 2022. After the conclusion of the political subdivision sign-on period, each company will independently determine whether a sufficient number of political subdivisions have joined for the settlement to proceed to implementation.

If the conditions are satisfied, the settlement would become effective 60 days after the distributors determine that there is sufficient participation to proceed. During this 60-day period, the participating states and the distributors would cooperate to obtain consent judgments in each participating state embodying the terms of the settlement. The companies will make their first annual settlement payment into escrow on or before September 30, 2021, and the payment will be disbursed following the effective date or returned to distributors if the settlement does not become effective. The final payment amount will depend on several factors, including the final participation rate of states and political subdivisions.

The companies believe that this settlement framework will allow them to focus their attention and resources on the safe and secure delivery of medications and therapies while expediting the delivery of meaningful relief to affected communities.

Cautionary Statements Regarding Forward Looking Statements

The preceding descriptions of a potential resolution of certain governmental entities’ opioids-related claims against pharmaceutical distribution companies constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that involve risks and uncertainties that could cause actual results to differ materially from those in those statements. It is not possible to identify all such risks and uncertainties. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are first made. Except to the extent required by law, the companies undertake no obligation to publicly update forward-looking statements. Risk factors include, but are not limited to: the settlement process may not result in a resolution of all or any claims against each company regarding its role in distributing opioids; the companies may continue to experience costly and disruptive legal disputes and settlements related to distribution of controlled substances, including opioids; the companies might experience losses not covered by insurance; and the companies might be adversely impacted by changes in tax legislation or challenges to their respective tax positions. Investors should read the important risk factors described in each company’s Form 10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange Commission.

About AmerisourceBergen

AmerisourceBergen fosters a positive impact on the health of people and communities around the world by advancing the development and delivery of pharmaceuticals and healthcare products. As a leading global healthcare company, with a foundation in pharmaceutical distribution and solutions for manufacturers, pharmacies and providers, we create unparalleled access, efficiency and reliability for human and animal health. Our 41,000 global team members power our purpose: We are united in our responsibility to create healthier futures. AmerisourceBergen is ranked #8 on the Fortune 500 with more than $200 billion in annual revenue. Learn more at investor.amerisourcebergen.com.

About Cardinal Health

Cardinal Health is a distributor of pharmaceuticals, a global manufacturer and distributor of medical and laboratory products, and a provider of performance and data solutions for health care facilities. With 50 years in business, operations in more than 35 countries and approximately 44,000 employees globally, Cardinal Health is essential to care. Information about Cardinal Health is available at cardinalhealth.com.

About McKesson Corporation

McKesson Corporation is a global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information solutions. McKesson partners with pharmaceutical manufacturers, providers, pharmacies, governments and other organizations in healthcare to help provide the right medicines, medical products and healthcare services to the right patients at the right time, safely and cost-effectively. United by our ICARE shared principles, our employees work every day to innovate and deliver opportunities that make our customers and partners more successful - all for the better health of patients. McKesson has been named a “Most Admired Company” in the healthcare wholesaler category by FORTUNE, a “Best Place to Work” by the Human Rights Campaign Foundation, and a top military-friendly company by Military Friendly. For more information, visit www.mckesson.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210904005012/en/

AmerisourceBergen

Investor Contact:

Bennett S. Murphy

610-727-3693

bmurphy@amerisourcebergen.com

Media Contact:

Gabe Weissman

610-727-3696

gweissman@amerisourcebergen.com

Cardinal Health

Investor Contact:

Kevin Moran

614-757-7942

kevin.moran@cardinalhealth.com

Media Contact:

Erich Timmerman

614-757-8231

Erich.Timmerman@cardinalhealth.com

McKesson

Investor Contact:

Holly Weiss

972-969-9174

Holly.Weiss@McKesson.com

Media Contact:

David Matthews

214-952-0833

David.Matthews@McKesson.com

Source: AmerisourceBergen

FAQ

What is the latest update on the opioid claims settlement for AmerisourceBergen (ABC), Cardinal Health (CAH), and McKesson (MCK)?

As of August 21, 2021, 42 states, 5 territories, and Washington, D.C. have joined the opioid claims settlement initiated by ABC, CAH, and MCK.

What is the deadline for political subdivisions to join the opioid settlement?

The deadline for political subdivisions to join the opioid settlement is January 2, 2022.

When will the first annual settlement payment occur for the opioid claims settlement?

The first annual settlement payment will occur on or before September 30, 2021.

What could impact the effectiveness of the opioid claims settlement for ABC, CAH, and MCK?

The effectiveness of the opioid claims settlement depends on sufficient participation from political subdivisions and may be impacted by ongoing legal disputes.