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LI firm Henry Schein will be dismissed from Ohio opioid case

Henry Schein headquarters in Melville, seen on March

Henry Schein headquarters in Melville, seen on March 28, 2018. The company announced Monday that a plaintiff in an opioid litigation in Ohio has agreed to dismiss Henry Schein as a defendant.  Credit: Barry Sloan

Long Island-based medical products distributor Henry Schein Inc. will be dismissed from a federal opioid lawsuit in Ohio and other defendants reached settlements worth $260 million, it was announced Monday.

The agreements avert a trial to consider lawsuits filed by Ohio's Cuyahoga and Summit counties, but do not resolve more than 2,600 other lawsuits nationwide. The trial was scheduled to open Monday.

Henry Schein Inc. will make a $1 million donation to establish an educational foundation with Summit County to develop “best practices regarding the proper use and prescription of opioids,” the Melville company said in a statement. 

The company also will pay $250,000 in expenses to Summit County; Akron is the county seat.  

The Summit County case against Henry Schein was dismissed "with prejudice," meaning it cannot be reopened. The company was not named in the Cuyahoga County case.

Shares of Henry Schein rose 0.1 percent to close Monday at $62.90.

Distributors AmerisourceBergen, Cardinal Health and McKesson will pay a combined $215 million and drugmaker Teva is to contribute $20 million in cash and $20 million worth of suboxone, a drug used to treat opioid addition, according to a lawyer for Cuyahoga County.

Pharmacy chain Walgreens is the only defendant left in the case. Walgreens and other pharmacies will have six months to reach settlements or face a trial, according to the new agreement.

In a government filing Monday, Henry Schein said sales of opioids accounted for less than one-tenth of 1 percent of its $9.4 billion in sales from continuing operations in 2018.

The "vast majority" of opioids sold in 2018 were administered through injections in the offices of dentists and physicians, according to the filing.

Henry Schein is the largest public company by revenue on Long Island, where the opioid epidemic has claimed about 3,700 lives from 2010 through 2018, according to estimates by medical examiners and law enforcement agencies. The nonprofit Fiscal Policy Institute estimates the opioid crisis is costing the region $8 billion a year in medical costs, lost worker productivity and economic losses.

The lawsuit, scheduled to be heard before the U.S. District Court for the Northern District of Ohio, alleged that Henry Schein Inc. and other companies mounted a "false advertising campaign" to expand the market for opioids and that those companies reaped financial rewards by failing "to monitor appropriately and restrict" the drugs' distribution, according to a summary of the case in a Securities and Exchange Commission filing by Henry Schein. Court papers filed by Henry Schein in January denied that the company "made deliberate efforts to evade restrictions on opioid distribution or acted without regard for life."

In a 34-page response to the lawsuit, the company also denied that it delivered opioids for "illicit use."

OxyContin maker Purdue Pharma LP and several other pharmaceutical manufacturers were dropped from the case after reaching settlements. Purdue Pharma reached a tentative national settlement last month that could be worth up to $12 billion over time. But half the states and hundreds of local governments oppose it. 

"The opioid crisis is a terrible national tragedy, and all segments of society need to come together to address the crisis," Henry Schein chairman and CEO Stanley M. Bergman said in a statement Monday, adding, "We look forward to playing a constructive role in helping to advance solutions that put an end to opioid addiction."

 The Ohio case is considered a legal bellwether to signal how rulings might go in other cases in federal court, so it's been closely watched by the drug industry and patient advocates.

The heart of most opioid lawsuits is a claim that drug companies improperly marketed the powerful painkillers to doctors and other prescribers, overselling the benefits and understating the risks of a class of drugs long linked to addiction. In the only opioid crisis case to go to trial so far in state court, an Oklahoma judge ruled against Johnson & Johnson and ordered the company to pay $572 million in damages.

The National Institute on Drug Abuse estimates that prescription opioid abuse in the United States represents an economic burden of $78.5 billion a year. 

The federal agency said the crisis, which hit the Midwest particularly hard, was fueled by pharmaceutical companies' assurances to the medical community in the late 1990s that patients would not become addicted to the prescription opioid pain relievers.

More than 47,000 Americans died in 2017 as a result of the abuse of prescription and nonprescription opioids, including heroin and fentanyl, according to the agency.

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