Drug Distributor Cardinal Marks $5.6 Billion for Opioid Suits

(Bloomberg) -- Cardinal Health Inc., one of the three major pharmaceutical distributors in the U.S., said it will put aside $5.6 billion for a potential settlement over the company’s alleged role in an epidemic of pain pill addiction that has resulted in tens of thousands of deaths.

States, cities, counties and their lawyers have been negotiating for months with each other and with the health-care companies they accuse of fueling the epidemic over a settlement that could eventually total in the tens of billions of dollars.

While they haven’t reached any deal, the drug makers and distributors that the governments have sued are beginning to note the legal risks on their balance sheets. The $5.6 billion that Cardinal is marking down is an accounting nod to a $18 billion, three-company settlement proposed by several states, not a guarantee of any final agreement.

The Dublin, Ohio-based company disclosed the charge in its quarterly results posted Thursday in a statement. The settlement proposal calls for the money to be paid over 18 years.

AmerisourceBergen Corp., another of the big three distributors, also reported quarterly results Thursday and declined to make any set-aside for a larger settlement, saying it was still litigating the cases. McKesson Corp., the third major distributor, has also declined not announced any set-aside. Drugmaker Johnson & Johnson announced a $4 billion accounting charge last month to prepare for a possible settlement.

For more details on Cardinal’s fiscal first-quarter results, click here. The company’s shares were up 4% in trading before the market opened in New York after the company beat analysts’ estimates of adjusted earnings per share.

To contact the reporter on this story: Drew Armstrong in New York at darmstrong17@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Cécile Daurat

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