Opioid Distributors Can’t Shake $2.5 Billion Suit After Ruling

The three largest US opioid distributors must face a $2.5 billion lawsuit alleging they helped fuel a public health crisis in parts of West Virginia, after their victory at a trial was thrown out by a federal appeals court.

The 4th Circuit US Court of Appeals reversed a 2022 ruling that found McKesson Corp., Cardinal Health Inc. and AmerisourceBergen Corp., now called Cencora Inc., weren’t legally responsible for the addiction and overdose epidemic in the southwestern region of the state. The case turns on whether the companies created a so-called public nuisance in Cabell County, West Virginia, and its largest city, Huntington, where about 27% of the population lives below the poverty line.

“We hold that under West Virginia common law, the conditions resulting from the over-distribution of opioids can constitute a public nuisance,” a three-judge panel said in Tuesday’s decision.

Read More: Opioid Distributors Win Case Alleging They Fueled Drug Abuse

Across the US, the highly-addictive drugs were blamed for more than 500,000 deaths over two decades. States, cities and investors filed more than 4,000 lawsuits seeking to recoup monies spent battling the opioid epidemic and generated more than $50 billion in recoveries.

West Virginia was among the hardest-hit states in the opioid epidemic, with the overdose death rate for Cabell County being more than five times the national average during the period covered by the suit, according to researchers. West Virginia opted out of a settlement with the distributors in 2021, arguing it didn’t provide for their local governments still battling the scourge.

West Virginia recorded 770 overdose deaths statewide in the 12 months ending in April, according to the Centers for Disease Control and Prevention. That’s a 39% decline from April 2024.

The panel overruled US District Judge David Faber, who concluded three years ago that the local governments didn’t prove the distributors neglected to put in place “effective controls” to prevent opioids from being diverted to illegal uses.

A spokesperson for Cencora said the company is disappointed by the decision and is considering next steps, including “potentially seeking further appellate review of the 4th Circuit’s decision.”

Cencora continues “to believe Judge Faber correctly concluded AmerisourceBergen substantially complied with its obligations under the Controlled Substance Act,” the spokesperson said. “Distributors of pharmaceutical products are asked to walk a legal and ethical tightrope between providing access to necessary medications and acting to prevent diversion of controlled substances.”

Cardinal Health declined to comment. McKesson couldn’t immediately be reached for comment.

“We are looking forward to returning to the federal court to once again seek justice for those communities devastated by the opioid epidemic,” said Paul Farrell, one of the lawyers leading the opioid litigation for the West Virginia communities.

The local governments sought $2.5 billion to try to remedy the situation, claiming the distributors delivered more than 127 million painkillers to pharmacies in the county between 2006 and 2014.

West Virginia is considered “ground zero” for the opioid epidemic in the US, Senior Circuit Judge Barbara Milano Keenan wrote for the panel.

The appeals court found that the trial judge didn’t “properly assess whether the distributors’ actions caused numerous orders placed by pharmacies to evade being flagged as ‘suspicious.’”

The panel also found that Faber erred in concluding that state law didn’t allow him to order the companies to pay for the harm caused by a public nuisance.

“How can widespread harm to the general public be abated without some cost incurred or money spent?” according to the opinion.

To contact the reporters on this story:
Sabrina Willmer in Washington at swillmer2@bloomberg.net;
Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Sabrina Willmer, Peter Blumberg

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