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Four Drug Companies Reach Last-Minute Settlement in Opioid Litigation

*McKesson, AmerisourceBergen, Cardinal Health Settle Two Ohio Opioid Cases for $215 Million — Plaintiff Attorney

*Teva Settles Ohio Opioid Cases for $20 Million Cash, $25 Million in Donated Addiction-Treatment Drugs

*Walgreens Trial Postponed in Ohio

*Attorneys Continue Working Toward Larger, Global Settlement of Thousands of Opioid Lawsuits

(Article below will update)

CLEVELAND—Four drug companies have reached a settlement at the last minute to avoid a trial here seeking to blame them for fueling the opioid crisis, according to people familiar with the matter.

Details of the settlements with

McKesson Corp.

,

Cardinal Health Inc.,

AmerisourceBergen Corp.

and

Teva Pharmaceutical Industries Ltd.

will be announced Monday morning, the people said.

A fifth defendant,

Walgreens Boots Alliance,

hadn’t yet reached a deal Monday morning. It wasn’t clear if Monday’s trial would proceed with Walgreens as the only defendant.

The settlements with two Ohio counties put off the federal jury trial for the companies but fall short of a more comprehensive deal currently being negotiated to resolve thousands of opioid lawsuits nationwide.

The cases of Ohio’s Cuyahoga and Summit counties had been selected to go to trial first from more than 2,300 opioid lawsuits brought in federal court by local municipalities, hospitals, Native American tribes and others that are consolidated before U.S. District Judge

Dan Polster

in Cleveland.

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The lawsuits broadly allege the pharmaceutical industry pushed opioid painkillers for widespread use without adequately warning of the risks of addiction and allowed high volumes of pills to flood into communities.

The five companies were the last left for the trial after several other drugmakers settled with the two counties in recent weeks.

The Ohio trial was expected to be closely watched as a benchmark for how the broader opioid litigation could be resolved. Virtually every state, along with thousands of local governments, have sued the pharmaceutical industry seeking to recover money to help address the impact of the opioid crisis.

At least 400,000 people have died in the U.S. from overdoses of legal and illegal opioids since 1999, according to federal data.

The court proceeding was set to be the first time documents would be presented and witnesses questioned in open court about how drug distributors allegedly contributed to the opioid crisis. The companies serve as middlemen that ship drug orders placed by pharmacies, hospitals and others.

An earlier opioid-crisis trial, in Oklahoma, had only drugmaker

Johnson & Johnson

as a defendant, limiting the scope of the narrative unspooled in court.

McKesson, Cardinal and AmerisourceBergen collectively controlled 95% of the U.S. drug distribution market in 2018, according to Drug Channels Institute, which provides research on the drug-supply chain. The three companies are among the largest in the U.S., all ranking in the top 25 of the Fortune 500.

The distributors have argued that their role is to ensure medicines prescribed by licensed doctors are delivered to patients who need them. They say they must balance their mission to deliver medicine against efforts to prevent and detect illegal diversion of those drugs.

Walgreens, widely known as a pharmacy, has been included in the trial for its role as a drug distributor to its own stores.

Israel-based Teva and its subsidiaries make generic opioid painkillers and two branded drugs used for cancer pain. The company has argued that it doesn’t market its generic opioids.

The deals come as a coalition of state attorneys general has been pushing for a comprehensive settlement with five drug companies that by some accounts could be worth as much as $48 billion.

Lawyers for cities and counties have balked at the proposal, which includes $18 billion to be paid over 18 years from AmerisourceBergen, Cardinal and McKesson; $4 billion from Johnson & Johnson over a shorter time frame; and the donation of drugs from Teva and distribution services valued at as high as $28 billion.

The local governments say that the money doesn’t come fast enough to help them address the ramifications of the opioid crisis and that too much of the funds would be controlled at the state level.

Write to Sara Randazzo at sara.randazzo@wsj.com

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