Hospitals Get $700M From Drugmakers in Opioid Class-Action Lawsuit

The opioid epidemic has affected hospitals, both clinically and financially, for almost 30 years.

More than1,000 acute care hospitals will receive a share of $700 million as part of the settlement of class action lawsuits against several pharmaceutical companies accused of helping to cause the opioid abuse epidemic.

The agreement condenses four separate class-action settlements against Cencora (formerly AmerisourceBergen), Cardinal Health, McKesson, Johnson & Johnson, Teva and Allergan, among other defendants.

According to the lawsuit, the defendants either misrepresented the risks and safety precautions correlating to opioid use, did not properly examine suspicious orders or filled prescriptions that were not written for approved medical purposes.

For this settlement, the drug companies have agreed to pay $651 million in compensation  “for the past and future costs for treatment of opioid abuse and community outreach programs to address the epidemic,” according to a press release from Burns Charest, the Dallas-based law firm representing the hospitals.

Additionally, another $49 million will be used to supply hospitals with Naloxone over the next seven years for opioid abuse treatments, according to the law firm.

Many lawsuits have been filed with relation to the epidemic. Notably, drug giant Purdue Pharma declared bankruptcy in 2019 after a slew of lawsuits. Even this year, settlements are still rolling out for the mayhem caused by the extremely addictive opioid Oxycontin.. 

For Hospitals: The providers eligible for this settlement generally consist of non-governmental acute care hospitals that treated patients diagnosed with an opioid-related condition between January 1, 2009, and October 30, 2024, according to the settlement website.

If a hospital submitted a valid claim by March 4, it is entitled to either a $5,000 “quick pay” or a higher amount based on more detailed documentation of the costs incurred.

A Light on Destruction

Hospitals have been greatly affected by the epidemic, which began in the 1990s as drugmakers flooded the market with opioid-based drugs. According to a 2021 study, the epidemic resulted in annual costs related to overdose, misuse and dependence of:

$35 billion in health care costs;

$14.8 billion in criminal justice costs; and

$92 billion in lost productivity

According to the Centers for Disease Control and Prevention, more than 100,000 Americans died of an opioid overdose in 2021. Although opioid deaths have declined in recent years, the death toll still stood at roughly 83,000 as of September 2024.

Studies have shown that improving access to evidence-based treatments for OUD (opioid use disorder) has been associated with a savings of $25,000 to $105,000 per person in lifetime healthcare costs.

CFOs need to ensure they are calculating the cost of opioid care in their organizations and understanding how and where they can apply for reimbursement. They should also be working with clinicians to understand how this epidemic has an ongoing effect on hospitals, with regard to outcomes, care costs and other resources.

Many experts suggest that overcoming the opioid epidemic must have a collaborative healthcare approach. Health systems can look to participate and invest in partnerships, programs to evaluate and act on efforts to chip away at the opioid crisis.