February 27, 2018 / 9:43 PM / 6 months ago

UPDATE 3-U.S. to seek reimbursement from opioid makers, distributors

(Adds statements from Purdue Pharma, Johnson & Johnson, distributors)

By Sarah N. Lynch

WASHINGTON, Feb 27 (Reuters) - The federal government, backing litigation by states and cities, will seek reimbursement from major drug companies and distributors to recover costs it has borne from the opioid epidemic, the U.S. Justice Department said on Tuesday.

Attorney General Jeff Sessions said Washington would side with plaintiffs in the litigation that accuses the drug makers of deceptively marketing opioids and alleges that distributors ignored red flags indicating the painkillers were being diverted for improper uses.

"The hard-working taxpayers of this country deserve to be compensated by any whose illegal activity contributed to these costs," Sessions said.

In 2016, the last year with publicly available data, 42,000 people died from opioid overdoses, according to the U.S. Centers for Disease Control and Prevention.

In the latest step by the Justice Department to tackle the opioid epidemic, the department said it would file a "statement of interest" in litigation consolidated in a federal court in Cleveland.

Named in the litigation are opioid manufacturers Purdue Pharma LP, Johnson & Johnson, Teva Pharmaceutical Industries Ltd, Endo International PLC and Allergan PLC and the three biggest drug distributors in the country - AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp..

The consolidated litigation pending before U.S. District Judge Dan Polster involves at least 355 lawsuits filed by cities, counties and others.

Polster has been pushing for a quick, global settlement in the litigation and has invited state attorneys general who have cases in state courts or who are conducting a multistate probe of the companies to participate in those talks.

The first settlement hearing was held in January. A second one is expected March on 6.

In a statement, Oxycontin maker Purdue said it was "fully engaged" in the process the judge had set forth, and had taken steps to address the crisis.

Johnson & Johnson said that while it was committed to combating the problem, the allegations against it "are baseless and unsubstantiated." Representatives for the other manufacturers did not respond to requests for comment.

A trade group representing the three distributors said the industry was committed to reducing the misuse and abuse of opioids.

The Justice Department is not expected to participate in the settlement discussions. Its statement of interest in the litigation will allow it to eventually get a share of the final settlement the companies pay.

Plaintiffs' lawyers have not quantified the potential costs involved in the cases but have compared them with the litigation by states against the tobacco industry that led to 1998’s $246 billion settlement.

Also on Tuesday, Sessions announced the creation of a task force to combat the opioid crisis by seeking criminal and civil remedies and said he had appointed a federal prosecutor to lead the government's battle.

Additional reporting Makini Brice in Washington and Nate Raymond in Boston; Editing by Andrea Ricci and Peter Cooney

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