Item 1.01. Entry into a Material Definitive Agreement
As of February 25, 2022, Cardinal Health, Inc. (the "Company") and two other
national pharmaceutical distributors (collectively, the "Distributors")
announced that each had independently determined that there is sufficient state
and litigating subdivision participation to enter into the previously disclosed
proposed settlement agreement (the "Settlement Agreement") to settle a
substantial majority of opioid lawsuits filed by states and local governmental
entities. The Settlement Agreement requires that participating states and
territories, together with the Distributors, seek court-ordered consent
judgments embodying the terms of the Settlement Agreement, which is anticipated
to become effective on April 2, 2022.
Under the terms of the Settlement Agreement, the Company would pay the
participating states, territories and local governmental entities (the "Settling
Governmental Entities") up to $6.0 billion over 18 years. A minimum of 85% of
settlement payments must be used by the Settling Governmental Entities to
remediate the opioid epidemic. The majority of the remaining payment amounts
will be applied towards plaintiffs' attorneys' fees and costs. The Settlement
Agreement also includes injunctive relief terms related to the Distributors'
controlled substance anti-diversion programs. A monitor will be selected to
oversee compliance with these provisions for a period of five years. The
Distributors will also engage a third-party vendor to act as a clearinghouse for
data aggregation and reporting, which the Distributors will fund for ten years
and which will be available to the participating states to use in their
anti-diversion efforts.
The states of Florida, New York, Ohio, Rhode Island and Texas and their
participating subdivisions, which have separate agreements with the
Distributors, will participate in the Settlement Agreement pursuant to the terms
of their separate agreements. As of the date of this Form 8-K, 46 of 49 eligible
states, as well as the District of Columbia and all eligible U.S. territories,
have agreed to join the Settlement Agreement. West Virginia subdivisions and
Native American Tribes are not a part of the Settlement Agreement. A list of the
states and territories that have agreed to the Settlement Agreement is attached
hereto as Exhibit 99.1.
Item 7.01. Regulation FD Disclosure
The Distributors issued a joint news release on February 25, 2022 to announce
the Settlement. A copy of this news release is attached to this Form 8-K as
Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
99.1 List of participating states and territories
99.2 Joint news release issued by the Distributors on February 25, 2022
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Cardinal Health, Inc.
(Registrant)
Date: February 25, 2022 By: /s/ JESSICA L. MAYER
Jessica L. Mayer
Chief Legal and Compliance Officer
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