((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Clarification of wording in paragraph 4 to reflect that multiple states are involved in the main investigation; added comments from Publicis and Hikma, and additional settlement details in paragraphs 7-8 and 11-13) by Nate Raymond
A division of French advertising company Publicis Groupe SA PUBP.PA and pharmaceutical company Hikma Pharmaceuticals HIK.L have reached separate settlements collectively worth $500 million to resolve allegations they helped fuel the he deadly opioid epidemic in the United States.
The settlements announced Thursday by U.S. state attorneys general add to the more than $50 billion that drugmakers, distributors, pharmacy operators and consultants have agreed to pay to resolve lawsuits and investigations into their role in the addiction crisis.
Publicis Health, a subsidiary of Publicis Groupe, has agreed to pay $350 million to respond to allegations from all U.S. states and territories that it helped Purdue Pharma, the maker of OxyContin, develop marketing strategies for boosting sales of its prescription opioid painkiller.
Massachusetts, which sued Publicis in 2021, alleging it collected more than $50 million to help Purdue get doctors to prescribe its opioids to more patients, for longer periods and in doses higher, served on the state executive committee investigating the company.
Massachusetts Attorney General Andrea Joy Campbell said in a statement that the settlement would “strengthen accountability and transparency in this ongoing crisis” and provide $8 million that the state could use to fund treatments and services.
Publicis has denied wrongdoing and called the Massachusetts case an unprecedented attempt to sue an advertising agency over a manufacturer’s marketing of its products. But a state court judge refused to dismiss the case in October 2021.
In a statement, Publicis said $343 million of the settlement would go toward states’ opioid relief effort, and the rest would cover legal costs.
It recorded a pre-tax charge of $213 million in the fourth quarter of 2023 to cover the settlement, after being paid $130 million by its insurers.
“Tackling the opioid crisis in the United States requires collaboration across industries, lawmakers and communities, and we are committed to playing our part,” Publicis said.
London-listed Hikma separately reached a tentative agreement to resolve state and local claims for $150 million, including $115 million in cash and $35 million worth of naloxone, an addiction treatment drug to opioids.
Hikma said she did not admit to wrongdoing. Mr. Campbell’s office said the agreement puts to rest accusations that the generic drugmaker, between 2006 and 2021, failed to monitor suspicious opioid orders placed by potentially illegal distributors.
The company has been the subject of more than 900 lawsuits related to the outbreak, according to a complaint Hikma filed in September against an insurer.
Hikma said in its statement that the agreement would resolve the “vast majority” of its cases.
States that do not accept drug treatment drugs under the deal will receive money instead, according to Mr. Campbell’s office.
In December, the U.S. Supreme Court considered an appeal filed by President Joe Biden’s administration against Purdue Pharma’s multibillion-dollar bankruptcy settlement, which ends claims filed in the against the drug manufacturer. A decision is expected in June.