Thank you Pat for bringing this up. There is a settlement of $335 million to be paid over 9 years, that was announced yesterday. This article went to press before the announcement so did not account for it.
Here is my take on this.
This is a nationwide settlement and brings closure to the opioid issue. The company will pay $27.5 to $40 million per year for 9 years into the settlement.
Couple of points:
1. The company has accrued $270 million as of Q4 2024 for any potential settlement. This means a large part of the settlement is already covered.
2. The remaining $65 million over the next 9 years can easily be paid from their operating cash flow. Their trailing twelve months operating cash flow is $2.3 Billion.
Beyond the headlines, I have to say that the settlement and the closure of this issue is tremendously positive development.
Thank you Jack for the opportunity to guest post on your Substack!
Anytime, Shailesh!
You forgot to discuss the opioid situation and the degree of payoffs, bad publicity, and recovery times
Thank you Pat for bringing this up. There is a settlement of $335 million to be paid over 9 years, that was announced yesterday. This article went to press before the announcement so did not account for it.
Here is my take on this.
This is a nationwide settlement and brings closure to the opioid issue. The company will pay $27.5 to $40 million per year for 9 years into the settlement.
Couple of points:
1. The company has accrued $270 million as of Q4 2024 for any potential settlement. This means a large part of the settlement is already covered.
2. The remaining $65 million over the next 9 years can easily be paid from their operating cash flow. Their trailing twelve months operating cash flow is $2.3 Billion.
Beyond the headlines, I have to say that the settlement and the closure of this issue is tremendously positive development.