NEW YORK, Oct 28 (Reuters) - A U.S. appeals court on

Tuesday revived a $2.5 billion lawsuit against drug distributors

accused of contributing to an opioid addiction crisis in West

Virginia communities, overturning a 2022 victory at trial by the

largest drug suppliers in the U.S.

The 4th U.S. Circuit Court of Appeals ruled that a lower court

incorrectly concluded that Cencora ( COR ), McKesson Corp ( MCK )

and Cardinal Health ( CAH ) did not create a "public

nuisance" by supplying a flood of addictive pills to pharmacies

in Cabell County and the City of Huntington.

The 4th Circuit reopened the case, saying the lower court should

re-evaluate whether the three drug companies should pay for

addiction treatment and prevention efforts in the city and

county, based on their alleged failure to stop "suspicious"

large orders of opioid pills from pharmacies.

Cencora ( COR ), Cardinal Health ( CAH ) and McKesson did not immediately

respond to requests for comment.

Huntington Mayor Patrick Farrell said that the city looks

forward to a new opportunity to hold drug distributors

accountable for "the devastating harm that they have caused our

city and far too many of its families."

The distributors had previously agreed to pay up to $21 billion

to resolve the thousands of lawsuits brought against them by

state and local governments around the country. But communities

in hard-hit West Virginia opted against joining the national

opioid settlement in favor of seeking a bigger recovery.

U.S. District Judge David Faber had ruled in favor of the

three drug companies in 2022, finding that West Virginia's

"public nuisance" law did not create liability for companies

that sold prescription drugs, and concluding that the three

companies had complied with their duty to report suspicious drug

orders to U.S. regulators. The 4th Circuit reversed both those

findings.

The appeals court found that the three drug companies

repeatedly shipped opioids to pharmacies in quantities that

exceeded the distributors' own thresholds for "suspicious"

orders, without reporting the sales to the U.S. Drug Enforcement

Administration.

For example, Cencora ( COR ), formerly known as AmerisourceBergen,

supplied 775 potentially suspicious orders from a single

pharmacy in Cabell County over a five-year period, but it only

reported 16 of those orders to the DEA, according to the 4th

Circuit.