CLEVELAND (Reuters) - Four large drug companies could resume talks on Tuesday to try to reach a $48 billion settlement of all opioid litigation against them, after agreeing with two Ohio counties to a $260 million deal to avert the first federal trial over their role in the U.S. opioid epidemic.

Drug distributors AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp and drugmaker Teva Pharmaceutical Industries Ltd agreed to the deal that removed the immediate threat of a trial that was to begin on Monday in Cleveland.

The parties could resume talks as soon as Tuesday aimed at a broader settlement of thousands of opioid lawsuits brought by states and local governments, according to Paul Hanly, an attorney for the towns and counties.

Under Monday’s local settlement, the distributors, which handle around 90% of U.S. prescription drugs, will pay a combined $215 million immediately to Ohio’s Cuyahoga and Summit counties that were plaintiffs in Monday’s trial.

Israel-based Teva said it was paying $20 million in cash and will contribute $25 million worth of Suboxone, an opioid addiction treatment.

Teva, the world’s largest maker of generic drugs, said it will make its contribution over three years.

The companies have been accused of fueling a nationwide opioid crisis. Some 400,000 U.S. overdose deaths between 1997 and 2017 were linked to opioids, according to government data.

“While the companies strongly dispute the allegations made by the two counties, they believe settling the bellwether trial is an important stepping stone to achieving a global resolution,” the distributors said in a joint statement.

Hanly said his team rejected a proposed $18 billion settlement last week from the three distributors because the payments were due to be made over 18 yeas.

“One billion dollars for the entire year is a ham sandwich,” said Hanly. “It’s way too small an amount.”

Teva and attorneys general for four states pushed to salvage a deal they had reached last week, which was rejected by the team representing local governments.

North Carolina Attorney General Josh Stein told reporters on a conference call that he and his counterparts in Pennsylvania, Texas and Tennessee had an agreement in principle with the distributors as well.

He said the deal was comprised of $22 billion in cash and $26 billion in treatment drugs.

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Teva said it had agreed with the four attorneys general to contribute opioid treatment drugs worth $23 billion, as well as $250 million in cash over 10 years.

The other contributions to the broader settlement were to come from the distributors.

‘POSITIVE MOMENTUM’

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It was not clear if the settlement framework the four states announced would receive support from other states or the local governments, who had previously contended it was inadequate.

Pennsylvania Attorney General Josh Shapiro said he believed “there’s a lot of positive momentum” after Friday’s settlement talks, which he said also included Johnson & Johnson.

In a statement, Ohio Attorney General Dave Yost said other attorneys general “don’t speak for Ohio.”

He added, “This isn’t a framework, it’s a pile of lumber that’s been dropped on the construction site. Ohio will wait and see what the detailed plan looks like.”

Hanly said the attorneys general deal was spread over too many years to be acceptable. He said he did not expect the attorneys general to participate when talks resumed this week.

The so-called bellwether, or test trial, that had been set for Monday could have helped shape a broader settlement of some 2,600 lawsuits pending over the toll opioids have taken on local communities and the nation.

Shares in the companies had risen last week in anticipation of a broader deal. On Monday, shares of the big three drug distributors were down as much as 5% but recovered after Teva’s statement and closed down around 2% to 3%.

“We are not surprised to see distributor shares giving back some of last week’s gains as uncertainty persists in this extremely complex litigation,” Baird analyst Eric Coldwell wrote in a note.

The settlement, if extrapolated to a nationwide deal resolving all litigation for the four defendants, suggests a settlement value of around $48 billion, based on a court-approved allocation formula. Hanly said he had not done the same calculation, but thought it was likely worth more.

The lawsuits accuse drugmakers of overstating the benefits of opioids while downplaying the risks and allege distributors failed to flag and halt a rising tide of suspicious orders.

The companies have denied wrongdoing. Drugmakers argued their products carried government-approved labels that warned of the addictive risks of opioids, while distributors had argued that their role was to make sure medicines prescribed by licensed doctors were available for patients.

Monday’s settlement adds to deals worth $66.4 million that the two Ohio counties earlier struck with drug companies Mallinckrodt Plc, Endo International Plc, J&J and Allergan Plc.