Drug Distributors and J.&J. Reach $26 Billion Deal to End Opioids Lawsuits

After two years of tussle, the country’s three major drug distributors and a pharmaceutical giant have struck a $ 26 billion deal with states, removing some of the industry’s largest companies from any legal liability related to the opioid epidemic, a decade-long public health , would free the crisis that killed hundreds of thousands of Americans.

This was announced by a bipartisan group of attorneys general on Wednesday afternoon.

The offer is now being sent to all states and municipalities in the country for approval. If enough of them formally sign up, billions of dollars could be released by companies to help communities pay for addiction treatment and prevention services and other high financial costs of the epidemic.

In return, the states and cities would drop thousands of lawsuits against the companies and pledge not to bring any more lawsuits in the future.

The settlement only binds these four companies – drug distributors Cardinal Health, AmerisourceBergen, McKesson, and Johnson & Johnson – and leaves thousands of other lawsuits against many other pharmaceutical defendants, including manufacturers and drugstore chains, unsolved in the mammoth national lawsuit.

But these four companies are widely considered to be the deepest-pocketed defendants.

In a statement sent via email, Michael Ullmann, Executive Vice President and General Counsel of Johnson & Johnson said, “We recognize that the opioid crisis is an enormously complex public health issue and we have deep compassion for all concerned. This settlement will directly support state and local efforts to make significant strides in addressing the opioid crisis in the United States. “

In a joint statement, the three distributors said: “Although the companies strongly deny the allegations made in these lawsuits, they believe the proposed settlement agreement and settlement process set out in it are important steps in achieving a comprehensive and meaningful settlement of state opioid claims.” Discharge communities in the United States. “

Merchants, who are mandated by law to monitor the quantities of prescription drugs, have been accused of turning a blind eye for two decades as pharmacies across the country ordered millions of pills for their communities. Plaintiffs also allege that Johnson & Johnson, which previously signed contracts with poppy growers in Tasmania to supply opioid materials to manufacturers and made its own fentanyl patches for pain sufferers, downplayed the addictive effects for both doctors and patients.

According to federal data, 500,000 people died from prescription and street opioid overdoses from 1999 to 2019. The number of deaths from opioid overdose hit a record high in 2020, the Centers for Disease Control and Prevention said earlier this month.

Under the agreement, the country’s three distributors would make payments over 18 years. Johnson & Johnson would pay $ 5 billion over nine years. A key feature of the agreement is that the distributors set up an independent clearinghouse to track and report each other’s shipments, a new and unusual mechanism designed to make data transparent and send out instant alerts when oversized orders are placed.

A separate deal between the company and the Indian tribes is still being negotiated.

The agreement was presented by attorneys general from North Carolina, Pennsylvania, New York, Delaware, Louisiana, Tennessee, and Connecticut.

Wednesday’s announcement suggests that a critical element – a large majority of states agree in principle – has been met. But there are still enormous obstacles before the checks are actually canceled.

The states and District of Columbia now have 30 days to carefully review the agreement, including the amount of payment anybody over 17 years old would pay. Many states have not yet had the opportunity to examine the agreement. And while many allow their attorneys general to opt out, others require lawmakers to be consulted. An indefinite number of states must sign up for the deal to proceed. If that threshold is not reached, companies could go away.

While the states are settling, a multiple California county lawsuit against Johnson & Johnson in a state court and a local lawsuit against the distributors in federal court in West Virginia continues.

States must also start persuading their places, including those who have filed cases and those who have not yet, to agree to the agreement. The more local governments register, the more money each state receives.

“The lawyers will do much of the heavy arming of their clients, the localities, to agree to the settlements because if the deal doesn’t go through, the lawyers won’t get paid,” said Elizabeth Burch, a law professor at the University of Georgia. who followed the litigation closely.

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