After two years of bickering, the country’s three major drug distributors and a pharmaceutical giant have reached a $26 billion deal with states that would exempt some of the industry’s largest companies from all legal liability in the opioid epidemic, a decades-long public health crisis. crisis that has killed hundreds of thousands of Americans.
The announcement was made Wednesday afternoon by a bipartisan group of attorneys general.
The offer is now going to all states and municipalities in the country for approval. If enough of them formally sign up, billions of dollars from the companies could be released 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 promise not to take any action in the future.
The settlement binds only these four companies — drug distributors Cardinal Health, AmerisourceBergen, McKesson and Johnson & Johnson — and leaves thousands of other lawsuits against many other pharmaceutical suspects, including manufacturers and drugstore chains, in the massive nationwide lawsuits that remain unresolved.
But these four companies are widely seen as among the culprits with the biggest wallets.
In an emailed statement, Michael Ullmann, executive vice president and general counsel of Johnson & Johnson said: “We recognize that the opioid crisis is a hugely complex public health problem and we have deep sympathy for all involved. This settlement will — and directly support local efforts to make meaningful progress in addressing the opioid crisis in the United States.”
In a joint statement, the three distributors said: “While the companies strongly dispute the allegations in these lawsuits, they believe the proposed settlement agreement and the settlement process it is establishing are important steps toward a comprehensive resolution of opioid claims from government and providing meaningful relief to communities in the United States.”
The distributors, who are required by law to control the quantities of prescription drugs, are 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 contracted poppy growers in Tasmania to supply opioid materials to manufacturers and made its own fentanyl patches for pain patients, downplayed addictive properties for both doctors and patients.
According to federal data, 500,000 people died from prescription and street opioid overdoses from 1999 to 2019. Opioid overdose deaths hit an all-time 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 for 18 years. Johnson & Johnson would pay $5 billion in nine years. A key feature of the agreement is that the distributors would establish an independent clearinghouse to track and report on each other’s shipments, a new and unusual mechanism designed to make data transparent and send instant alerts when outsized orders are placed.
A separate deal between the companies and Native American tribes is still under negotiation.
The agreement was presented by attorneys general of North Carolina, Pennsylvania, New York, Delaware, Louisiana, Tennessee and Connecticut.
Wednesday’s announcement suggests that a critical element — a large majority of states agreeing in principle — has been met. But there are still daunting hurdles before any actual cuts are made.
The states and the District of Columbia now have 30 days to scrutinize the agreement, including how much each would be paid over 17 years. Many states have not yet had a chance to investigate the deal. And while many allow their attorneys general to sign, others are demanding that lawmakers be consulted. An unspecified number of states must sign up for the deal to go through. If that threshold is not met, the companies can walk away.
While the states decide, a lawsuit filed by several California counties in state court against Johnson & Johnson and a local West Virginia lawsuit in federal court against the distributors will continue.
States must also begin to flatter their places, including those who have already filed cases and those who have not, to agree to the deal. The more local governments that sign up, the more money each state will receive.
“The lawyers will put a great deal of effort from their clients, the locals, to reach an agreement on the settlements because if the deal doesn’t go through, the lawyers won’t be paid,” said Elizabeth Burch, a lawyer. professor at the University of Georgia, who has been following the process closely.