The distributors were accused by prosecutors of turning a blind eye to over-orders for a long time. Collectively, the companies will pay $21 billion in 18 payments over 17 years. Attorneys’ fees, who spent years conducting and funding the costly lawsuit, will be deducted from the total and are expected to be paid faster than some substance abuse funds. The distributors also admitted no mistakes and, like Johnson & Johnson, noted that they were part of the supply chain for drugs that were federally approved and monitored.
The agreement would force senior executives from the distributors to take an active role in establishing programs to control the sale of red flag pills.
In return for the payments, the companies are demanding what is known as “global peace” – an agreement between plaintiffs to lay down their litigating swords for good. The proposals will be voted on by representatives of 3,022 cases gathered before a federal judge, Dan A. Polster, in Cleveland, and the state attorneys general, who have the authority to prosecute the defendants in state courts, where hundreds of other cases against the companies have also been reported.
The negotiations are led by lawyers from local governments and the states of North Carolina, Pennsylvania, Connecticut, New York and Massachusetts.
The distributors and several manufacturers are in the middle of a lawsuit filed by New York State and two of its counties. According to people familiar with the negotiations, the broad $26 billion deal includes a $1 billion settlement that the distributors negotiated with New York to be exempt from that lawsuit.
However, the settlement is not the end of the multifaceted opioid disputes nationwide, in which the first cases were filed in 2014. Other defendants in the manufacturing sector have yet to make such deals, such as Purdue Pharma and Mallinckrodt, which have lawsuits in bankruptcy court, and Allergan, which are on trial. Cases against pharmaceutical chains, such as CVS Health, Walgreens and Walmart, are even further on the line.
But compared to October 2019, when four attorneys general announced the first iteration of a brokered plan, the latest offering includes more money, especially for attorneys, and a clearer allocation structure to deliver settlement money to states and localities.