Four health care giants have agreed to collectively pay $26 billion for their roles in ‘building and fueling America’s opioid epidemic’.
The deal is the second largest cash settlement in US history, behind only the $246 billion tobacco deal reached back in 1998.
Attorney generals from 15 states were involved in negotiating the deal and they announced a historic settlement on Wednesday after two years of legal wrangling.
Under the proposal, distributors McKesson Corp., Cardinal Health Inc. and Amerisource Bergen Corp. are expected to pay a combined $21 billion, while Johnson & Johnson will pay $5 billion.
“There just isn’t enough money in the world to explicitly address the pain and suffering,” Connecticut Attorney General William Tong said in a statement after the news announcement.
The settlement amount from the distributors will be paid over the next 18 years. J&J will pay over nine years, with up to $3.7 billion to be paid during the first three years.
Distributors were accused of lax controls, which allowed massive amounts of addictive painkillers to be diverted through illicit channels, destroying communities, while J&Jwas accused of downplaying addiction risk in its opioid marketing.
The companies have denied the allegations.
A group of state attorneys general unveiled a landmark Wednesday, $26 billion settlement of claims that three of the largest US drug distributors and drugmaker Johnson & Johnson helped fuel a deadly nationwide opioid epidemic. of.
The agreement also calls for the creation of an independent clearinghouse to provide collected data to all three distributors and state regulators about where drugs are going and how often, a tool negotiators hope to reduce pills being sent to communities. will help to do so.
The final amount to be paid to companies will depend on the extent to which states sign up for the settlement and confirm that their cities and counties are on board.
The opioid crisis has been attributed to hundreds of thousands of US overdose deaths since 1999, but has hit some areas much harder than others, creating divisions between governments when it comes to evaluating disposal. .
The attorney general said he expects broader support, which is needed before the companies can fully fund the settlement.
States will have 30 days to evaluate the agreement.
North Carolina Attorney General Josh Stein said, ‘The expectation is north of 40 and will sign well north of 40.’
Washington state Attorney General Bob Ferguson said he would not be involved in the deal. “The deal is clearly not good enough for Washington,” he said.
The trial against drug distributors in that state will begin on September 7, and Johnson & Johnson will go to trial in January.
To receive full payment, a critical mass is required. A person familiar with the settlement said the maximum payment requires at least 48 states, 98% of local governments and 97% of jurisdictions that have yet to sue.
The person said that the election to participate only guarantees the state 55% of its share of the settlement as a base amount.
The other 45% is up to the state through legislation or agreement to be able to bring its political subdivisions on board and assure companies to end litigation, the source said. Local governments have up to 120 days to get involved.
More than 3,000 lawsuits related to the health crisis, mostly by state and local governments, have been filed.
According to Christine Minhy, who runs an opioid litigation watchdog project supported by the Open Society Foundation Soros Justice Fellowship, nearly half of the states have already passed legislation or signed agreements with their localities about how settlement funds will be distributed.
The law does not guarantee success. In Indiana, cities and counties representing more than half of the state’s population exercised their rights to opt out of any settlement after a law was passed limiting their deductions to 15% and prohibiting lawsuits. .
Hard-hit West Virginia had already indicated it would not participate in the agreement, as local governments opted to try to push the deal on their own in hopes of a bigger payout last year. Trial is going on in a case against the distributors in the state.
State Attorney General Patrick Morris said, “As of now, West Virginia is likely to ‘no’ to these agreements, but we will continue to review all proposals and advocate for the best interests of West Virginians.”
New Hampshire, which was deeply affected by the pandemic, has also not decided whether to join the deal, said James Boffetti, an associate state attorney general. He said the state is suing J&K and the distributors.
“Once we get any agreement, we will closely evaluate its terms,” he said. ‘I can’t say at this time whether or not we will enter into an agreement.’
Meanwhile, the crisis has shown no sign of giving up. The US Centers for Disease Control and Prevention said last week that provisional data showed 2020 was a record year for drug overdose deaths with 93,331, up 29% from the year before.