The three largest distributors of opioids in the U.S. and Johnson & Johnson have reached a settlement with thousands of plaintiffs who have been affected by the devastating opioid crisis plaguing America.
Johnson & Johnson, McKesson Corp., Cardinal Health and AmerisourceBergen have agreed to payout $26 billion to resolve all ongoing and future suits related to the opioid crisis filed by state and local officials, state attorneys general announced Wednesday. Details of the settlement had been reported earlier in the week by multiple outlets.
U.S. states are set to unveil a landmark $26 billion settlement Wednesday resolving claims that J&J and the three largest U.S. drug distributors helped fuel a nationwide opioid epidemic https://t.co/HsLEgHtOYN pic.twitter.com/nnfMORngqE
— Reuters (@Reuters) July 19, 2021
The settlement will require the drug distributors to provide more transparency about about where and to whom they ship substances. The exact financial terms of the agreement could vary depending on how many parties sign on, and the deal could be abandoned if not enough participants agree.
Some states have expressed opposition to the settlement and will continue to pursue separate lawsuits. West Virginia Attorney General Patrick Morrisey said in a statement “West Virginia is a resounding no on these agreements and will continue to litigate and negotiate outside the framework” of the national deal.
Distributors will also be required to inform state regulators of suspicious orders and customers who were turned away over concerns about drug abuse. Annual payments from the three distributers will be divided up over a period of 18 years and total $21 billion, while Johnson & Johnson will pay $5 billion over nine years. Nearly $2 billion will go to legal fees over a period of seven years, according to The Washington Post. Each company is expected to recoup roughly $1 billion in tax deductions.
A key sticking point in negotiations was reportedly future liability for the companies. State and local governments that sign onto this settlement cannot file any future civil litigation against the companies for their role in the opioid crisis.
Funds paid in the settlement must be used to prevent further over-prescription and drug abuse, recovery and treatment services and care for babies suffering from neonatal abstinence syndrome. If any funds are diverted to other causes, they must be publicly disclosed. (RELATED: How Johnson & Johnson Helped Spread The Opioid Epidemic For Profit)
Jurisdictions that have reached prior settlements or are in ongoing, separate trials are not eligible to partake in this settlement. The state of New York announced a $1.1 billion settlement with MeKesson, Cardinal and AmerisourceBergen Tuesday. J&J reached a settlement with the state of New York in June for $230 million, and an ongoing suit between the three aforementioned companies and local West Virginia jurisdictions is expected to wrap up in August.
Recently-released Centers for Disease Control and Prevention (CDC) data indicated a record-high in overdose deaths in the year 2020, with about three-quarters of those attributed to opioids. It’s estimated that the opioid epidemic cost the U.S. upwards of $1 trillion from 2001 to 2017, according to nonprofit Altarum, meaning the settlement would only account for a fraction of the cost of the crisis.
The companies involved have reiterated that their agreement to this settlement and others indicated no admission of guilt.