Three major drug distributors and the pharmaceutical giant Johnson & Johnson are finalizing a $26 billion settlement to resolve thousands of lawsuits over the nation’s opioid crisis, according to four people familiar with the discussions.
The four companies – which include Cardinal Health, Amerisource Bergen and McKesson – were accused by states, cities and counties of playing a significant role in funneling a flood of opioid painkillers to communities across the U.S. The drugs led to the overdose deaths of more than 500,000 Americans between 2009 and 2019, according to the Centers for Disease Control and Prevention.
The settlement could be completed as early as this week, according to people familiar with the negotiations, but it would still require the approval of more than 40 states and hundreds of cities and counties. Once finalized, it would result in billions of dollars flowing to states to be used for prevention, treatment and recovery.
Paul Geller, one of the lead lawyers representing cities and counties, described the upcoming settlement as a “game changer” for parts of the country hit hard by the opioid epidemic.
“There is no question we are too late for some families, but you’ve got to start somewhere and start sometime and better now to really start to make these changes in local regions where it is desperately needed,” said Geller, of the firm Robbins Geller.
The three drug distributors did not respond to requests for comment. They have previously rejected the claims raised in the ongoing lawsuits.
Although financial terms of the settlement have not been finalized, people familiar with the negotiations said the drug distributors’ portion of the settlement could be up to $21 billion.
Details of the tentative agreement were first reported by the New York Times.
Johnson & Johnson said in a statement that it has agreed to contribute $5 billion towards a final settlement to resolve the lawsuits.
“There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need,” Johnson & Johnson said. “The settlement is not an admission of liability or wrongdoing, and the Company will continue to defend against any litigation that the final agreement does not resolve.”
In an initial step toward a broader agreement, the three distributors settled with New York for roughly $1.1 billion, New York State Attorney General Letitia James announced Tuesday. The settlement does not include an admission of liability.
The companies released a joint statement, saying they view the agreement as “an important step toward finalizing a broad settlement with states, counties, and political subdivisions.”
“The distributors remain deeply concerned about the impact the opioid epidemic is having on communities across the nation and remain committed to being part of the solution,” the statement said.
Some of the money for New York state will be prioritized for Nassau and Suffolk counties, which filed one of the first opioid lawsuits in the country. The money – which is expected to begin to flow to New York cities and counties in two months – will go towards prevention, treatment and recovery for opioid addiction.
“While no amount of money will ever compensate for the millions of addictions, the hundreds of thousands of deaths, or the countless communities decimated by opioids, this money will be vital in preventing any future devastation,” James said in a statement.
The deal with New York also includes a requirement that the companies pool data on opioid distribution into a national repository overseen by an independent third party. The new clearinghouse is intended to monitor potential opioid hot spots that could emerge. The clearinghouse will dictate “pharmacy-specific opioid shipment limits that each distributor must follow,” according to James’ office, and suspicious orders will be flagged for further scrutiny by state regulators.
The opioid crisis worsened during the pandemic, according to government figures. Overdose deaths surged to a record 93,000 last year, up from 72,000 the previous year.
“Millions of people across the nation are sick or dead from opioid addiction,” nine state attorneys general said in a joint statement.
“State attorneys general have been hard at work negotiating on their behalf for years to force these companies to pay to combat the opioid epidemic they helped to create and fuel.”
“Our negotiations are progressing well and potentially nearing their completion,” the statement added. “We look forward to bringing much-needed dollars home to our states to help people recover from opioid addiction and to fundamentally change the opioid manufacturing and distributing industries so this never happens again.”