States Announce $26 Billion Settlement to Resolve Opioid Lawsuits
Deal could bring an end to thousands of lawsuits blaming Johnson & Johnson and the nation’s largest drug distributors for an epidemic in painkiller addiction
States unveiled a historic $26 billion settlement with drug companies to resolve thousands of opioid-crisis lawsuits, paving the way for communities across the country to secure a jolt of funding to address an epidemic in painkiller addiction that hasn’t abated.
The nation’s three largest drug distributors— McKesson Corp. , AmerisourceBergen Corp. , and Cardinal Health Inc.—and drugmaker Johnson & Johnson have been negotiating the deal for more than two years, but Wednesday’s announcement signifies an important milestone that could clear the way for money to be received by states as soon as early next year.
An opioid crisis that has claimed half a million lives in the U.S. has triggered more than 3,000 lawsuits filed by states, local governments, Native American tribes, hospital groups and others against players in the pharmaceutical industry. The lawsuits allege drugmakers pushed their painkillers for uses far beyond what was medically necessary and that distributors and pharmacies didn’t do enough to halt masses of pills from flowing into communities.
The companies pushed back, saying they made and distributed a medically necessary and federally regulated product. But at the same time, the burdens of litigation—like turning over millions of internal documents, making employees available for depositions, and preparing for complex trials—has sent many of the companies to the negotiating table.
The attorneys general from Tennessee, North Carolina, Pennsylvania, New York, Louisiana, Delaware and Connecticut jointly announced the completed deal Wednesday, which had been rumored earlier this week.
The broad terms call for the three distributors to pay up to $21 billion collectively over a period of 18 years, and for Johnson & Johnson to contribute $5 billion over nine years. The amounts could decrease if not enough states sign on, and the companies can still walk away if they decide the level of participation doesn’t buy them the global peace they are seeking to put the lawsuits behind them.
Completing the complex deal took thousands of hours of negotiations between private plaintiffs’ lawyers representing communities, state attorneys general, and lawyers for the four companies. Frequent in-person meetings gave way to nightly Zoom calls held for months during the pandemic.
The final details came together as opioid lawsuits went to trial in three states, putting pressure on both sides.
The settlements, if completed, would resolve the opioid lawsuits for these four companies, but several other targets remain. Trials are under way in California and New York against drugmakers Teva Pharmaceutical Ltd. , AbbVie Inc.’s Allergan, and Endo International PLC. National pharmacy chains have also been named in hundreds of suits and are scheduled to go to trial in October. Two other companies that were targets of the suits, including OxyContin-maker Purdue Pharma LP, filed for bankruptcy to handle the liability and are negotiating their own settlements with states.
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