State attorneys general unveiled a $26 billion settlement with major drug distributors and drug manufacturer Johnson & Johnson on Wednesday to resolve claims that the companies helped fuel the opioid epidemic.
PURDUE PHARMA AND STATES AGREE TO $4.5 BILLION OXYCONTIN SETTLEMENT
“We’ve reached an agreement in the most complicated civil case in American history,” said Tennessee Attorney General Herbert Slatery. “The negotiating states were both red and blue; this was a bipartisan effort from start to finish … Our objective was to solve a national problem that has touched virtually everyone in one way or another. We want all states and local governments to sign on.”
McKesson, AmerisourceBergen, and Cardinal Health, all major drug distribution companies, will collectively have to pay $21 billion over 18 years to communities that argue the distributors profited from flooding certain areas with addictive opioids and failing to flag suspicious orders for more pills. Johnson & Johnson, meanwhile, will have to pay $5 billion over nine years for underplaying the addictiveness of the drugs, causing more people to become hooked.
The $26 billion settlement amount could change depending on how many states and municipalities sign on to the deal. This is just one of the thousands of lawsuits filed against drug distributors and pharmaceutical companies over the parts they played in perpetuating the opioid epidemic. For instance, Johnson & Johnson was ordered last month to pay $230 million to New York, as well as an additional $30 million in the first year if the state passes legislation creating an opioid settlement fund. The company and all of its subsidiaries are also directed to stop manufacturing or selling opioids anywhere in New York.
“While no amount of money will ever be enough, this settlement will force these drug companies to pay a historic amount of money to bring needed treatment & recovery services to NC communities & to change their business practices so that something like this never happens again,” said North Carolina Attorney General Josh Stein.
JOHNSON & JOHNSON REACHES $230 MILLION SETTLEMENT WITH NEW YORK TO END OPIOID BUSINESS
This settlement would resolve suits against the four companies, but other players still face legal action. The litigation continues for Teva Pharmaceutical Industries, Endo International, and AbbVie. Meanwhile, Purdue Pharma, maker of blockbuster drug OxyContin, has filed for bankruptcy and will likely have to pay a settlement of $4.5 billion and transform itself into a public beneficiary trust, which would give all OxyContin profits to cities, counties, and states and distribute opioid abuse treatments for free.
Federal bankruptcy judge for the Southern District of New York Robert Drain is expected to approve the Purdue Pharma settlement at a confirmation hearing on Aug. 9.
