US opioid lawsuits close to settlement with 4 companies

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Years-long efforts by state and local governments in the United States to compel the drug industry to help push for nationwide opioid addiction reform and the overdose crisis took a huge step forward Tuesday when local government lawyers announced they were close to a $26 billion settlement with The country’s three largest drug distributors and the pharmaceutical company Johnson & Johnson.

Under the agreement, Johnson & Johnson will not produce any opioids for at least a decade. AmerisourceBergen, Cardinal Health and McKesson also share information under a new system aimed at stopping avalanches of grain that reached some areas about a decade ago.

Local government lawyers said full details could be shared within days. However, this wouldn’t be the end of the deal; Each state will have 30 days to decide whether or not to join. Local governments will then have five months to make a decision. If the participating governments do not accept participation, the total settlements will decrease.

“This is a nationwide crisis that could have been addressed and probably should have been addressed by other branches of government,” Paul Geller, one of the lead attorneys representing local governments across the United States, said in a conference call with reporters on Tuesday. “But this is really an example of using litigation to fix a national problem.”

If approved, the settlement will likely be the largest of many for opioid lawsuits. While it means billions for lawyers who have worked on the cases, it is expected to bring in more than $23 billion for mitigation and relief efforts to help get treatment for addicted people along with other programs to address the crisis. The money will come in the form of 18 annual payments, and the larger amounts will be in the next several years.

The deal is an echo of one that companies have been paying, sometimes publicly, for two years.

Johnson & Johnson confirmed in a statement that it was prepared to contribute up to $5 billion to the national settlement.

“There is still progress toward finalizing this agreement, and we remain committed to providing certainty to interested parties and critical assistance to families and communities in need,” the company said. “The Settlement is not an admission of liability or wrongdoing, and the Company will continue to defend against any litigation not resolved by the Final Agreement.”

But Cardinal Health declined to comment early Tuesday, and other distribution companies did not respond to requests for comment.

The Associated Press’ tally finds there have been at least $40 billion in completed or proposed settlements, penalties and fines between governments and a number of opioids since 2007, not including one between the federal government and OxyContin maker, Purdue Pharma, where most of the $8.3 billion. It will be waived. Purdue is trying to reach a deal through bankruptcy court that could be worth up to $10 billion over time; A hearing on that plan is scheduled for August.

Other deals are possible. While a growing number of companies in the industry have struck deals, some manufacturers have not — and no drugstore companies have made nationwide settlements.

But the total amount in the settlements is well below estimates of the financial costs of the pandemic. The Society of Actuaries found that the cost of the crisis in the United States was $630 billion from 2015 through 2018, with the private sector bearing most of the costs. The White House Council of Economic Advisers, when looking at the economic impact of people who took a fatal overdose, estimated the one-year cost at about $500 billion nationwide.

In contrast to tobacco settlements reached in the 1990s, governments agreed to spend the money they brought in from opioid-related settlements to deal with the opioid crisis.

In a joint statement, attorneys general for Connecticut, Delaware, Florida, Louisiana, Massachusetts, New York, North Carolina, Ohio, Pennsylvania and Tennessee said settlement talks with the four companies are “likely coming to an end,” as we look to bring much-needed dollars into our countries to help people recover from drug addiction. Opioids are radically changing the opioid manufacturing and distribution industries so that this never happens again.”

But they still have choices about how exactly to do that.

“Is it a nice part of the change?” asked Ryan Hampton, who is recovering from opioid addiction and is an advocate for policy tackling the overdose crisis in Las Vegas. “It really is. Are you going where you want to go? The jury is still out on that.”

Even before the settlement plan was revealed on Tuesday, a group of public health advocates and experts began calling for any settlement money to be spent to tackle the opioid crisis.

“It’s money that can do a lot of good if used well,” said Joshua Sharfstein, deputy dean of the Johns Hopkins Bloomberg School of Public Health, who is leading the effort. “It’s really important to use it well to save lives because it comes at the height of the overdose epidemic.”

Special attorneys on the plaintiffs’ executive committee representing local governments in opioid cases across the country announced some details of the settlement Tuesday even before it was completed. The decision to do so was in part because the state of New York reached a settlement Tuesday with the Big Three distributors amid a trial taking place in state court on Long Island.

The New York deal, valued at more than $1 billion, represents the share of the National Deal that it would receive from distributors if the National Deal were to be completed. New York also reached a similar agreement last month with Johnson & Johnson worth $230 million.

“Today, we hold them accountable for providing more than $1 billion more to New York’s opioid-ravaged communities for treatment, recovery and prevention efforts,” New York Attorney General Letitia James said in a statement Tuesday.

The trial is expected to continue, but the settlement has left only three drug manufacturers as defendants.

Other manufacturers, regional distribution companies, pharmacies in New York and other cases will remain for now.

State and local governments say distribution companies did not have proper controls in place to label or stop shipments to pharmacies that receive huge rations of powerful and addictive painkillers. The companies asserted that they were fulfilling requests for legal drugs made by doctors – so they should not take the blame for the country’s addiction and overdose crisis.

An Associated Press analysis of federal distribution data found that enough prescription opioids were shipped in 2012 to every person in the United States for a 20-day supply.

Opioids — including both prescription and illicit drugs such as heroin and illegally produced fentanyl — have been linked to more than 500,000 deaths in the United States since 2000. The number of cases reached a record high in 2020.

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