Opioid Maker J&J and Distributors Reach Nearly $ 26 Billion Deal with US States | Drug News
Opioid maker Johnson & Johnson and three drug distributors are expected to disclose final terms of a $ 26 billion settlement this week for thousands of lawsuits accusing them of fueling a public health crisis, people familiar with the matter say. the agreement.
After years of negotiations with five states, the companies are set to make the announcement on Wednesday, according to people who have asked not to be identified to discuss closed-door discussions.
Along with J&J, the proposed settlement includes McKesson Corp., Cardinal Health Inc. and AmerisourceBergen Corp. More than 40 states are expected to sign the agreement – others are expected to reject it in favor of continuing existing court cases already slated for trial, the people say.
The deal likely removes a major overhang for companies seeking to end legal responsibilities for their role in the opioid epidemic, analysts say.
McKesson, Cardinal Health and AmerisourceBergen have already indicated in regulatory documents that they expect to pay $ 21 billion, and J&J will pay $ 5 billion. What’s new is that each state also has the option of accepting only the J&J offer or the combined offer from distributors, and companies will pay bonuses to states for how many of their local governments sign up, said. the inhabitants.
New York Attorney General Letitia James said on Tuesday his state was guaranteed to receive $ 1.1 billion in return for dropping claims against the three distributors.
The companies were part of a trial currently underway on Long Island. The judge in the case agreed to drop McKesson, Cardinal Health and AmerisourceBergen as defendants on Tuesday. J&J agreed to pay $ 263 million earlier to walk away from the deal.
“Although the companies strongly dispute the allegations at issue in the lawsuit, they believe this resolution will allow companies to focus their attention and resources on the safe and secure delivery of drugs and therapies while providing significant relief to affected communities. “, The three distributors said in a joint statement.
Tennessee Attorney General Herbert Slatery led negotiations for the comprehensive settlement with four other states designated to reach a deal: Texas, Pennsylvania, North CarTolina and Iowa.
Slatery’s office did not immediately respond to an email or phone call requesting after-hours comment.
Under the terms of the deal, states that were not part of the negotiations will have 30 days to decide whether they want to join the settlement, the people said.
Some states, including Ohio and Texas, have already made deals to divide money from opioid deals between state and local governments.
“There is still progress towards finalizing this deal and we remain committed to providing certainty to affected parties and essential assistance to families and communities in need,” J&J said in a statement on Monday reiterating its offer of 5 billions of dollars. “The settlement is not an admission of liability or wrongdoing, and the Company will continue to defend itself against any disputes that the final agreement does not resolve.”
Spokesmen for AmerisourceBergen, Cardinal Health and McKesson declined to comment.
States, cities and counties have sued companies for their role in fueling the opioid epidemic, which has claimed an estimated 500,000 lives over the past 20 years. Government officials claim they were forced to spend billions on the fallout from painkillers and overdoses. They are looking for funds to strengthen treatment and law enforcement budgets. Many cases have been consolidated before a federal judge in Cleveland.
Executives at McKesson, Cardinal Health and AmerisourceBergen are accused of turning a blind eye to suspicious opioid shipments.
J&J is accused of having raised billions from the illegal marketing of its old opioid products. The four companies are facing legal battles across the United States over their role in the public health crisis.
McKesson, Cardinal Health and AmerisourceBergen are preparing to make closing arguments in a lawsuit in West Virginia over claims they flooded the state with millions of pills to generate billions in profits.
J&J is also currently facing allegations of wrongdoing in connection with opioid pain relievers in a lawsuit in California.
An Oklahoma judge ordered J&J to pay $ 465 million in 2019 after discovering that his marketing of opioids in the state was creating a public nuisance. The Oklahoma Supreme Court is weighing the drugmaker’s appeal against the verdict.
Despite the settlement, the New York City case will continue against six defendants, including Teva Pharmaceutical Industries Ltd and Endo International Plc. Endo also faces an upcoming lawsuit in Tennessee, where 27 municipalities are seeking $ 2.4 billion in damages.
“While no amount of money will ever make up for the millions of addictions, the hundreds of thousands of deaths or the countless communities decimated by opioids, that money will be vital to prevent any future devastation,” James said in a statement Tuesday. .
“We are delighted that the historic Nassau County lawsuit has held these companies accountable,” Hunter Shkolnik, one of the county’s attorneys, said in a text on Tuesday.
Under the terms of the global deal with J&J, McKesson and other distributors, local officials will have 40 days to persuade their cities and counties to participate, residents said.
Payments would be spread over 18 years for distributors and over nine years for J&J. States that sign the agreement will receive a base payment and then a bonus for the number of local entities that accept the agreement, the people added.
Local governments have decided to separately sue opioid makers, distributors, and drugstore suppliers – like Walmart Inc. – separately to avoid a repeat of what happened in the $ 246 billion settlement with the manufacturers. tobacco in 1998. Much of that money ended up in state coffers and was never earned. down to city and county level.
The consolidated case is In Re National Prescription Opioid Litigation, 17-md-2804, US District Court, Northern District of Ohio (Cleveland).