On July 21, 2021, New York Attorney General Letitia James announced a proposed $26 billion agreement with three drug distributors (McKesson Corporation, Cardinal Health Inc., and Amerisource Bergen Drug Corporation) and Johnson & Johnson over their roles in the opioid epidemic.
Financial Relief
Under the proposed settlement, the three distributors will collectively pay up to $21 billion over the course of eighteen years, while Johnson & Johnson will pay up to $5 billion over nine years ($3.7 billion of that being paid during the first three years). The total amount paid by the companies will be determined by the participation by state and local governments, including those who are involved in the litigation and those who are not. Each state’s portion of the funding has been determined using a formula that takes into account the impact of the crisis on the state (by looking at the number of overdose deaths, the number of residents with substance use disorder, and the number of opioids prescribed) as well as the state’s population. The amounts agreed to by the companies can decrease if not enough states sign on, and the companies also have the ability to walk away from this settlement if they decide that the level of participation “does not buy them the global peace they are seeking to put the lawsuits behind them.”
Injunctive Relief
In addition to the financial settlement, the proposed agreement also includes “significant industry changes that aim to end the opioid epidemic and prevent this type of crisis from occurring again.”
McKesson, Cardinal Health, and Amerisource Bergen would need to do the following under court orders that will be made under the proposed order:
- Establish a centralized independent clearinghouse to provide aggregated data, including analytics about where drugs are going
- Implement data-driven systems to detect suspicious opioid orders from customer pharmacies and report and prohibit the shipping of those orders
- Prohibit sales staff from influencing decisions related to identifying suspicious opioid orders
- Terminate customer pharmacies’ ability to receive shipments and report companies to state regulators when they show certain signs of diversion
- Require senior corporate officials to engage in regular oversight of anti-diversion efforts
Johnson & Johnson would be required to do the following under court orders mandated by the proposed agreement:
- Stop selling opioids
- Stop funding/providing grants to third parties for promoting opioids
- Stop lobbying on any activities related to opioids
- Share clinical trial data under the Yale University Open Data Access Project.
What Comes Next?
The proposed global settlement, which must be approved by a substantial number of states and local governments across the country, would resolve the claims of almost 4,000 entities that have filed lawsuits in federal and state courts against the four companies.
New York signed onto the agreement and other states have an additional 30 days to sign onto the deal, while local governments in the participating states have up to 150 days to join. If each state and its own local governments join together and support the agreement, each party will receive maximum payments from the global settlement.
Additionally, there does remain a handful of defendants involved in opioid cases throughout the country. Mallinckrodt LLC and Rochester Drug Cooperative each have separate cases moving throughout the United States Bankruptcy Court. The case against Purdue Pharma and the Sackler family is also moving through Bankruptcy Court.
Three remaining defendants in a suit filed by Attorney General James – Endo Health Solutions, Teva Pharmaceuticals USA, and Allergan Finance – will continue in state court.
“The numerous companies that manufactured and distributed opioids across the nation did so without regard to life or even the national crisis they were helping to fuel,” said Attorney General James. “Johnson & Johnson, McKesson, Cardinal Health, and Amerisource Bergen not only helped light the match, but continued to fuel the fire of opioid addiction for more than two decades. Today, we are holding these companies accountable and infusing tens of billions of dollars into communities across the nation, while taking significant steps to hold these companies accountable. Johnson & Johnson will stop the sale of opioids nationwide, and McKesson, Cardinal Health, and Amerisource Bergen are finally agreeing to coordinate and share their data with an independent monitor to ensure this wildfire does not continue to spread any further. While no amount of money nor any action can ever make up for the hundreds of thousands of lives lost or the millions more addicted to opioids, we can take every action possible to avoid any future devastation.”