In mid-April 2022, Alabama announced that it reached $276 million in settlements with Johnson & Johnson, McKesson Corp., and Endo International PLC, resolving claims that the companies fueled the opioid crisis.
Alabama previously accused McKesson of failing to prevent the diversion of opioids for illicit use. All three companies were said to have engaged in deceptive marketing practices that downplayed the addiction risk of opioids. All three companies have denied any wrongdoing.
McKesson has the largest share of the settlement, paying $141 million while Johnson & Johnson agreed to pay $70.3 million, and Endo International agreed to pay $25 million. The three companies will also pay a combined $40 million in attorneys’ fees.
The $141 million from McKesson will be paid over the course of nine years. When compared to the national settlement, Alabama would have received only $115.8 million paid out over 18 years.
Johnson & Johnson agreed to pay its $70.3 million in a lump-sum payment this year. While Alabama would have received the same amount in the national settlement, it would have been paid out over nine years (not in one lump sum). Johnson & Johnson also notated that the settlement is not an admission of any wrongdoing and that the company no longer distributes its prescription opioids, and that its drugs accounted for less than 1% of total opioid prescriptions in both Alabama and the United States.
Under the Endo settlement, Alabama will receive the $25 million in a lump-sum payment. Two states with populations similar to Alabama settled with Endo for 26% and 35% of the total amount that Alabama was able to obtain.
All of the settlement funds are to be allocated towards remediating the harms caused by the opioid crisis in the state. The share of each settlement that goes toward the state government will be deposited into the State’s General Fund and the Alabama legislature will work to determine the best use of that funding. In making that decision, they will be able to review the past two and a half years of work by the Alabama Opioid Overdose and Addiction Council to determine where they money is needed the most.
Attorney General Marshall affirmed his prior decision to not participate in the national opioid settlements, saying, “These three settlement agreements affirm my decision to decline participation in the national opioid settlements, which did not adequately acknowledge the unique harm that Alabamians have endured and would have redirected millions of dollars to bigger states that experienced a less severe impact.”
Alabama’s claims against Purdue Pharma, Mallinckrodt, and Insys, are still outstanding.