- Johnson & Johnson and the top three U.S. drug distributors agreed to pay as much as $26 billion to resolve thousands of lawsuits brought by state and local governments alleging the companies helped fuel the opioid epidemic in the U.S.
- States and U.S. territories, along with Washington D.C., now have until Aug. 21 to decide if they want to join the settlement, according to the agreement. Local governments will be able to opt in through Jan. 2 if their states agree to the deal. After each period, the companies will independently weigh whether enough governments have signed on to continue the process.
- Money would start to flow to state and local governments in the first half of 2022, though the deal stretches out payments for years. J&J has nine years to pay out its share of as much as $5 billion; the three distributors have 18 years to collectively dole out $21 billion.
The settlement will infuse communities with much-needed money to put toward opioid treatment and recovery while forcing the companies to change their ways, North Carolina Attorney General Josh Stein said in a statement announcing the deal. Stein, one of the lead negotiators, expects his state to receive about $750 million if all the local governments sign on.
Most of the money will go toward opioid treatment and prevention, according to the negotiators. The funds will be divvied up among states based on a formula that takes into the account factors including the number of overdose deaths, addicted residents and total population.
The deal also includes 10 years of restrictions on the companies. J&J won’t be able to sell opioids, engage in lobbying activity related to the drugs or fund third parties that promote opioids. The drugmaker, which had already halted U.S. sales of prescription opioids, would also share clinical trial data with the Yale University Open Data Access Project.
Drug distributors Cardinal, McKesson and AmerisourceBergen agreed to start a clearinghouse that would track the flow of drugs and get rid of "blind spots" that may have exacerbated the opioid crisis.
They will also set up systems to detect and stop suspicious orders from pharmacies, create guardrails to keep sales people from influencing decisions on such orders and institute regular oversight protocols for senior leadership at the companies.
The three distributors issued a joint statement saying they "strongly dispute" allegations that they fueled the opioid crisis, but view the settlement as a good way to resolve the litigation and bring relief to affected communities. J&J issued a similar statement, citing its concern about the epidemic while claiming its marketing and promotion efforts were "appropriate and reasonable."
It’s unclear how many states and local governments have to sign on to the settlement for each company to agree to pay their share. Already, Washington State's attorney general is criticizing the settlement as "woefully insufficient." There have been almost 4,000 lawsuits filed in federal and state courts, according to North Carolina.
Meanwhile, the opioid epidemic continues to rage. Last year, 93,000 people died from overdoses in the U.S., setting a record for a single year.