In what’s being described as a “game-changer,” three major drug distributors and the pharmaceutical behemoth Johnson & Johnson have agreed to a $26 billion (with a “B”) settlement with states to resolve thousands of lawsuits over the country’s opioid crisis, officials announced Wednesday.
Multiple states, cities, and counties have accused four companies, including Cardinal Health, AmerisourceBergen, and McKesson, of playing a significant role in funneling a flood of opioid painkillers to communities across the U.S.
According to the Centers for Disease Control and Prevention, the drugs led to the overdose deaths of more than 500,000 people from 2009 to 2019, jumping by nearly 30%, reaching a record high of 93,000 in 2020 — likely due to the pandemic. The surge was driven by synthetic opioids like fentanyl, according to the CDC.
Pennsylvania attorney general Josh Shapiro said at a press conference announcing the settlement. “This was a person-made crisis. This epidemic was manufactured by an army of pharmaceutical executives.”
The agreement still requires the approval of more than 40 states and hundreds of cities and counties. If they accept the funds, cities, and states would be forced to drop any legal action against the companies in return, though the deal only covers the four companies and not other firms involved in the opioid industry. However, once it is finalized, it would result in billions of dollars flowing to states to be used for prevention, treatment, and recovery.
The agreement was the result of a bipartisan effort by the state attorneys general. According to Reuters, attorneys general from 15 states were involved in negotiating the deal, as were lawyers representing the more than 3,000 local governments around the country that have brought lawsuits seeking damages for the harms caused by opioids.
“We are not quite to the finish line yet, but we are making real progress,” said Tennessee attorney general Herb Slatery. “I want to emphasize how we work together,” Slatery said. “We are red states and blue states. We get along well, and we solve problems.”
But Bob Ferguson, Washington’s attorney general, announced that he plans to reject the deal saying that “The settlement is, to be blunt, not nearly good enough for Washington. It stretches woefully insufficient funds into small payments over nearly 20 years, to be shared among more than 300 Washington jurisdictions.”
Under the agreement, Johnson & Johnson will pay up to $5 billion over nine years, with up to $3.7 billion paid during the first three years, with
the other three drug distributors paying up to $21 billion over the next 18 years.
Michael Ullmann, the general counsel for Johnson & Johnson, said, “We recognize the opioid crisis is a tremendously complex public health issue, and we have deep sympathy for everyone affected. This settlement will directly support state and local efforts to make meaningful progress in addressing the opioid crisis in the United States.”
The companies said in a joint statement that they view the agreement as “an important step toward finalizing a broad settlement with states, counties, and political subdivisions.” Also stating that “The distributors remain deeply concerned about the impact the opioid epidemic is having on communities across the nation and remain committed to being part of the solution.”
Officials said nearly $2 billion of the $26 billion would go towards lawyers’ fees and other costs.
The state attorneys general noted the settlement was a civil one and was not associated with any criminal charges during Wednesday’s press conference.
And of course, the settlement does not include an admission of liability.