The Latest Litigation Update in the Fight Against Opioids: $26 Billion Deal That Lets Top Pharma Companies Off the Hook

Johnson & Johnson, Cardinal Health, AmerisourceBergen and McKesson have reached a $26 billion deal with state attorneys general that would release them from all civil liability in the opioid epidemic.
By: | August 6, 2021

After years of litigation and massive jury verdicts, three firms are eyeing an end to lawsuits over their role in the opioid epidemic.

Johnson & Johnson and the drug distributors Cardinal Health, AmerisourceBergen and McKesson have reached a $26 billion deal with state attorneys general that would release the companies from all civil liability in the opioid epidemic, according to reporting from the New York Times.

The statement announcing the deal was released by attorneys general from North Carolina, Pennsylvania, New York, Delaware, Louisiana, Tennessee and Connecticut in late July.

The Deal at a Glance

  • Under the deal, the nation’s three distributors would be on the hook for $21 billion in payments made over 18 years.
  • Johnson & Johnson would pay five billion dollars over nine years, if the deal goes through.
  • States would receive differing amounts of money based on how affected they were by the opioid epidemic. Tennessee could receive more than $500 million and North Carolina could receive up to $750 million.
  • As part of the agreement, the distributors would establish an independent clearinghouse to track and report one another’s shipments of opioids.
  • Other companies are working on negotiating their own deals, leaving thousands of other lawsuits still on the docket. OxyContin makers Purdue Pharma and the Sackler family are negotiating a settlement of at least $4.5 billion with plaintiffs as part of their bankruptcy restructuring.

Next Steps

In order for the deal to take effect, a majority of states need to sign on, though the companies have not specified what number they’re looking for and states attorneys general did not say how many states are on board with the agreement.

The deal is now in the hands of states and municipalities for review and formal approval. All states and Washington D.C. have 30 days to review the agreement, including how much money they would receive.

The large number of attorneys general who announced the deal suggests that a large number of states may have already signed on.

One state, Washington, has already announced that it will not sign on to the deal.

“The settlement is, to be blunt, not nearly good enough for Washington,” Washington State Attorney General Bob Ferguson told the New York Times. Ferguson cited insufficient funds paid over a long period of time as one of the reasons they would not sign onto the agreement.

The deal would release companies that have already been hit by opioid lawsuits from further litigation. In 2019, an Oklahoma judge ordered Johnson & Johnson to pay $572 million to the state over the opioid epidemic.

This deal comes as the isolation brought on by the COVID-19 pandemic is causing the country’s opioid crisis to worsen.

In 2020, opioid overdose deaths hit a record high of 93,000 deaths, the CDC reported. In total, more than half a million people in the U.S. have died from prescription and illicit opioids since 1999. &

Courtney DuChene is an associate editor at Risk & Insurance. She can be reached at [email protected]

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