The three largest US drug distribution companies and drugmaker Johnson & Johnson are on the verge of a $26 billion settlement that includes thousands of lawsuits over the toll of opioids across the US, two people with knowledge of the plans told the Associated Press.
As a precursor to the big deal, New York struck a deal Tuesday with distribution companies AmerisourceBergen, Cardinal Health and McKesson to settle ongoing testing in the state. That deal alone would generate more than $1 billion to offset the damage done by opioids. The trial is expected to continue, but the settlement leaves only three drugmakers as defendants.
“Today, we are holding them accountable for distributing more than $1 billion to New York communities ravaged by opioids for treatment, recovery and prevention efforts,” New York Attorney General Letitia James said in a statement Tuesday.
Those who gave details of the national settlement to the AP did so on condition of anonymity because they were not authorized to speak as the details are finalized.
The national agreement with the four companies is expected to be the largest single settlement in the complex universe of litigation over the opioid epidemic in the US. With the settlement of Johnson & Johnson in addition to deals being struck by OxyContin maker Purdue Pharma and generic drug maker Mallinckrodt, the three major manufacturers will no longer be a part of the cases, nor will the national drug distributor.
Other manufacturers, regional distribution companies and pharmacies will remain in case for now.
Cardinal Health declined to comment early Tuesday, and other distribution companies did not respond to requests for comment. But Johnson & Johnson reiterated in a statement that it is prepared to contribute up to $5 billion to the national agreement. The company had entered into an agreement with New York last month just before the trial started there.
“Progress continues to finalize this agreement and we remain committed to providing certainty for the parties involved and providing significant support for families and communities,” the company said. “The settlement is not an acknowledgment of liability or wrongdoing, and the company will continue to defend against any lawsuit that the final settlement does not resolve.”
Distribution companies face thousands of similar legal claims from state and local governments across the country and have been trying to settle them all for a long time. If a deal can be reached this year, the New York deal will become part of a national agreement.
State and local governments say distribution companies did not have the proper controls to prevent or prevent shipments to pharmacies that received large stocks of the potent and addictive painkiller. The companies have said they were filling orders for legal drugs placed by doctors – so they shouldn’t be to blame for the country’s addiction and overdose woes.
An Associated Press analysis of federal distribution data found that in 2012 enough prescription opioids were shipped for each person in the US for a 20-day supply.
And opioids – including both prescription drugs and illicit drugs such as heroin and illegally produced fentanyl – have been linked to more than 500,000 deaths in the US since 2000.
Under the New York agreement, all three companies will provide more than $1 billion to be used to mitigate the pandemic in the state. The money will be distributed in 18 annual payments, with the first payment coming this year.
The companies will also set up a national clearinghouse of data on opioid distribution, and the data will be monitored by an independent body. Johnson & Johnson will also agree not to produce any opioids for the next 10 years.
There are currently three trials of claims from government entities across the US, including the New York case, that companies should be held liable for the opioid crisis. One in California focuses entirely on drug manufacturers, and one that ends this month in West Virginia targets distributors-only. If an agreement is reached it can be terminated.
Other cases are in line to begin. The verdict was the only case of its kind in Oklahoma two years ago. There, a judge ordered Johnson & Johnson to pay $465 million, the only company not to settle before trial. The company is appealing against the decision.
The New York case is the largest trial ever—and the first—with a jury, rather than just a judge, deciding the case.
Johnson & Johnson settled for $230 million just before the case began. The remaining defendants are Teva Pharmaceutical Industries, Endo International and AbbVie, Inc.
With so many cases getting closer to trial, there have been a flurry of proposed or actual settlements on opioids. OxyContin maker Purdue Pharma declared bankruptcy as part of its effort to settle cases. It is proposing a restructuring that would use all future profits to fight the pandemic, as part of a deal worth about $10 billion over the company’s timeline. That plan will face some opposition at a confirmation hearing in US Bankruptcy Court next month.