Years of effort by state and local governments in the US to force the drug industry to help fix a nationwide opioid addiction and overdose crisis took a major step forward on Tuesday when lawyers for local governments announced that they would 26 billion are on the verge of settlement. Along with the country’s three largest drug distribution companies and drug maker Johnson & Johnson.
Under the deal, Johnson & Johnson will not produce any opioids for at least a decade. And AmerisourceBergen, Cardinal Health and McKesson share information set forth under a new system aimed at stopping the avalanche of bullets that hit some areas nearly a decade ago.
Lawyers for local governments said that full details could be shared within days. That won’t be the end of the deal though; Each state will have 30 days to decide whether to join. And after that local governments will have five months to decide. If governments choose not to, the total settlement will be reduced.
“This is a nationwide crisis, and it probably should have been addressed by other branches of government,” Paul Geller, one of the leading attorneys representing local governments across America, said in a conference call with reporters on Tuesday. said. “But this is really an example of the use of litigation to fix a national problem.”
If approved, the settlement would be the largest of several settlements for opioid litigation. While this means billions for the lawyers who have worked on the cases, it is expected that more than $23 billion will go to help treat addicts, along with other programs to address the crisis. reduction and mitigation efforts will help. The money would come in 18 annual payments, the largest amount over the next several years.
The deal echoes one that the companies have been pursuing publicly for sometime over two years.
Johnson & Johnson reiterated in a statement that it stands ready to contribute up to $5 billion to the national agreement.
“Progress continues to finalize this agreement and we remain committed to providing certainty for the parties involved and providing critical 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.”
But Cardinal Health declined to comment early Tuesday, and other distribution companies did not respond to requests for comment.
An Associated Press tally found that since 2007 there have been at least $40 billion in full or proposed settlements, penalties and fines between governments and opioid tolls, including one between the federal government and OxyContin maker Purdue Pharma. No, most of which $8.3 billion will be forgiven. Purdue is trying to reach a deal through bankruptcy court that could be worth $10 billion over time; A hearing on that plan is scheduled for August.
Other deals are possible. While a growing number of companies in the industry have struck deals, some manufacturers haven’t — and no pharmacy companies have struck nationwide settlements.
But the total amount in settlements is well below estimates of the financial cost of the pandemic. The Society of Actuaries found that the crisis cost the US $630 billion from 2015 to 2018, most of which was borne by the private sector. And considering the economic impact of those, the White House Council of Economic Advisors said, the cost a year nationally was roughly $500 billion.
Unlike the tobacco settlements that arrived in the 1990s, governments have agreed to spend the money brought in from opioid-related settlements to tackle the opioid crisis.
In a joint statement, the attorney generals for Connecticut, Delaware, Florida, Louisiana, Massachusetts, New York, North Carolina, Ohio, Pennsylvania and Tennessee said settlement talks with the four companies are “potentially nearing their completion,” and He added, “We look forward to bringing much-needed dollars to our states to help people recover from opioid addiction and to fundamentally transform the opioid manufacturing and distribution industries so that this never happens again.”
But they still have further options in how they do it.
“Is this a good chunk of change?” Ryan Hampton, who is recovering from an opioid addiction and is a Las Vegas-based advocate for policy to address the overdose crisis. “Sure. Will it go where it needs to go? The jury is still out on that.”
Even before the settlement plan was unveiled on Tuesday, a group of public health advocates and experts began calling for any settlement money to be spent to address the opioid crisis.
“It’s money that can do great things, if it’s used,” said Joshua Scharfstein, vice dean of the Johns Hopkins Bloomberg School of Public Health. “It’s really important to use it well to save lives because it’s approaching the peak of the pandemic in extreme amounts.”
Private attorneys on the plaintiffs’ executive committee, which represents local governments in opioid lawsuits nationwide, announced some details of the settlement on Tuesday, ahead of its completion. The decision to do so was partly because New York state reached a settlement Tuesday with three big distribution companies amid an ongoing trial in a state court on Long Island.
The New York deal, worth more than $1 billion, represents that portion of the national deal that will be received from distributors upon finalization of the national deal. A similar $230 million deal was struck with Johnson & Johnson last month in New York.
“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.
The trial is expected to continue, but the settlement leaves only three drugmakers as defendants.
Other manufacturers, regional distribution companies and pharmacies will remain in New York and other cases for now. Closing arguments in the West Virginia trial against distributors are expected to proceed as scheduled next week. Attorney General Patrick Morris said the state would probably not agree to the terms.
“I will continue to fight to protect West Virginia and will not allow the larger states to decide how we hold defendants accountable for their actions,” he said in a statement Tuesday.
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 — both prescription drugs and including both heroin and illegally produced fentanyl — have been linked to more than 500,000 deaths in the US since 2000. The number of cases reached a record high in 2020.