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$26 billion settlement with opioid distributors, J&J expected to be announced in the next few days

After months of gridlock and years of litigation, thousands of communities suing the nation’s three largest opioid distributors and drugmaker Johnson & Johnson are expected to finalize a plan in the coming days to move forward with a $26 billion global settlement.
After months of gridlock and years of litigation, thousands of communities suing the nation’s three largest opioid distributors and drugmaker Johnson & Johnson are expected to finalize a plan in the coming days to move forward with a $26 billion global settlement.Mark Lennihan/Associated Press

After months of gridlock and years of litigation, thousands of communities suing the nation’s three largest opioid distributors and drugmaker Johnson & Johnson are expected to finalize a plan in the coming days to move forward with a $26 billion global settlement that would resolve ongoing and future lawsuits filed by states, cities, and other jurisdictions, according to a team of lawyers representing the communities in the negotiations.

The deal could set aside funds for governments as soon as the end of September, according to those familiar with the negotiations, and release Johnson & Johnson, McKesson Corp., Cardinal Health, and AmerisourceBergen from the behemoth, nationwide litigation brought by communities devastated by the opioid crisis. This long-awaited resolution in what is considered one of the most complex civil lawsuits in modern history would come as opioid overdose deaths have claimed more than 500,000 lives since 1999. The toll continues to climb, with an estimated 69,710 Americans dying of opioid overdoses in 2020.

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Brokered by a bipartisan group of about 13 state attorneys general, including Maura Healey of Massachusetts, and lawyers for local governments, the deal still requires several steps before formal agreement, including a vote on it by all parties in the litigation, according to The New York Times.

Attorneys representing the communities said Tuesday that the framework will soon be released and offered new details about the deal.

It includes incentives to induce more plaintiffs to come on board, such as bigger up front payments. Unlike earlier proposals, however, this one appears to have the critical backing of more than 40 states and includes a sweetener of $2 billion in plaintiff attorneys’ fees.

As part of the proposed settlement, the distributors will agree to share information about their shipments of controlled substances, offering for the first time a full picture of where pain pills are sent.

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The national settlement would “begin the work of changing the conduct (of the companies) that in turn will save lives, as well as providing an infusion of dollars to assist local governments and the states in fighting the opioid crisis,” Elizabeth Cabraser, one of the attorneys involved with the negotiations, said on a media conference call Tuesday. “It’s a long-running crisis. It needs to stay top of mind.”

The agreement will still need broad support. At least 44 states, 95 percent of cities, counties, and others suing the companies and 90 percent of nonlitigating jurisdictions must sign on to the deal to receive a portion of the money, according to the sources, who spoke on the condition of anonymity because they were not authorized to speak publicly.

Native American nations are separately negotiating settlements with the companies and have not yet reached a deal, said Lloyd Miller, a lawyer representing tribes.

However, the tentative settlement is the closest the protracted legal battle has come to reaching an end.

Previous reporting indicated that a settlement for the four companies was looming in November 2020, but the sides were further apart at that time than publicly known, sources close to the negotiations said.

One of the points that the attorneys had not resolved until recent months, they said, was that the companies wanted global peace, meaning they wanted to curb future litigation from springing up after reaching a resolution for the ongoing cases. On the other side, cities and counties aimed to increase the amount of money they would be guaranteed.

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Litigation has been ongoing for years and continues across the country. A last-minute deal with two Ohio counties before what would have been the first federal trial in 2019 cost the distributors $215 million. Trials with Cabell County and the city of Huntington in West Virginia and New York state are ongoing.

New York Attorney General Letitia James on Tuesday announced a $1.1 billion settlement with the three distributors that will remove the companies from the state’s ongoing opioid trial on Long Island. The payments will start in two months and be spread out over 17 years, James’s office said.

“While no amount of money will ever compensate for the millions of addictions, the hundreds of thousands of deaths, or the countless communities decimated by opioids, this money will be vital in preventing any future devastation,” James said in a statement.

Johnson & Johnson agreed last month to pay up to $230 million to settle opioid claims in New York.

Jurisdictions where settlements have been reached or trials are already underway would not be eligible under this deal. In other places, where coronavirus-related delays stalled trials, a day in court could never come if the settlement is agreed upon.

Nationally, pharmacies such as CVS, Walgreens, and Walmart are still embroiled in litigation.

From 2006 to 2014, there were more than 100 billion prescription hydrocodone and oxycodone pills distributed in the country. Since 1997, hundreds of thousands have died, and millions more have struggled with opioid abuse. The lawsuits against the companies allege distributors failed to flag and halt a rising tide of suspicious orders of pain pills as communities were inundated.

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The companies have denied any wrongdoing. Distributors argue their role was to make sure medicine prescribed by licensed doctors and dispensed by pharmacies was available for patients.

Representatives for Cardinal Health and AmerisourceBergen declined to comment. McKesson did not immediately respond to requests for comment Monday night.

Johnson & Johnson said in a statement that the $5 billion it plans to contribute to the settlement to resolve litigation is not an admission of liability or wrongdoing, adding it will continue to fight in the lawsuits if a final agreement isn't reached.

“There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need,” the company said.