Johnson & Johnson and Drug Distributors Reach $26 Billion Opioid Settlement
A large majority of states must sign on in the next 30 days for the agreement to proceed
Four drug companies have agreed to a $26 billion settlement for their respective roles in the opioid crisis.
A bipartisan group of state attorneys general on Wednesday announced the massive settlement had been reached with distributors McKesson, Cardinal Health and AmerisourceBergen and drugmaker Johnson & Johnson to resolve claims that each helped fuel the nationwide epidemic.
"While the companies strongly dispute the allegations made in these lawsuits, they believe the proposed settlement agreement and settlement process it establishes are important steps toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities across the United States," the three distributors said in joint statement, according to The New York Times.
Should the deal be finalized, the three distributors are expected to pay a combined $21 billion over the next 18 years. Johnson & Johnson would pay the remaining $5 billion over nine years, with up to $3.7 billion paid in the first three years.
States have 30 days to review the settlement. A large majority of states must sign on for it to proceed, though an exact number has not been specified.
The more local governments agree to the deal, the more money each state will receive. In order to reap 100% of the apportioned funds, states must have nearly every municipality get on board.
As part of the settlement, thousands of states and local governments would drop lawsuits against the companies and also pledge not to bring any future action.
Washington state's attorney general Bob Ferguson opted not to join the deal and thinks the deal is "not nearly good enough" for his state.
"It stretches woefully insufficient funds into small payments over nearly 20 years," Ferguson said, according to the Times, later adding that he is looking forward to his state's day in court.
"We are looking forward to walking into a Washington state courtroom to hold these companies accountable for their conduct. Washington families devastated by the opioid epidemic deserve their day in court."
Washington's trial against the distributors is set to begin Tuesday, Sept. 7. Johnson & Johnson's trial is slated for January.
More than $2 billion of the $26 billion deal would go toward paying the private lawyers hired by counties, municipalities and some states for this legal battle. Elizabeth Burch, a law professor at the University of Georgia, told the Times that lawyers for the case likely are pushing for the agreement.
"The lawyers will do a lot of the strong-arming of their clients, the localities, into agreeing to the settlements, because if the deal doesn't go through, the lawyers won't get paid," she said.
In the meantime, trials against all four companies continue across the country. Johnson & Johnson is currently fighting charges in California state court while a West Virginia trial in federal court against the distributors is ongoing.
According to the Centers for Disease Control and Prevention, the U.S. saw a 29.4% increase in drug overdose deaths in 2020 with the highest number ever recorded at 93,331. 72,151 similar deaths were projected in 2019.