Drug maker Johnson & Johnson and three opioid distributors have agreed to pay $26 billion to settle thousands of government lawsuits blaming them for helping create a public-health crisis tied to their mishandling of the painkillers.
The deal—years in the making—calls for McKesson Corp., Cardinal Health Inc. and AmerisourceBergen Corp. to pay almost $21 billion to resolve allegations they turned a blind eye to suspiciously large opioid shipments, the companies and state attorneys general said Wednesday. J&J will pay $5 billion to settle claims it illegally marketed opioid medicines, which it stopped making last year.
The settlement marks a major step forward in litigation over the highly addictive drugs, which have been blamed on more than 500,000 deaths over two decades. States, cities and counties filed more than 3,000 suits against drug makers, distributors and pharmacies seeking compensation for billions spent battling the U.S. opioid epidemic.
The state of Illinois will be signing on to the settlement, Attorney General Kwame Raoul said in a statement today. If the agreement is finalized and there is full participation by all local governments, Illinois will get approximately $790 million, the statement says. The substantial majority of the money is to be spent on opioid treatment and prevention.
* From Attorney General Raoul’s office…
The agreement would resolve the claims of states and local governments across the country, including the nearly 4,000 that have filed lawsuits in federal and state courts. Following today’s agreement, states have 30 days to sign onto the deal, and local governments in the participating states will have up to 150 days to join to secure a critical mass of participating states and local governments. States and their local governments will receive maximum payments if each state and its local governments join together in support of the agreement.
The state of Illinois will be signing on to the settlement, making local governments eligible to participate. If the agreement is finalized nationwide, Illinois – if there is full participation by all local governments – will receive approximately $790 million.
• The three distributors collectively will pay up to $21 billion over 18 years.
• Johnson & Johnson will pay up to $5 billion over nine years with up to $3.7 billion paid during the first three years.
• The total funding distributed will be determined by the overall degree of participation by both litigating and non-litigating state and local governments.
• The substantial majority of the money is to be spent on opioid treatment and prevention.
• Each state’s share of the funding has been determined by agreement among the states using a formula that takes into account the impact of the crisis on the state – the number of overdose deaths, the number of residents with substance use disorder, and the number of opioids prescribed – and the population of the state.
Injunctive Relief Overview:
• The 10-year agreement will result in court orders requiring Cardinal, McKesson, and AmerisourceBergen to:
o Establish a centralized independent clearinghouse to provide all three distributors and state regulators with aggregated data and analytics about where drugs are going and how often, eliminating blind spots in the current systems used by distributors.
o Use data-driven systems to detect suspicious opioid orders from customer pharmacies.
o Terminate customer pharmacies’ ability to receive shipments, and report those companies to state regulators, when they show certain signs of diversion.
o Prohibit shipping of and report suspicious opioid orders.
o Prohibit sales staff from influencing decisions related to identifying suspicious opioid orders.
o Require senior corporate officials to engage in regular oversight of anti-diversion efforts.
• The 10-year agreement will result in court orders requiring Johnson & Johnson to:
o Stop selling opioids.
o Not fund or provide grants to third parties for promoting opioids.
o Not lobby on activities related to opioids.
o Share clinical trial data under the Yale University Open Data Access Project.
This settlement is a result of investigations by state attorneys general into whether the three distributors unlawfully failed to refuse to ship opioids to pharmacies that submitted suspicious drug orders, and engaged in deceptive and unfair conduct in violation of state law. Raoul and the attorneys general also investigated whether Johnson & Johnson marketed its opioid products in a deceptive and unfair manner and engaged in other fraudulent and unfair conduct in the sale of opioids.