Pharmaceutical Distributors and J.&J. Announce $26 Billion Deal to End Opioids

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After two years of wrestling, the country’s three major drug distributors and a pharmaceutical giant have reached a $26 billion deal with states that will free some of the largest companies in the industry from all legal liability in the opioid epidemic.

The announcement was made Wednesday afternoon by a bipartisan group of state attorneys general.

The proposal will now go to every state and municipality in the country for approval. If enough people formally sign up, billions of dollars could begin to be unleashed from companies to help communities pay for addiction treatment and prevention services and other high financial costs of the epidemic.

In response, states and cities would drop thousands of lawsuits against companies and promise not to take any action in the future.

The deal only binds these four companies (drug distributors Cardinal Health, AmerisourceBergen McKesson, and Johnson & Johnson) and leaves thousands of other lawsuits against many other drug suspects, including manufacturers and pharmacy chains, in a massive lawsuit across the country.

But these four companies are widely seen among the defendants with the deepest pockets.

Michael Ullmann, Johnson & Johnson’s vice president and general counsel, said in an emailed statement: “We recognize that the opioid crisis is an extremely complex public health issue and we have deep sympathy for all those affected. It will directly support state and local efforts to make meaningful progress in addressing the opioid crisis.”

Distributors did not immediately respond to requests for comment.

Distributors, who are required by law to monitor the quantity of prescription drug shipments, have been accused of ignoring them for two decades as pharmacies across the country order millions of pills for their communities. Plaintiffs also claim Johnson and JohnsonIt contracts with poppy growers in Tasmania to supply opioid materials to manufacturers and makes their own fentanyl patches for pain sufferers.

According to federal data, from 1999 to 2019, 500,000 people died from overdose to prescription and street opioids. Overdose deaths from opioids It reached a record level in 2020, The Centers for Disease Control and Prevention said earlier this month.

Under the agreement, the country’s three distributors will pay for 18 years. Johnson & Johnson will pay $5 billion over nine years. A key feature of the deal is that distributors set up an independent clearinghouse to track and report on each other’s shipments, a new and unusual mechanism aimed at making data transparent, and immediately send red flags when large orders are placed.

A separate agreement between the companies and the Native American tribes is still being negotiated.

The settlement was submitted by attorneys general from North Carolina, Pennsylvania, New York, Delaware, Louisiana, Tennessee, and Connecticut.

Wednesday’s announcement shows that a critical element has been met – the vast majority of states agree in principle. But before any control is cut off, there are daunting obstacles left behind.

The states and the District of Columbia will have 17 days to closely examine the deal, including how much each will be paid over 30 years. Many states have not yet had a chance to review the treaty. And many allow their attorney general to sign, while others require legislators to be consulted. An undetermined number of states must sign for the agreement to continue. If this threshold is not met, companies may walk away.

While the states decide, several California states have filed lawsuits against Johnson & Johnson in state court, and a local West Virginia lawsuit against distributors will continue in federal court.

States should also begin to persuade their local areas to accept the treaty, including those who have already filed and those who have not. The more local governments that sign up, the more money each state receives.

“Lawyers will powerfully arm their clients, locals, to accept deals, because if the deal doesn’t happen, lawyers won’t be paid,” said Elizabeth Burch. Following the case closely, Prof. from the University of Georgia.

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