Skip to main content

‘Big Three’ Drug Distributors and Johnson & Johnson Reach $26 Billion Global Deal with State Regulators on Opioid Lawsuits


Opioid Case

Plotting a course to end years of litigation over their role in the opioid crisis, three of the nation’s largest drug distributors and a pharmaceutical giant agreed to a $26 billion proposed global settlement with a coalition of state attorneys general.

The agreement, which still requires approval of certain state and local governments, would put Johnson & Johnson out of the opioid business, just as an agreement earlier this month did to the Sackler family.

Under that agreement, the so-called “big three” distributors—McKesson, Cardinal Health, and Amerisource Bergen—would distribute a total of $21 billion to states and localities over the next 18 years to states and localities, and Johnson & Johnson will pay up to $5 billion over nine years, up to $3.7 billion of that paid during the first three years.

The total settlement amount will depend on how many states and localities agree to participate. While New York has already agreed to the deal, other states have 30 days to sign on, and local governments will have up to 150 days to decide whether to join.

‘Fuel the Fire of Opioid Addiction’

According to the office of New York Attorney General Letitia James (D), the Empire State will receive up to $1.25 billion of that amount to “fund prevention, treatment, and recovery programs.”

“The numerous companies that manufactured and distributed opioids across the nation did so without regard to life or even the national crisis they were helping to fuel,” James said in a statement on Wednesday. “Johnson & Johnson, McKesson, Cardinal Health, and Amerisource Bergen not only helped light the match, but continued to fuel the fire of opioid addiction for more than two decades. Today, we are holding these companies accountable and infusing tens of billions of dollars into communities across the nation, while taking significant steps to hold these companies accountable.”

“While no amount of money nor any action can ever make up for the hundreds of thousands of lives lost or the millions more addicted to opioids, we can take every action possible to avoid any future devastation,” James added.

In 2019, James filed the country’s most extensive litigation against drug companies over the opioid crisis, including Purdue Pharma, which earlier this month agreed to a $4.5 billion settlement to fund prevention, treatment, and recovery programs. New York is still pursuing separate lawsuits against Endo Health Solutions, Teva Pharmaceuticals USA, and Allergan Finance.

Like many such agreements, the proposed settlement does not come with an admission of wrongdoing. The “big three” distributors asserted in a press release that they “strongly dispute the allegations” against them in the lawsuits, but they say the deal will deliver “meaningful relief to communities across the United States.”

Johnson & Johnson issued a more conciliatory statement.

“We recognize the opioid crisis is a tremendously complex public health issue, and we have deep sympathy for everyone affected,” the company’s executive vice president Michael Ullmann said in a statement. “This settlement will directly support state and local efforts to make meaningful progress in addressing the opioid crisis in the United States.”

A ‘Resounding No’ from West Virginia

If approved, the proposed settlement would resolve the claims of nearly 4,000 entities that have filed lawsuits in federal and state courts against the four companies. New York has already signed on to today’s agreement, and Pennsylvania and Michigan’s top prosecutors—Josh Shapiro (D) and Dana Nessel (D), respectively—signaled their eagerness to follow suit. Other states and their local governments will receive maximum payments if each state and its local governments join together in support of the agreement.

But while the deal is structured so that the states and localities will receive the maximum payment if they all join, one state has already signaled it’s not likely to be a part of it.

“West Virginia is a resounding no on these agreements and will continue to litigate and negotiate outside the framework of today’s announcement,” West Virginia Attorney General Patrick Morrisey said Wednesday, according to a report in West Virginia Metro News. “I will keep fighting to protect West Virginia and will not allow larger states to dictate how we hold defendants accountable for their actions.”

West Virginia, however, was not part of the coalition.

New York’s attorney general took the lead in state negotiations with fellow top prosecutors from California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, North Carolina, Ohio, Pennsylvania, Tennessee, and Texas.

Of that baker’s dozen, all but three—Delaware, Georgia, and Texas—indicated they will be joining.

Those attorneys general say that decision will help ease suffering in their states. Pennsylvania could receive up to $1 billion under the global agreement, while Michigan could receive up to nearly $8 million.

Ultimately, if enough states and localities agree to the global settlement, it would resolve the nearly 4,000 claims that have been filed in federal and state courts against McKesson, Cardinal Health, Amerisource Bergen, and Johnson & Johnson.

Each state’s share is determined by a formula, previously agreed to by the states, that considers the impact of the opioid crisis on the state, and the state’s population.

‘Significant Industry Changes’

The proposed agreement also includes “significant industry changes that aim to end the opioid epidemic and prevent this type of crisis from occurring again,” according to the press release from James’ office.

Those changes include court orders that would require McKesson, Cardinal, and Amerisource Bergen to 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.”

Throughout the sprawling litigation, attorneys general have sought greater disclosure from the companies to alert scholars, journalists and the public about how companies made, marketed and sold opioids to the public. Similar provisions were found in the agreements with the consulting firm McKinsey, Purdue Pharma, and the Sackler family.

According to the attorneys general, this system would generally establish oversight of pharmacies selling opioids, and would include ways for the three companies to identify suspicious opioid orders and to potentially stop shipments of opioids to pharmacies that are not complying.

Johnson & Johnson, under the agreement, would stop selling opioids completely, and would be prohibited from funding or providing grants to third parties for promoting opioids. Johnson & Johnson would also be barred from lobbying on activities relating to opioids, and would share clinical trial data under the Yale University Open Data Access Project.

[Image via FRED TANNEAU/AFP/Getty Images]

Have a tip we should know? [email protected]

Filed Under:

Follow Law&Crime: