The long-standing effort by state and local governments in the US to force the pharmaceutical industry to help pay to solve a nationwide opioid addiction and overdose crisis took a major step forward on Tuesday when local government attorneys announced they were were about to reach a $26 billion settlement. with the country’s three largest drug distribution companies and drug maker Johnson & Johnson.
Under the deal, Johnson & Johnson would not produce opioids for at least ten years. And AmerisourceBergen, Cardinal Health and McKesson are sharing prescribing information under a new system designed to stop the avalanches of pills that arrived in some regions about a decade ago.
Local government lawyers said all details could be shared within days. That wouldn’t be the end of the deal, though; each state would have 30 days to decide whether to join. And local authorities then have five months to decide. If governments don’t cooperate, settlement totals would drop.
“This is a nationwide crisis, and it perhaps could and should have been addressed by other branches of government,” Paul Geller, one of the leading attorneys representing local governments in the US, said in a conference call with reporters Tuesday. “But this is really an example of using lawsuits to solve a national problem.”
If approved, the settlement will likely be the largest of many opioid dispute settlements. While it means billions to lawyers who have worked on the cases, it is expected to raise more than $23 billion for control and mitigation efforts to get treatment for people who are addicted, along with other programs to address the crisis. to grab. The money would come in 18 annual payments, with the largest amounts coming in years to come.
The deal reflects a deal the companies have been pushing, sometimes publicly, for two years.
Johnson & Johnson reiterated in a statement that it is willing to contribute up to $5 billion to the national settlement.
“Progress continues to be made in finalizing this agreement and we remain committed to providing assurance to stakeholders and essential assistance to families and communities in need,” the company said. “The settlement is not an admission of liability or misconduct, and the company will continue to defend itself against any dispute that the final agreement does not resolve.”
But Cardinal Health declined to comment early Tuesday and the other distribution companies did not respond to requests for comment.
According to an Associated Press tally, there have been at least $40 billion in completed or proposed settlements, penalties and fines between governments and opioid tolls since 2007, excluding one between the federal government and OxyContin maker Purdue Pharma, in which most of the $8.3 billion would be waived. Purdu tries to reach a deal through bankruptcy court that could be worth $10 billion over time; a hearing on that plan is scheduled for August.
Other deals are possible. While a growing number of companies in the industry have made deals, some manufacturers have not — and not a single pharmacy has made settlements nationwide.
But the total amount in the settlements is well below estimates of the financial cost of the epidemic. The Society of Actuaries found that the cost of the crisis in the US was $630 billion from 2015 to 2018, with most of the costs borne by the private sector. And the White House Council of Economic Advisers estimated the cost for a year at about $500 billion nationally.
Unlike the tobacco settlements reached in the 1990s, governments have agreed to spend money they bring in from opioid-related settlements to deal with the opioid crisis.
In a joint statement, the attorneys general of Connecticut, Delaware, Florida, Louisiana, Massachusetts, New York, North Carolina, Ohio, Pennsylvania and Tennessee said the settlement talks with the four companies are “potentially nearing completion,” and that “we are looking looking forward to bringing much-needed dollars to our states to help people recover from opioid addiction and fundamentally change the opioid manufacturing and distribution industry so that this never happens again.
But they still have choices ahead of them about how exactly they do it.
“Is it a nice piece of change?” asked Ryan Hampton, who is recovering from an opioid addiction and is a Las Vegas-based advocate for policies to tackle the overdose crisis. “Sure. Will it get where it needs to go? The jury is still out on that.”
Even before the settlement plan was unveiled on Tuesday, a group of advocates and public health experts began advocating for the spending of settlement money to tackle the opioid crisis..
“It’s money that can do a lot of good when used right,” said Joshua Sharfstein, a vice dean at the Johns Hopkins Bloomberg School of Public Health who is leading the effort. “It’s very important to use it properly to save lives because it’s coming at the peak of the overdose epidemic.”
Private attorneys on the Plaintiffs’ Executive Committee who represent local governments in opioid lawsuits across the country announced some details of the settlement on Tuesday even before it was completed. The decision to do so was in part because New York State reached a settlement Tuesday with the three major distribution companies during a lawsuit set in a state court on Long Island.
The New York deal, valued at more than $1 billion, represents the portion of the national deal it will receive from distributors when the national deal closes. New York also reached a similar deal with Johnson & Johnson worth $230 million last month.
“Today, we hold them accountable for delivering more than $1 billion more to New York’s opioid-ridden communities for treatment, recovery and prevention,” New York Attorney General Letitia James said in a statement Tuesday.
The trial is expected to continue, but the settlement leaves only three drug manufacturers as defendants.
Other manufacturers, regional distribution companies and pharmacies will remain in New York and other cases for the time being.
State and local governments say distribution companies lacked the proper controls to flag or discontinue shipments to pharmacies that received outsized stocks of potent and addictive prescription painkillers. The companies have maintained that they were fulfilling orders of legal drugs placed by doctors — so they shouldn’t be blamed for the country’s addiction and overdose crisis.
An Associated Press Analysis of Federal Distribution Data found that enough prescription opioids were shipped in 2012 for every person in the U.S. to have a 20-day supply.
And opioids — including both prescription and illegal drugs such as heroin and illegally produced fentanyl — have been linked to more than 500,000 deaths in the US since 2000. The number of cases reached an all-time high in 2020.