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4 drug companies agree to pay $26 billion to resolve opioid lawsuits

The agreement still requires the approval of more than 40 states and hundreds of cities and counties.

Three major drug distributors and the pharmaceutical giant Johnson & Johnson have agreed to a $26 billion settlement with states to resolve thousands of lawsuits over the country's opioid crisis, officials announced Wednesday.

The four companies — which also include Cardinal Health, AmerisourceBergen and McKesson — were accused by states, cities and counties of playing a significant role in funneling a flood of opioid painkillers to communities across the U.S. The drugs led to the overdose deaths of more than 500,000 people from 2009 to 2019, according to the Centers for Disease Control and Prevention.

“This was a person-made crisis," Pennsylvania attorney general Josh Shapiro said at a press conference announcing the settlement. "This epidemic was manufactured by an army of pharmaceutical executives.”

The agreement still requires the approval of more than 40 states and hundreds of cities and counties. Once it is finalized, it would result in billions of dollars' flowing to states to be used for prevention, treatment and recovery.

Image: Medics care for a man who was found unresponsive after overdosing on an opioid in the Boston suburb of Salem, Mass., on Aug. 9, 2017.
Medics care for a man who was found unresponsive after overdosing on an opioid in the Boston suburb of Salem, Mass., on Aug. 9, 2017.Brian Snyder / Reuters file

"We are not quite to the finish line yet, but we are making real progress," said Tennessee attorney general Herb Slatery.

Slatery noted that the agreement was the result of a bipartisan effort by the state attorneys general.

"I want to emphasize how we work together," Slatery said. "We are red states and blue states. We get along well and we solve problems."

But one state attorney general, Bob Ferguson of Washington, announced that he plans to reject the deal.

“The settlement is, to be blunt, not nearly good enough for Washington," Ferguson said in a statement released Wednesday afternoon. "It stretches woefully insufficient funds into small payments over nearly 20 years, to be shared among more than 300 Washington jurisdictions."

The settlement was announced a day after NBC News and other media outlets reported that it was close to being finalized.

On Tuesday, Paul Geller, one of the lead lawyers representing cities and counties, described the settlement as a "game changer" for parts of the country hit hard by the opioid epidemic.

"There is no question we are too late for some families, but you've got to start somewhere and start sometime, and better now to really start to make these changes in local regions where it is desperately needed," said Geller, of the firm Robbins Geller.

Under the agreement, the three drug distributors will pay up to $21 billion over the next 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.

Of the $26 billion, about $2 billion will go towards lawyers' fees and other costs, officials said.

The three drug distributors did not respond to requests for comment. They have previously rejected the claims raised in the lawsuits.

Michael Ullmann, the general counsel for Johnson & Johnson, said: "We recognize the opioid crisis is a tremendously complex public health issue, and we have deep sympathy for everyone affected. This settlement will directly support state and local efforts to make meaningful progress in addressing the opioid crisis in the United States."

In an initial step toward a broader agreement, the three distributors settled with New York for about $1.1 billion, New York state Attorney General Letitia James announced Tuesday. The settlement does not include an admission of liability.

The companies said in a joint statement that they view the agreement as "an important step toward finalizing a broad settlement with states, counties, and political subdivisions."

"The distributors remain deeply concerned about the impact the opioid epidemic is having on communities across the nation and remain committed to being part of the solution," the statement said.

Some of the money for New York state will be prioritized for Nassau and Suffolk counties, which filed one of the first opioid lawsuits in the country. The money — which is expected to begin to flow to New York cities and counties in two months — will go toward prevention, treatment and recovery for opioid addiction.

"While no amount of money will ever compensate for the millions of addictions, the hundreds of thousands of deaths, or the countless communities decimated by opioids, this money will be vital in preventing any future devastation," James said in a statement.

The deal with New York also includes a requirement that the companies pool data about opioid distribution into a national repository overseen by an independent third party. The clearinghouse, which is intended to monitor potential opioid hot spots that could emerge, would dictate "pharmacy-specific opioid shipment limits that each distributor must follow," according to James' office, and suspicious orders would be flagged for further scrutiny by state regulators.

The opioid crisis worsened during the coronavirus pandemic, according to government figures. Overdose deaths surged to a record 93,000 last year, up from 72,000 the previous year.

"Millions of people across the nation are sick or dead from opioid addiction," nine state attorneys general said in a joint statement Tuesday. "State attorneys general have been hard at work negotiating on their behalf for years to force these companies to pay to combat the opioid epidemic they helped to create and fuel.

"Our negotiations are progressing well and potentially nearing their completion," the statement added. "We look forward to bringing much-needed dollars home to our states to help people recover from opioid addiction and to fundamentally change the opioid manufacturing and distributing industries so this never happens again."