America’s three largest drug distribution companies and drugmaker Johnson & Johnson are on the verge of a $ 26 billion settlement covering thousands of lawsuits over the opioid toll in the United States, told the Associated Press two people with knowledge of the plans.
As a precursor to the larger deal, New York on Tuesday reached an agreement with distribution companies AmerisourceBergen, Cardinal Health and McKesson to settle an ongoing lawsuit in the state. This deal alone would generate over $ 1 billion to reduce the damage caused by opioids there. The lawsuit is expected to continue, but the settlement leaves only three drugmakers as defendants.
“Today we hold them accountable for providing more than $ 1 billion more to opioid-ravaged New York communities for treatment, recovery and prevention efforts,” said the New York attorney general. York, Letitia James, in a statement Tuesday.
The people who gave the PA details of the national settlement did so on condition of anonymity as they were not allowed to speak while the details were finalized.
Cardinal Health declined to comment on Tuesday morning and other distribution companies did not respond to requests for comment. But Johnson and Johnson reiterated in a statement that they were prepared to contribute up to $ 5 billion to the national settlement. The company moved to New York last month just before the trial began. “There continues to be progress towards finalizing this agreement and we remain committed to providing certainty to parties involved and essential assistance to families and communities in need,” the company said. “The settlement is not an admission of liability or wrongdoing, and the Company will continue to defend itself against any disputes that the final agreement does not resolve.”
Distribution companies face thousands of similar legal claims from state and local governments across the country and have long tried to resolve them all. The New York accord would become part of a national accord if it could be reached this year.
State and local governments say distribution companies did not have proper controls to report or stop shipments to pharmacies that received disproportionate shares of potent and addicting prescription pain relievers. The companies have maintained that they are filling legal drug orders placed by doctors – so they should not be blamed for the drug abuse and overdose crisis in the country.
An Associated Press analysis of federal distribution data found that enough prescription opioids were shipped in 2012 for every person in the United States to have a 20-day supply.
And opioids – including prescription drugs and illegal drugs like illegally produced heroin and fentanyl – have been linked to more than 500,000 deaths in the United States since 2000.
Under the New York settlement, the three companies would provide more than $ 1 billion to be used to reduce the outbreak in the state. The money would be paid in 18 annual installments, with the first coming this year.
The companies would also establish a national clearinghouse for opioid distribution data, and the data would be monitored by an independent body. Johnson & Johnson would also agree not to produce opioids for the next 10 years.
Including the New York case, there are currently three lawsuits in the United States over allegations by government entities that companies should be held accountable for the opioid crisis. One in California focuses only on drugmakers, and another expected to end this month in West Virginia is only for distributors. It could be over if an agreement is reached.
Other cases are queued to start. The only one of its kind to have rendered a verdict so far was two years ago in Oklahoma. There, a judge ordered Johnson & Johnson, the only company left unresolved before this lawsuit, to pay $ 465 million. The company is appealing the judgment.
The New York case is the largest to be tried so far – and the first with a jury deciding the case rather than just a judge.
Johnson & Johnson settled $ 230 million just before the deal began. The other defendants are Teva Pharmaceutical Industries, Endo International and AbbVie, Inc.
With so many cases approaching trial, there has been a wave of proposed or made regulations on opioids. OxyContin maker Purdue Pharma has declared bankruptcy as part of its efforts to resolve the cases. He is proposing a reorganization that would use any future profits to fight the outbreak under a deal the company values at around $ 10 billion over time. That plan will face some opposition in a confirmation hearing in the U.S. bankruptcy court next month.