US states unveil settlement for $26 billion over opioid lawsuits

After more than two years of negotiations, a group of US state attorneys general unveiled on Wednesday a $26 billion settlement with Johnson & Johnson and the three largest US drug distributors to resolve thousands of opioid lawsuits and give communities across the country money to address the epidemic in painkiller addiction that hasn't ended.

The proposed settlement is with the three largest US drug distributors — McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp. They are expected to pay a combined $21 billion, while J&J would pay $5 billion.

The landmark settlement includes the attorneys general from Tennessee, North Carolina, Pennsylvania, New York, Louisiana, Delaware and Connecticut.

If enough states and municipalities sign on to the deal, communities could start receiving billions of dollars to help pay for addiction treatment and prevention services and other opioid epidemic costs as soon as next year.

Settlement money from the distributors would be paid out over the next 18 years. J&J would pay over nine years, with up to $3.7 billion paid during the first three years.

The settlement would release J&J and the distributors from all legal liability in the opioid epidemic that has killed hundreds of thousands of Americans. States and cities would drop the lawsuits against the four companies and pledge not to bring any future action.

The settlement binds only those four companies, leaving thousands of other lawsuits against many other pharmaceutical defendants, including manufacturers and drugstore chains, in nationwide litigation.

The opioid crisis that has claimed half a million lives in the US has triggered more than 3,000 lawsuits filed by states, local governments, Native American tribes, hospital groups and others against the pharmaceutical industry.

The lawsuits allege drugmakers pushed their painkillers for uses far beyond what was medically necessary and that distributors and pharmacies didn't do enough to halt masses of pills flowing into communities.

The distributors were accused of lax controls that allowed the addictive painkillers to be diverted into illegal channels, devastating communities, while J&J was accused of downplaying the addiction risk in its opioid marketing.

The companies have denied the allegations.

The settlement also calls for the creation of an independent clearinghouse to provide all three distributors and state regulators aggregated data about where drugs are going and how often, a tool negotiators hope will help reduce pills being overshipped to communities.

The ultimate amount the companies may have to pay will depend on the extent states sign up for the settlement and confirm their cities and counties are on board.

The opioid crisis has been blamed for hundreds of thousands of US overdose deaths since 1999, but has hit some regions much harder than others, creating divisions among governments when it comes to evaluating the settlement.

The attorneys general said they anticipate broad support, which is required before the companies fully fund the agreement. States will have 30 days to evaluate the agreement.

But Washington state's attorney general, Bob Ferguson, said he wouldn't join the deal. "The settlement is, to be blunt, not nearly good enough for Washington," he said.

That state's trial against the drug distributors begins on Sept 7, while a January trial is scheduled for J&J.

To get the full payout, a critical mass is needed. The maximum payment requires at least 48 states, 98 percent of litigating local governments and 97 percent of the jurisdictions that have yet to sue, a person familiar with the settlement said, according to Reuters.

Electing to participate only guarantees a state 55 percent of its share of the settlement as a base amount, the person said.

The other 45 percent is contingent on the state through legislation or agreement being able to get its political subdivisions on board and assuring the companies an end to the litigation, the source said.