US pharmaceutical giant Johnson & Johnson and America’s three biggest drug distributors have agreed to pay a combined $26 billion to end the legal liability for their roles in spurring the nation’s opioid crisis.
Attorneys general from seven states announced the deal on Wednesday, saying that Johnson & Johnson would pay $5 billion and distributors McKesson, Cardinal Health, and AmerisourceBergen about $21 billion combined.
The money will be paid out over time – nine years for Johnson & Johnson and 18 years in the case of the distributors – and will go to states that agree to accept the settlement and forgo pursuing their own lawsuits against the companies.
Massachusetts Attorney General Maura Healey, whose state will receive more than $500 million, said the agreement fulfilled her promise of making companies that got rich off the opioid epidemic pay a price. The money will help fund programs to prevent and treat opioid addictions.
Johnson & Johnson is accused of pushing painkillers for excessive use and downplaying their addiction risks, while the distributors allegedly failed to do enough to stop the drugs flowing into illegal channels. Johnson & Johnson agreed last month to a $230-million settlement with New York state.
“These companies helped fuel the opioid crisis, which rages in our communities,” Healey said. US overdose deaths rose to a record high last year, she added.
Today's agreement bans Johnson & Johnson from the opioid business, and requires that it publicly share its opioid clinical trial data.
The distributors must implement new systems to track opioid distribution, prohibit the shipping of suspicious opioid orders, and more.
— Maura Healey (@MassAGO) July 21, 2021
Under the latest agreement, Johnson & Johnson will be banned from making opioids, and the distributors will add new systems to track such products and prevent them ending up in the wrong hands.
States could start receiving the money by early next year, but the settlement is contingent on getting the vast majority of state and local governments to sign on. At least 48 states must join to get the full payout, and 97 to 98% of local governments must agree to drop or forgo their claims, NBC News reported.
Hard-hit states such as West Virginia and Washington may stick with their own lawsuits. A trial in Washington’s lawsuit against McKesson, Cardinal Health, and AmerisourceBergen is scheduled to begin in September. Its case against Johnson & Johnson is slated to go to trial next January.
“The settlement is, to be blunt, not nearly good enough for Washington,” Bob Ferguson, the state’s attorney general, said in a statement. He added that even if the more than 300 Washington cities and counties join in the deal, a total of $527.5 million would be paid to the state over 18 years. Washington is seeking a “transformative” amount of money in order for state and local governments to address the epidemic, he said.
The US Food and Drug Administration has warned that Johnson & Johnson’s single-dose Covid-19 vaccine can cause Guillain-Barre syndrome, a rare disorder where the immune system attacks the nervous system and can result in paralysis.
The US CDC and FDA lifted their recommended pause on use of Johnson & Johnson’s coronavirus vaccine with a condition that it will now include a safety label warning that its vaccine comes with blood clot risks.