Johnson & Johnson, drug distributors finalize $26B opioid settlement as states join the landmark deal

A large portion of the mountain of U.S. opioid lawsuits is coming to an end for four healthcare giants.

Johnson & Johnson and three major drug distributors—AmerisourceBergen, Cardinal Health and McKesson—have decided to finalize a landmark $26 billion settlement to resolve claims that they helped fuel the opioid crisis.

The four firms proposed the $26 billion deal in July, hoping to put to rest more than 3,000 lawsuits by states, counties and other local governments. Now, the companies have determined that enough local and state governments have signed on for the deal to go through.

Under the proposed deal, J&J will contribute $5 billion over nine years, and the distributors will pay up to $21 billion over 18 years. The companies have separately reached agreements with some states. J&J, for its part, has already settled with the states of New York, Texas, Nevada and New Mexico, as well as the federally recognized Tribes. Their shares will be deducted from the basket settlement amount.

A large portion of the mountain of U.S. opioid lawsuits is coming to an end for four healthcare giants.

Johnson & Johnson and three major drug distributors—AmerisourceBergen, Cardinal Health and McKesson—have decided to finalize a landmark $26 billion settlement to resolve claims that they helped fuel the opioid crisis.

The four firms proposed the $26 billion deal in July, hoping to put to rest more than 3,000 lawsuits by states, counties and other local governments. Now, the companies have determined that enough local and state governments have signed on for the deal to go through.

Under the proposed deal, J&J will contribute $5 billion over nine years, and the distributors will pay up to $21 billion over 18 years. The companies have separately reached agreements with some states. J&J, for its part, has already settled with the states of New York, Texas, Nevada and New Mexico, as well as the federally recognized Tribes. Their shares will be deducted from the basket settlement amount.

 

Altogether, more than 90% of litigating local governments are participating, including 46 states and the District of Columbia, according to the companies. Alabama, Oklahoma, New Hampshire and Washington state are the remaining holdouts.

None of the companies admits to any wrongdoing, but as the distributors said, “the implementation of this settlement is a key milestone toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities.”

The settlement agreement is scheduled to take effect on April 2. Before that, the parties are seeking court-ordered consent for the terms.

At least 85% of the money will be used on programs that address the opioid crisis through treatment, education and prevention efforts, according to the National Prescription Opiate Litigation Plaintiffs' Executive Committee.

RELATED: Done deal: Johnson & Johnson and 3 distributors agree to historic $26 billion opioid settlement

While J&J is ending most of its share of the nationwide opioid litigation, other drugmakers remain on the hook. The billionaire Sackler family, owners of the notorious Purdue Pharma, just raised their offer to pay as much as $6 billion to resolve nationwide claims against the OxyContin maker through a U.S. bankruptcy court. A judge had previously blocked a $4.3 billion settlement which would have shielded the Sacklers from the opioid lawsuits.

Meanwhile, Mallinckrodt’s plan of reorganization has won backing from the U.S. Bankruptcy Court for the District of Delaware earlier this month.

Teva and Endo also face additional lawsuits for their roles in the opioid pandemic even though they’ve settled some.

Altogether, more than 90% of litigating local governments are participating, including 46 states and the District of Columbia, according to the companies. Alabama, Oklahoma, New Hampshire and Washington state are the remaining holdouts.

None of the companies admits to any wrongdoing, but as the distributors said, “the implementation of this settlement is a key milestone toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities.”

The settlement agreement is scheduled to take effect on April 2. Before that, the parties are seeking court-ordered consent for the terms.

At least 85% of the money will be used on programs that address the opioid crisis through treatment, education and prevention efforts, according to the National Prescription Opiate Litigation Plaintiffs' Executive Committee.

RELATED: Done deal: Johnson & Johnson and 3 distributors agree to historic $26 billion opioid settlement

While J&J is ending most of its share of the nationwide opioid litigation, other drugmakers remain on the hook. The billionaire Sackler family, owners of the notorious Purdue Pharma, just raised their offer to pay as much as $6 billion to resolve nationwide claims against the OxyContin maker through a U.S. bankruptcy court. A judge had previously blocked a $4.3 billion settlement which would have shielded the Sacklers from the opioid lawsuits.

Meanwhile, Mallinckrodt’s plan of reorganization has won backing from the U.S. Bankruptcy Court for the District of Delaware earlier this month.

Teva and Endo also face additional lawsuits for their roles in the opioid pandemic even though they’ve settled some.