Johnson & Johnson and 3 distributors ready to settle opioid lawsuits for $26B: report

U.S. opioid epidemic
Four major lawsuit defendants, including Johnson & Johnson, that are accused of downplaying the risks of using opioids while aggressively marking them are on the brink of agreeing to a $26 billion settlement. (Stuart Ritchie)

Facing thousands of opioid lawsuits, Johnson & Johnson and major distributors are close to a $26 billion settlement to end the litigation, The Wall Street Journal reports.

Lawyers for Johnson & Johnson, Cardinal Health, McKesson and AmerisourceBergen have been negotiating a potential settlement for years, and their deal could become public this week, the newspaper reports.

Under the deal, J&J would pay $5 billion over nine years and the three distributors would pay a combined $21 billion over 18 years, the report says. In a recent SEC filing, J&J had already earmarked $5 billion for an "all-in settlement" that would resolve "opioid lawsuits and future claims by states, cities, counties and tribal governments." 

"There continues to be progress toward finalizing this agreement," J&J said in a statement Tuesday. "The settlement is not an admission of liability or wrongdoing and the company will continue to defend against any litigation that the final agreement does not resolve."

The settlement coincides with a high-profile trial underway in New York. On Tuesday, Cardinal, AmerisourceBergen and McKesson agreed to a $1.1 billion settlement to be removed from the trial. Late last month, Johnson & Johnson agreed to pay $230 million to escape the New York lawsuit.

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Over the last two decades, the opioid and addiction crisis killed roughly 500,000 Americans who overdosed on prescription and illegal opioids, the CDC says. The epidemic has sparked lawsuits from local and state governments, who claim the companies downplayed the risks of using opioids while aggressively marking them.

The final value of the large settlement will depend on how many states and municipalities enlist over the next several months, WSJ reports. And the companies could opt out if they decide enough plaintiffs aren't involved.

Cardinal Health declined comment on Tuesday. The other two companies did not immediately respond to a request for comment. 

As was the case with J&J’s settlement with New York, money from the settlement would go toward treating and preventing opioid addiction, WSJ reports. It'd also fund the cost of the litigation. Additionally, the distributors have agreed to establish a clearinghouse to target suspicious drug orders.

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Meanwhile, other drugmakers and distributors that face opioid lawsuits on a smaller scale would not be involved in the settlement, the WSJ said.

Other companies involved in the New York lawsuit, for example, include AbbVie, Teva and Endo. The trail against them will continue. The trials of three other New York defendants--Mallinckrodt, Purdue Pharma and Rochester Drug Cooperative--are progressing through bankruptcy court.

Over the last few years, companies have faced opioid trials in a variety of municipalities. In 2019, an Oklahoma judge ordered J&J to pay $572 million for contributing to the death of more than 6,000 people in the state since 2000. A court later reduced the figure to $465 million.