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Drug distributors, Johnson & Johnson reach $26 billion deal to resolve opioid lawsuits

WASHINGTON - The nation's three biggest opioid distributors and drugmaker Johnson & Johnson reached a $26 billion settlement to resolve thousands of lawsuits over the opioid epidemic, a crisis that has killed more than 500,000 Americans over the past two decades.

A bipartisan group of attorneys general announced Wednesday the agreement with three major drug distributors - McKesson, Cardinal Health and AmerisourceBergen - and pharmaceutical giant Johnson & Johnson, potentially releasing the companies from current and future litigation if a critical mass of communities across the country agree to drop their cases.

Attorneys general who unveiled the deal said that while they could not adequately compensate the families of those who have died, but the money states will receive over the next 18 years may help reduce the future threat.

New York Attorney General Letitia James, a Democrat, whose state will recoup about $1.25 billion as part of the nationwide settlement, said a "trail of destruction and tragedy has basically ravaged every corner of New York and every region of this nation." Pennsylvania Attorney General Josh Shapiro, a Democrat, said the agreement sends a message that states "simply will not tolerate this kind of behavior."

The companies have denied wrongdoing. In a joint statement, the distributors said that while they dispute the claims made in lawsuits, the settlement marks a step "toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities across the United States."

"The companies remain deeply concerned about the impact the opioid epidemic is having on individuals, families, and communities across the nation and are committed to being part of the solution," the statement said.

Johnson & Johnson, which said it would contribute up to $5 billion to resolve the litigation, said its marketing and promotion of opioids "were appropriate and responsible."

"We recognize the opioid crisis is a tremendously complex public health issue, and we have deep sympathy for everyone affected," Michael Ullmann, the company's executive vice president, general counsel, wrote in a statement. "This settlement will directly support state and local efforts to make meaningful progress in addressing the opioid crisis in the United States."

Under the settlement, Johnson & Johnson would be barred from manufacturing, marketing and selling opioids. The company voluntarily halted sales of pain pills last year.

The deal would also require the distributors to establish and fund a "clearinghouse" that shows where every opioid dose is headed, an accountability mechanism that would alert regulators of suspicious orders.

The settlement, which still needs broad support from states and communities, would settle more than 3,000 lawsuits brought by states, cities, counties and other jurisdictions that were consolidated into one of the largest and most complex civil litigation battles in U.S. legal history. A settlement has not yet been reached between the companies and Native American tribes.

But other lawsuits will continue, as will the drug epidemic at the center of the conflict. Last week the government announced that an estimated 69,710 people had died of overdoses involving opioids in 2020 - a record 191 every day. Now the main culprit is illicit fentanyl manufactured in labs abroad. Opioid prescriptions have plummeted from a peak of 255.2 million 2012 to 153.2 million in 2019, according to the Centers for Disease Control and Prevention.

The settlement money will be spent on treatment, prevention, education and other costs of the epidemic. Private attorneys will recoup nearly $2 billion.

The offer will now go to every state, city and county in the country to decide if they will participate. If a critical mass is reached, billions of dollars from the companies could begin to be released as soon as the end of September. Lawyers representing communities said they project about $4 billion would be allocated by July 2022.

The agreement comes after years of negotiations. Settlement talks stalled last year, breaking through after the sides settled on a system that increases the amount of guaranteed money given to municipalities as more agree to the deal, said Peter Mougey, one of the lawyers representing the communities in negotiations.

"This agreement was pretty much dead on arrival until the negotiating committee came up with this tiered structure to get us over the hurdle of aligning the certainty of payments," he said.

The financial and social harms of the epidemic far outweigh the proposed total settlement, said Gary Mendell, whose son Brian died in 2011 after battling addiction. But the agreement is a step toward remediating the crisis, he said.

"Getting this deal struck now and getting this money distributed fairly quickly, this is going to start to save people's lives right away," Mendell said.

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