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Swath of opioid lawsuits on cusp of $26 billion settlement

Three major drug companies agreed to pay $26 billion Wednesday to resolve thousands of nationwide lawsuits over their role in the opioid epidemic.

The settlement comes two decades into an opioid crisis that has ravaged much of the country, killing half a million Americans and leaving millions addicted. Last year amidst the Covid-19 pandemic, the U.S. saw its deadliest year for overdose deaths, a shocking 93,000.

States, local governments and Native American tribes have filed thousands of lawsuits against makers of opioids, including Oxycontin giant Purdue Pharma and Johnson and Johnson, as well as leading distributors, Cardinal Health, McKesson and AmerisourceBergen Drug, and retail pharmacy companies like CVS — seeking to hold them accountable for allegedly ignoring signs that their painkillers were senselessly pouring into communities.

The settlement reached on Wednesday would have Cardinal, McKesson and Amerisource paying out $21 million over the next 18 years. Johnson and Johnson will foot the bill for up to $5 million over nine years.

The full payout is premises on 48 states signing onto the agreement. At least 44 states and 95% of cities must sign on to the deal to get some of the money. Fourteen states are already on board, including Pennsylvania, North Carolina, New York, Ohio and Texas.

States have 30 days to sign onto the agreement and local governments have up to 150 days.

If all goes as planned, North Carolina is set to get a big chunk of the settlement, $750 million, to go toward abatement in the state.

“The opioid epidemic has torn families apart and killed thousands of North Carolinians,” said North Carolina Attorney General Josh Stein in a press release. “Families across our state have shared with me their heart-wrenching stories about their loved ones who are struggling with the horrible disease of addiction or who overdosed and died. It has been my genuine honor on their behalf to lead these negotiations to hold accountable the companies that helped to create and fuel this crisis.”

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New York reached a settlement on Tuesday with Amerisource, Cardinal and McKesson for $1.1 billion, resolving a suit filed in 2019 by Attorney General Letitia James. The state also settled with Johnson and Johnson last month for $230 million.

“The numerous companies that manufactured and distributed opioids across the nation did so without regard to life or even the national crisis they were helping to fuel,” said James in a press release. “Johnson & Johnson, McKesson, Cardinal Health, and Amerisource Bergen not only helped light the match, but continued to fuel the fire of opioid addiction for more than two decades.”

Johnson and Johnson, which once provided much of the raw material to make opioids and even dabbled in some of its own painkillers, has agreed to no longer be a part of the opioid business in the U.S.

As for the other companies, the settlement terms would require them to hire an independent clearinghouse to monitor where the drugs are going and how often. Further, the companies will have to stop shipments to pharmacies if they are showing signs of drug rerouting and report them to state regulators. 

Under the agreement, McKesson would pay $7.9 million and Amerisource and Cardinal would both pay $6.4 million. All three companies deny any wrongdoing and say they are committed to bettering communities. 

“While the companies strongly dispute the allegations made in these lawsuits, they believe the proposed settlement agreement and settlement process it establishes, which is outlined below, are important steps toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities across the United States,” the companies said in a joint press release. “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.”

Massachusetts, California, Delaware, Colorado, Connecticut, Georgia, Florida, Louisiana and Tennessee also announced Wednesday their participation in the settlement.

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The full payout is premises on 48 states signing onto the agreement. At least 44 states and 95% of cities must sign on to the deal to get some of the money.