Four Major Drug Companies Offer $26B Opioid Settlement Deal

Four Major Drug Companies Offer $26B Opioid Settlement Deal

Introduction

A $26 billion opioid deal has been put forward by three major drug distributors and a large drug manufacturer to resolve thousands of lawsuits brought by the state and local governments over their role in the damages caused by the disastrous opioid crisis in the U.S.

As per the tentative deal, $4 billion more will be added to the initial offer that was proposed a year ago and was rejected by several states and municipalities, considering it less as compared to the harms caused by the opioid epidemic. The latest deal will include $2 billion reserved for private lawyers who represent cities, counties, and some states.

The prominent defendants involved in the deal are opioid manufacturer Johnson & Johnson (J&J) and the distributors, McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation. The offer must be approved by the judges involved in the litigation, including U.S. District Judge Dan Aaron Polster, overseeing the opioid multidistrict litigation, and, if approved, these drug companies will get closure from future opioid lawsuits by these government entities.

Paul Farrell Jr., one of the three lead attorneys for the plaintiffs, noted that the agreement creates an incentive for states to get local jurisdictions to agree to the terms because the payouts to the states will take place over 18 years and diminish if communities do not sign on.

The outlines of the settlement were announced by the three distributors in quarterly earnings reports released Tuesday and Thursday, whereas J&J had proposed its $5 billion contributions in a press release issued last month. The $21 billion will be paid collectively by the distributors over 18 years, out of which $8 billion will be paid by McKesson alone, as per the filings.

The amount from the settlement deal will be used for treatment and prevention programs in communities shattered by addiction and overdose and to reimburse local and state governments for expenses related to the epidemic.