Products Liability Law Daily New York AG announces $26B global opioid settlement with Johnson & Johnson
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Thursday, July 22, 2021

New York AG announces $26B global opioid settlement with Johnson & Johnson

By Pamela C. Maloney, J.D.

Global settlement agreement including monetary and injunctive relief to stop opioid production reached with manufacturer/distributors.

New York Attorney General Letitia James has announced an historic proposed $26 billion global settlement agreement that would resolve claims by states, cities, counties, and other subdivisions in the United States against Johnson & Johnson. and its U S.-based Janssen Pharmaceutical Companies, as well as against three of the nation’s largest drug distributors-McKesson Corporation, Cardinal Health Inc., and Amerisource Bergen Drug Corporation-for their roles in creating and fueling the opioid epidemic. In addition, the proposed agreement would require significant industry changes designed to end the opioid epidemic and prevent this type of crisis from occurring again (New York Attorney General Press Release, July 21, 2021).

Terms of agreement. Under the terms of the agreement, Johnson & Johnson will pay up to $5 billion over nine years, with up to $3.7 billion paid during the first three years, and the three distributors collectively will pay up to $21 billion over the next 18 years. A substantial majority of the money has been designated for expenditures relating to opioid treatment and prevention. The total funding distributed will be determined by the overall degree of participation by both litigating and non-litigating state and local governments. Each state’s share of the funding has been determined by an agreement among the states using a formula that takes into account the impact of the crisis on the state, specifically, the number of overdose deaths, the number of residents with substance use disorder, the number of opioids prescribed, and the population of the state.

Under a $230 million settlement agreement announced previously, New York communities ravaged by opioids are already targeted to receive up to $1.25 billion to fund prevention, treatment, and recovery programs [see Products Liability Law Daily’s June 28, 2021 analysis].

Injunctive relief. In addition, Attorney General James negotiated substantial injunctive relief designed to secure an end to J&J’s manufacturing of opioids and the distribution of those drugs across New York and the rest of the nation. The 10-year proposed agreement will result in court orders requiring J&J to stop manufacturing and distributing these drugs, to cease funding or providing grants to third parties for promoting opioids, and to prevent J&J from lobbying on activities related to opioids. Finally, these court orders will require the company to share clinical trial data under the Yale University Open Data Access Project.

The proposed agreement also provides for court orders requiring the drug distributors-McKesson, Cardinal, and Amerisource Bergen-to: (1) establish a centralized independent clearinghouse to provide all three distributors and state regulators with aggregated data and analytics about where drugs are going and how often, eliminating blind spots in the current systems used by distributors; (2) use data-driven systems to detect suspicious opioid orders from customer pharmacies; (3) terminate the ability of customer pharmacies to receive shipments and to report those companies to state regulators when they show certain signs of diversion; (4) prohibit shipping of-and report-suspicious opioid orders; (5) prohibit sales staff from influencing decisions related to identifying suspicious opioid orders; (6) require senior corporate officials to engage in regular oversight of anti-diversion efforts.

The proposed global agreement-if approved by a substantial number of states and local governments across the country-would resolve the claims of nearly 4,000 entities that have filed lawsuits in federal and state courts against the four companies. New York has already signed on to this latest agreement, while other states, which include California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, North Carolina, Ohio, Pennsylvania, Tennessee, and Texas, have 30 days to sign onto the deal. Local governments in the participating states will have up to 150 days to join. States and their local governments will receive maximum payments if each state and its local governments join together in support of the agreement.

The settlement agreement does not constitute an admission of any liability or wrongdoing by J&J who announced that it would continue to defend against any litigation that the final agreement does not resolve. J&J further stated that although its actions relating to the marketing and promotion of prescription opioid medications were appropriate and responsible, it will no longer sell prescription opioid medications-which accounted for less than one percent of total opioid prescriptions-in the United States.

Companies: Johnson & Johnson; McKesson Corp.; Cardinal Health Inc.; Amerisource Bergen Drug Corp.

MainStory: TopStory SettlementAgreementsNews DrugsNews

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