July 20, 2021
The three largest pharmaceutical distributors will pay more than $1 billion in a settlement to New York, an agreement announced on Tuesday that could become part of a larger tentative $26 billion deal with states and municipalities to resolve thousands of nationwide lawsuits.
The New York agreement with Cardinal Health, McKesson Corp and AmerisourceBergen is yet another deal in a series of settlements in a far-reaching trial that is underway in Central Islip. Johnson & Johnson, one of the largest drugmakers in the case, agreed to a $230 million settlement with the state just days before arguments were set to begin in June.
Johnson & Johnson and the three distributors are additionally on the verge of a $26 billion deal with states and municipalities, the result of negotiations that began over two years ago. That agreement could be announced later this week, according to several people with knowledge of the negotiations who also cautioned that any deal could still be significantly modified or even fall apart entirely before then.
Letitia James, the New York State attorney general, said in a statement on Tuesday that Cardinal Health, McKesson Corp and AmerisourceBergen distributed opioids “without regard to the national crisis they were helping to fuel.”
“While no amount of money will ever compensate for the millions of addictions, the hundreds of thousands of deaths or the countless communities decimated by opioids,” she continued, “this money will be vital in preventing any future devastation.”
The companies have also agreed to be monitored by a third party system which will oversee the amount of opioids being shipped to pharmacies across the country, in an effort to prevent oversupply.
In a statement issued jointly on Tuesday by the three distribution companies, the distributors said they “strongly dispute the allegations at issue in the trial,” but “believe this resolution will allow the companies to focus their attention and resources on the safe and secure delivery of medications and therapies while delivering meaningful relief to affected communities.”
The opioid industry is facing over 3,000 lawsuits across the nation for its contribution to an epidemic of prescription and street opioid abuse that has killed hundreds of thousands of Americans over two decades. In New York, 3,000 people were killed by opioids in both their street and prescribed forms in 2018, according to data from the New York State Department of Health.
The New York lawsuit, filed and argued jointly by the state and Nassau and Suffolk Counties on Long Island, was the first of its kind to go before a jury and the first to target the opioid supply chain in its entirety, from the drugmakers who created the pills to the distributors that supplied the medicines to a pharmacy chain where the prescriptions for them were filled.
The trial was so extensive that there was not a courtroom large enough for all of the defendants and their teams of lawyers; Justice Jerry Garguilo is hearing the case in an auditorium at a local law school.
Purdue Pharma, the maker of OxyContin, owned by members of the billionaire Sackler family and the company most publicly linked to the opioid epidemic, was initially named in the case, as were some individual Sacklers. But nearly two years ago, Purdue filed for bankruptcy in the face of thousands of opioid-related lawsuits. The bankruptcy process has paused cases against the Sacklers and the drugmaker.
Because of the settlements, only three drug manufacturers, Endo Health Solutions, Teva Pharmaceuticals USA and Allergan Finance, remain at trial. (The pharmacies named in the case, Walmart Inc, Rite Aid Corp. and CVS, were all also excised from the case after settlements.)
Tuesday’s settlement and the terms of the state’s own agreement will be folded into the $26 billion global agreement if negotiations are completed before July 1, 2022, the state attorney general’s office said in a news release.
Payments will start in approximately two months and will be paid out over the next 17 years. The money will not go to individual people harmed by the effects of the opioid crisis; rather it will be used toward abatement measures, such as addiction counseling and education programs.