J&J, Distributors Finalize $26B Settlement Over Opioid Addiction Crisis

Drugmaker Johnson & Johnson along with three major distributors have agreed to finalize the nationwide $26 billion settlements in the opioid addiction crisis.

Johnson & Johnson, AmerisourceBergen, Cardinal Health and McKesson had until Friday to determine whether enough cities and counties had chosen to join the settlement plan before moving forward with it. According to Johnson & Johnson, there was a "sufficient level," the Associated Press reported.

The deal is aimed to resolve more than 3,000 lawsuits, mainly by state and local governments, to hold the companies responsible for the opioid epidemic, which has killed thousands. In just 2019, nearly 50,000 people overdosed from opioids, and the numbers continue to rise, according to the U.S. Centers for Disease Control and Prevention.

The formal decision to move ahead with the settlement plan initiated a 60-day countdown until the deal is considered in effect and will start the distribution of the funds. States and local governments will determine how to use the money to help alleviate the opioid epidemic in their communities, such as funding treatment and prevention programs. However, none of the funds from the settlements will go directly to the victims or survivors of the crisis, the AP reported.

"Because of the money, there will be people alive next year who otherwise would have died," North Carolina Attorney General Josh Stein, a lead settlement negotiator, told Reuters.

At least 46 out of the 49 states, as well as the District of Columbia and eligible territories, have agreed to join the settlement plan. The companies still face claims in Alabama, Oklahoma, Washington and West Virginia, as they declined to join the settlement plan. New Hampshire declined to settle with Johnson & Johnson, Reuters said.

The three distributors will pay approximately $19.5 billion over 18 years. AmerisourceBergen will pay $6.1 billion, Cardinal Health will pay $6 billion, and McKesson will pay $7.4 billion, the distributors said in a joint statement.

Meanwhile, Johnson & Johnson has nine years to pay its $5 billion portion, and at least $2 billion will be set aside for legal fees. Four companies also agreed to pay the federally nationalized Native American tribes $665 million as part of the settlement, according to The Washington Post. The distribution companies will pay $515 million over seven years, and Johnson & Johnson will pay $150 million within two years.

In addition to its payout, Johnson & Johnson agreed to stop selling prescription opioids. The three distributors agreed to send their data to a clearinghouse designed to help locate when prescription drugs are being diverted to the black market, the AP reported.

The companies said that the settlement agreement is not an admission of wrongdoing or liability in the opioid crisis, according to the AP. They also said they will keep defending themselves against claims that they helped cause the crisis, which were made by entities that are not part of the settlements, the AP said.

Update 02/25/22, 10:40 a.m. ET: This story has been updated with more background and information.

Johnson & Johnson Opioid Settlement
Johnson & Johnson along with three major distributors have finalized a nationwide settlement plan and must pay $26 billion for their role in the opioid addiction crisis. Mark Ralston/ AFP/Getty Images