Johnson & Johnson, 3 Drug Distributors to Settle Opioid Lawsuits For $26 Billion

Johnson & Johnson and three drug distributors are to settle thousands of opioid lawsuits nationwide for $26 billion, the Associated Press reported.

Two people familiar with the major settlement, choosing to remain anonymous since they were not authorized to comment, confirmed the plans to the AP. The settlement also involves drug distributors AmerisourceBergen, Cardinal Health and McKesson and is expected to be the biggest single settlement yet over the U.S. opioid epidemic. In a statement, Johnson & Johnson said it is ready to put up to $5 billion toward the giant settlement.

"There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need," Johnson & Johnson said. "The settlement is not an admission of liability or wrongdoing, and the Company will continue to defend against any litigation that the final agreement does not resolve."

Since 2000, more than 500,000 deaths in the U.S. have been connected to opioid prescription drugs and illegal opioids such as heroin and fentanyl. An AP analysis revealed the shipment of prescription opioids in 2012 could have provided every U.S. citizen with a 20-day supply.

For more reporting from the Associated Press, see below:

Johnson & Johnson Sign
Johnson & Johnson and three major drug distributors are to settle opioid lawsuits in the U.S. for $26 billion, according to the Associated Press. In this photo, a sign for Johnson & Johnson is seen outside the Johnson & Johnson headquarters on Nov. 19, 2020 in Madrid, Spain. David Benito/Getty Images

As a precursor to the bigger deal, New York reached an agreement Tuesday with the distribution companies AmerisourceBergen, Cardinal Health and McKesson to settle an ongoing trial in the state. That deal alone would generate more than $1 billion to abate the damage done by opioids there. The trial is expected to continue, but the settlement leaves only three drug manufacturers as defendants.

"Today, we're holding them accountable delivering more than $1 billion more into New York communities ravaged by opioids for treatment, recovery, and prevention efforts," New York Attorney General Letitia James said in a statement Tuesday.

The people who gave the AP details of the national settlement did so on the condition of anonymity because they were not authorized to speak as details are finalized.

The national settlement won't end the cases, but it will change them. With Johnson & Johnson settling in addition to deals being pursued by OxyContin maker Purdue Pharma and generic drugmaker Mallinckrodt, three key manufacturers will no longer be part of the cases, nor will the national drug distributors.

Other manufacturers, regional distribution companies and pharmacies will remain in the cases for now.

Cardinal Health declined to comment early Tuesday, and the other distribution companies did not respond to requests for comment. Johnson & Johnson settled with New York last month just before the trial there started.

The distribution companies face thousands of similar legal claims from state and local governments across the country and have long been trying to settle them all. The New York deal would become a part of a national agreement if one can be struck this year.

The state and local governments say distribution companies did not have proper controls to flag or halt shipments to pharmacies that received outsized shares of powerful and addictive prescription painkillers. The companies have maintained they were filling orders of legal drugs placed by doctors—so they shouldn't shoulder blame for the nation's addiction and overdose crisis.

Under the New York settlement, the three companies would provide more than $1 billion to be used to abate the epidemic in the state. The money would be delivered in 18 annual payments, with the first one arriving this year.

The companies would also establish a national clearinghouse of data on opioid distribution, and the data would be monitored by an independent body. Johnson & Johnson would also agree not to produce any opioids for the next 10 years.

Including the New York case, there are currently three trials across the U.S. of government entities' claims that companies should be held liable for the opioid crisis. One in California focuses solely on drugmakers, and one scheduled to wrap up this month in West Virginia aims only at distributors. That could be ended if a deal is reached.

Other cases are queued up to start. The only one of its kind to reach a verdict so far was two years ago in Oklahoma. There, a judge ordered Johnson & Johnson, the only company not to settle before that trial, to pay $465 million. The company is appealing the judgment.

The New York case is the broadest one to go to trial so far—and the first with a jury deciding the case rather than only a judge.

Johnson & Johnson settled for $230 million just before the case started. The remaining defendants are Teva Pharmaceutical Industries, Endo International and AbbVie Inc.

With so many cases approaching trial, there's been a flurry of proposed or realized settlements over opioids. OxyContin maker Purdue Pharma declared bankruptcy as part of its effort to settle cases. It is proposing a reorganization that would use all future profits to fight the epidemic as part of a deal the company values at about $10 billion over time. That plan will face some opposition at a confirmation hearing in U.S. Bankruptcy Court next month.