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 Distributors McKesson Corp, Cardinal Health Inc and
AmerisourceBergen Corp would pay a combined $21 billion, while
Johnson & Johnson would pay $5 billion. New York on Tuesday is
expected to announce the distributors have agreed to a $1
billion-plus settlement with the state, a source said.
The ultimate settlement pricetag could fluctuate depending on the
number of states and political subdivisions that agree to the deal
or reject it and pursue litigation on their own in hopes of a bigger
payout down the line.
More than 40 states are expected to support the nationwide
settlement, two sources said. States will have 30 days to decide
whether to join the global accord then more time to try to convince
their cities and counties to participate in the deal, the sources
said.
McKesson has previously said that of the $21 billion the three
distributors would pay over 18 years, more than 90% would be used to
remediate the opioid crisis while the rest, about $2 billion, would
be used to pay plaintiffs' attorney fees and costs.
Several states have passed laws or reached agreements with their
political subdivisions to govern how settlement proceeds would be
allocated in the event of a nationwide settlement.
The financial terms are in line with prior disclosures by the three
distributors and J&J about what they expected to have to pay
following long-running settlement talks.
"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," J&J said
in a statement.
McKesson and Cardinal Health had no comment while AmerisourceBergen
said it does not comment on "rumor and speculation." They have all
previously denied wrongdoing.
Nearly 500,000 people died from opioid overdoses in the United
States from 1999 to 2019, according to the U.S. Centers for Disease
Control and Prevention (CDC). The opioid crisis appeared to worsen
during the COVID-19 pandemic.
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 The CDC last week said
provisional data showed that 2020 was a record
year for drug overdose deaths with 93,331, up
29% from a year earlier. Opioids were involved
in 74.7%, or 69,710, of those overdose deaths.
The distributors were accused of lax controls
that allowed massive amounts of addictive
painkillers to be diverted into illegal
channels, devastating communities, while J&J was
accused of downplaying the addiction risk.
Governments have said the money will be used to fund addiction
treatment, family support programs, education and other health
initiatives to address the crisis.
Other settlements are also being negotiated, with the opioid makers
Purdue Pharma and Mallinckrodt Plc now working through the
bankruptcy courts to secure support for settlements worth more than
$10 billion and $1.6 billion, respectively. The
distributors have been in the midst of two trials nationally in the
litigation, one in New York and one in West Virginia. They have now
agreed to resolve the New York case, a person briefed on the matter
said.
The deal with New York Attorney General Letitia James and the
populous Long Island counties of Nassau and Suffolk comes three
weeks into the first jury trial accusing companies of profiting from
a flood of addictive painkillers that devastated communities.
Closing arguments are expected in the West Virginia trial next week.
Local West Virginia communities had opted out of the proposed
nationwide deal to pursue one on their own.
The New York trial will continue against three drugmakers accused of
deceptively marketing their painkillers - Endo International Plc,
Teva Pharmaceutical Industries Ltd and AbbVie Inc's Allergan unit.
(Reporting by Nate Raymond in Boston; Editing by Sandra Maler, Bill
Berkot and Cynthia Osterman)
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