Alabama settles opioid claims with J&J, McKesson, Endo for $276 million -attorney general

[April 20, 2022]  By Dietrich Knauth

(Reuters) -Alabama on Tuesday reached $276 million in settlements with Johnson & Johnson, McKesson Corp and Endo International Plc, resolving claims that the companies fueled an opioid addiction crisis, the state attorney general said.

Under the settlement, drug distributor McKesson will pay $141 million toward the state's efforts to combat the opioid crisis, while drugmakers Johnson & Johnson and Endo will pay $70.3 million and $25 million, respectively, Alabama Attorney General Steve Marshall said in a statement. The three companies will also pay $40 million in attorneys' fees.

The state had accused McKesson of failing to prevent the diversion of opioids for illicit purposes, and the drugmakers of engaging in deceptive marketing practices that downplayed the addiction risks of their painkillers. The companies have denied wrongdoing.

J&J, which manufactured the pain medications Duragesic and Nucynta, said it no longer sells prescription opioids in the United States and that its past marketing efforts were "appropriate and responsible."

McKesson and Endo did not immediately respond to requests for comment.

Alabama was one of four states that declined to join a nationwide $26 billion settlement of opioid litigation by McKesson, two other top U.S. distributors and J&J that was finalized in February. [L1N2V01ZA]

“These three settlement agreements affirm my decision to decline participation in the national opioid settlements, which did not adequately acknowledge the unique harm that Alabamians have endured," Marshall said in a statement.

Alabama will get more from McKesson and a faster payout from J&J, compared to what the state would have received under the national settlement, Marshall said.

The Johnson & Johnson logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 29, 2019. REUTERS/Brendan McDermid

Alabama would have received $115 million over 18 years from McKesson under the national settlement framework, and J&J would have paid $70.3 million over nine years. Under the new settlement, J&J will now make full payment within a year, while McKesson will pay within nine years, Marshall said.

The state had been on the verge of a trial against McKesson, with opening arguments scheduled for Monday before the two sides requested a delay.

The Alabama deal comes amid a wave of litigation and settlement by state governments over the U.S. opioid crisis, which has led to more than 500,000 overdose deaths over two decades, according to the U.S. Centers for Disease Control and Prevention.

West Virginia on Monday announced a $99 million settlement with J&J [L2N2WG0W8], and is in the midst of a trial against drugmakers Teva Pharmaceutical Industries and AbbVie's Allergan unit.

Florida reached more than $878 million in opioid settlements with CVS Health Corp and three drug companies in March, and began a trial against pharmacy chain Walgreens Boots Alliance on April 11.

(Reporting by Dietrich KnauthEditing by Bill Berkrot)

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