Major drug companies reach landmark $26bn US opioid settlement

The deal is the second-largest cash settlement in United States history, trailing only the $246bn tobacco deal in 1998.

A group of state attorneys general in the United States has unveiled a landmark $26bn settlement with major US drug companies accused of fuelling a deadly nationwide opioid epidemic, but some states were cool on the agreement.

Under the settlement proposal released on Wednesday, the three largest US drug distributors – McKesson, Cardinal Health and AmerisourceBergen – are expected to pay a combined $21bn, while drugmaker Johnson & Johnson would pay $5bn.

“There’s not enough money in the world frankly to address the pain and suffering,” said Connecticut Attorney General William Tong, who added however that the money will “help where help is needed”.

The deal was the second-largest cash settlement ever, trailing only a $246bn tobacco agreement in 1998, and the largest unveiled in a multiyear legal effort to hold the industry accountable for the opioids crisis, which has caused more than 500,000 deaths in the US across the last 20 years.

“The numerous companies that manufactured and distributed opioids across the nation did so without regard to life or even the national crisis they were helping to fuel,” said New York Attorney General Letitia James, one of the attorneys general from 15 states involved in the deal.

“Today, we are holding these companies accountable and infusing tens of billions of dollars into communities across the nation,” James said in a statement.

Ambulance medics and other first responders revive a 32-year-old man who was found unresponsive and not breathing after an opioid overdose in Everett, Massachusetts, US [File: Brian Snyder/Reuters]

Settlement money from the distributors will be paid out across 18 years. J&J will pay across nine years, with up to $3.7bn paid during the first three years. The money is expected to be used on addiction treatment, family support, education and other social programmes.

“This settlement will directly support state and local efforts to make meaningful progress in addressing the opioid crisis,” said Michael Ullmann, Johnson & Johnson’s general counsel.

Al Jazeera’s Gabriel Elizondo said the settlement money could begin to be distributed to states and localities as soon as the end of the year.

Public health officials have said that if used correctly, the funds “could be a good first step to contain the epidemic of opioids in the United States”, Elizondo reported. “But again, it has to be used correctly.”

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 in its opioid marketing.

The companies have denied the allegations.

More than 3,000 lawsuits related to the health crisis, mostly by state and local governments, have been filed [File: Jeff Chiu/AP Photo]

The settlement also calls for the creation of an independent clearinghouse to provide the distributors and state regulators aggregated data about drug shipments, which negotiators hope will help prevent abuse.

More than 3,000 lawsuits related to the health crisis, mostly by state and local governments, have been filed across the US. Negotiators have struggled to find a structure that would garner enough local government support to assure the defendants a deal will put an end to nearly all litigation.

As a result, the ultimate settlement amount depends on the extent states sign up for the deal and confirm their cities and counties are on board.

“The expectation is north of 40 and well north of 40 will sign on,” said North Carolina Attorney General Josh Stein.

The opioid crisis has hit some parts of the US much harder than others, creating divisions among governments when it comes to considering the settlement. States will have 30 days to evaluate the agreement.

“States that don’t sign on are being irresponsible,” said Louisiana Attorney General Jeff Landry. “We don’t want perfect to be the enemy of the good.”

Meanwhile, the opioid crisis has shown no sign of letting up. The US Centers for Disease Control and Prevention last week said provisional data showed that 2020 was a record year for overall drug overdose deaths with 93,331 fatalities, up 29 percent from a year earlier.