Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. states to unveil $26 billion opioid settlement with drug distributors, J&J - sources

WorldJul 19, 2021 10:40PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A Johnson & Johnson building is shown in Irvine, California, U.S., January 24, 2017. REUTERS/Mike Blake

By Nate Raymond

(Reuters) -U.S. state attorneys general are expected this week to unveil a $26 billion settlement resolving claims that three major drug distributors and drugmaker Johnson & Johnson (NYSE:JNJ) helped fuel a nationwide opioid epidemic, people familiar with the matter said on Monday.

Distributors McKesson Corp (NYSE:MCK), Cardinal Health Inc (NYSE:CAH) and AmerisourceBergen (NYSE:ABC) 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.

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 (OTC:MNKKQ) 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 (NASDAQ:ENDP) Plc, Teva Pharmaceutical Industries (NYSE:TEVA) Ltd and AbbVie Inc (NYSE:ABBV)'s Allergan (NYSE:AGN) unit.

U.S. states to unveil $26 billion opioid settlement with drug distributors, J&J - sources
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email