In a spectacular move, four giant US drug companies have agreed to a $2.6 billion settlement over claims they helped in fuelling a deadly opioid crisis. Three drug distributors will pay $21 billion, while drugmaker Johnson & Johnson (J&J) is expected to pay within five years the amount of $5 billion.
Letitia James, New York attorney general, expressed in a statement that the settlement resolves over 4,000 claims in various federal and state courts against the drugmakers responsible for fuelling “the fire of opioid addiction for more than two decades.”
Furthermore, she explained that while the settlement does not in any way make up for the fatalities of opioid addiction, it is significant to “take every action possible to avoid any future devastation.”
Big Pharma agrees to payout
The four US drug giants who agreed to the landmark payout include Cardinal Health, McKesson, AmerisourceBergen, and Johson & Johnson. New York City alleged that all four companies created a public nuisance and claimed that the drug distributors committed negligence.
Specifically, the complaint accused Cardinal Health, McKesson, and AmerisourceBergen of turning a blind eye when they ignored the diversion of painkiller shipments to illegal channels. In addition, it tagged J&J as being complicit in the opioid crisis because its marketing materials downplayed the risks of opioids.
The US Centers for Disease Control and Prevention consider opioids, including heroin and painkillers, a public health risk. Opioids are involved in over 42,249 deaths in 2016, nearly half more deaths from 2014, and 28 percent more in 2015.
All four defendants were accused of misleading the public into thinking that prescription opioids were harmless and only had minimal addiction risk. In addition, New York City also accused drug distributors of fueling opioid abuse via oversupply and complicity in the emergence of an illicit secondary market.
What the settlement means
A bulk of the settlement is earmarked for opioid prevention and treatment. States will receive a percentage of the settlement based on the number of opioid deaths, population size, and the number of opioids prescribed.
Speaking in a joint statement, the drugs distributors expressed their “deep concern” over the opioid crisis and its impacts on American individuals and families. They also stated that they “are committed to being part of the solution.”
While the accused firms assert that the allegations are untrue, they believe the settlement is a win-win for communities who need relief from the crisis. J&J’s general counsel said that the company has only the “deepest sympathy” for everyone affected by the opioid crisis.
Not every state involved in the complaint is on board with the settlement. States have 30 days to decide whether they are willing to sign, and local governments have 150 days.
New York City has signed up, but Washington has thumbed down the settlement agreement. Washington’s attorney general Bob Ferguson tweeted that they will take all four to trial and that they are committed to “hold these companies responsible for their conduct.”