U.S. state attorneys general and lawyers for local governments are expected on Wednesday to unveil a landmark, $26 billion settlement resolving claims that the three largest U.S. drug distributors and drugmaker Johnson & Johnson helped fuel a nationwide opioid epidemic, a person familiar with the matter said.
Under the settlement proposal, distributors McKesson Corp , Cardinal Health Inc and AmerisourceBergen Corp are expected to pay a combined $21 billion, while Johnson & Johnson would pay $5 billion.
More than 40 states are expected to sign onto the settlement, the source said, while others could opt to move forward with their own cases. States will have 30 days to decide whether to join the global accord, the source said.
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 had no comment. The other two distributors did not immediately respond to a request for comment. 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 have worsened 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 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.
Closing arguments are expected in the West Virginia trial next week. The local West Virginia communities had opted out of the proposed nationwide deal to pursue one on their own. (Reporting by Nate Raymond in Boston; Editing by Sandra Maler and Bill Berkot)
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