Welcome to the Reuters.com BETA. Read our Editor's note on how we're helping professionals make smart decisions.
Skip to main content

U.S. states rush to meet deadline to join $26 billion opioid settlement

3 minute read
1/3

REUTERS/George Frey

The company and law firm names shown above are generated automatically based on the text of the article. We are improving this feature as we continue to test and develop in beta. We welcome feedback, which you can provide using the feedback tab on the right of the page.

Aug 19 (Reuters) - U.S. states are racing to meet a deadline to commit to a $26 billion opioid settlement with three drug distributors and the drugmaker Johnson & Johnson (JNJ.N), as some grapple with local resistance and concerns the amount isn't big enough to address the damage done by an epidemic of addiction.

Fourteen state attorneys general unveiled the proposed settlement with McKesson Corp (MCK.N), AmerisourceBergen Corp (ABC.N), Cardinal Health Inc (CAH.N) and J&J on July 21, kicking off a months-long process for states, counties and cities to sign on.

By Saturday, states must decide whether to join settlements that call for the distributors to pay $21 billion and J&J to pay $5 billion, money meant to help fund treatment and other services. The epidemic of opioid abuse has resulted in nearly 500,000 overdose deaths since 1999, according to the U.S. government.

The settlement's complex formula envisions at least 44 states participating, but ultimately the companies decide whether a "critical mass" have joined and whether to finalize the deal.

North Carolina Attorney General Josh Stein, a lead negotiator, last month said he expected "well north" of 40 states to join. But several are against it, including Washington and New Mexico and communities in West Virginia holding out in hopes of recouping more.

Michigan, South Carolina and Nevada say they are still evaluating the deal. Ohio, which was slated to take the distributors to trial next month, is nearing a separate, related $808 million deal with them.

In hard-hit New Hampshire, Associate Attorney General James Boffetti said he recently told a judge the state was unlikely to join the deal with J&J, which the state plans to take to trial next year.

"That settlement is small in comparison to the harm that they caused in New Hampshire and other places," he said. "It's just not sufficient."

The settlement aims to resolve more than 3,000 lawsuits accusing the distributors of ignoring red flags that pain pills were being diverted into communities for illicit uses and that J&J played down the risks of opioid addiction.

The companies deny wrongdoing, saying the drugs were approved by the U.S. Food and Drug Administration and that responsibility for ballooning painkiller sales lies with others, including doctors and regulators.

The participation of states is tied closely to that of their local governments, who brought the majority of lawsuits.

Ultimately, $10.7 billion is tied to the extent localities participate.

Texas Attorney General Ken Paxton on Aug. 5 announced the state would join the distributors' settlement, but in a twist said the state was "still evaluating" J&J's piece.

Some local Texas governments have opposed the deal, and a January trial date is set in a lawsuit by the populous city of Dallas, which has sued the distributors, J&J and others for $10.5 billion.

Mark Lanier, a lawyer for the city, said he was in discussions with J&J and was "hopeful we can find a resolution." But he said Dallas' case against the distributors would move forward.

Paul Geller, a lead negotiator for the plaintiffs with Robbins Geller Rudman & Dowd, called on elected officials to unify for the "greater good."

"The only way this deal works, and we've known this from the beginning, is if leaders embrace a level of responsibility that extends beyond local borders," Geller said.

Reporting by Nate Raymond in Boston Editing by Noeleen Walder and Grant McCool

Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.

More from Reuters