TThree of the largest pharmaceutical wholesalers and a major drugmaker have reached a $ 26 billion deal to settle state government lawsuits accusing companies of fomenting the opioid crisis, which has left half a million deaths in nearly two decades.
As part of the settlement, the wholesalers – McKesson (MCK), AmerisourceBergen (ABC) and Cardinal Health (CAH) – will pay up to $ 21 billion over the next 18 years, while Johnson & Johnson (JNJ) has agreed. to pay up to $ 5. billion over nine years and exit the opioid industry. More than 40 states are expected to accept the settlement, according to North Carolina Attorney General Josh Stein.
About 3,000 lawsuits from states, counties, cities and tribes claimed wholesalers failed to monitor suspicious shipments. Drugmakers have been accused of downplaying the risk of addiction to opioid pain relievers while encouraging doctors to over-prescribe the drugs.
More than 93,000 people died from drug overdoses in 2020, a 30% increase from 2019 and the highest number on record, according to data from the Centers for Disease Control and Prevention. The toll has strained communities across the country as they sought to cope with the costs of overdoses and deaths. A substantial portion of the settlement funds should be spent on opioid treatment and prevention.
“This epidemic was created by an army of pharmaceutical executives, who decided they wanted to put their profits before the health and well-being” of the public, “Pennsylvania Attorney General Josh Shapiro said at a press briefing announcing the settlement. The deal makes no mention of criminal charges, however, and New York Attorney General Letitia James declined to comment when asked if charges could be laid at a later date.
State governments have 30 days to sign the deal and if enough of them choose to accept the deal – which plaintiffs’ lawyers call “critical mass” – the next step requires a sufficient number of governments. locals accept the deal. Local governments will have an additional 120 days to do so. If the proposed regulations remove those barriers, it can continue. Native American tribes are not part of the deal, however.
In total, states expect they will reach about $ 32.7 billion in settlements with opioid manufacturers and wholesalers, according to Stein. The wholesalers had already struck a $ 215 million deal with two Ohio counties, for example. And litigation continues in various courts across the country, including West Virginia, New York and California.
The settlement, which had been negotiated for nearly two years, was greeted with caution by a coalition of public health groups who earlier this year released a set of guidelines for the use of settlement funds. These included investing in local health programs; rely on medical evidence to better deploy the money; invest in prevention among young people, focus on racial equity and develop a fair and transparent decision-making process.
“Billions of dollars in opioid settlement funding will provide states and communities with a unique opportunity to address critical gaps in our current infrastructure for prevention, treatment and recovery. By following these five core principles, states can ensure that this funding will support evidence-based approaches that can have a lasting impact on the substance abuse crisis, ”said Mark McClellan, who heads the Duke-Margolis Center for Health Policy and a former Centers for Medicare & Medicaid Administrator, in a statement.
The regulations also provide for the creation of a centralized and independent clearinghouse to provide wholesalers and state regulators with aggregated data on where and how often drugs are shipped. The aim is to eliminate “blind spots” in current distribution systems. Companies should also crack down on suspicious drugstore orders and step up monitoring of anti-diversion programs.
Meanwhile, Purdue Pharma, which marketed OxyContin, is awaiting an Aug. 9 hearing on its bankruptcy proposal. As part of his plan, some members of the Sackler family who own the drug maker would contribute more than $ 4.3 billion to compensate people and local governments who have been harmed by his opioid pain reliever.
Additionally, Purdue will be liquidated or sold by 2024, the Sacklers will be banned from the opioid business, and they will have to cede control of the family foundations to an independent trustee. In return, members of the Sackler family will be granted immunity from further prosecution. The proposal has sparked backlash among some state attorneys general, who argue that the Sackler family members walk away with considerable wealth.