Johnson & Johnson And Drug Distributors Finalize $26 Billion Settlement To End Opioid Crisis Lawsuits

Topline

Johnson & Johnson and the three largest U.S. drug distributors have agreed to move forward with a proposed $26 billion settlement to more than 3,000 civil lawsuits from states and local governments over the companies’ role in the opioid epidemic that has killed roughly half a million Americans.

Key Facts

Johnson & Johnson will pay $5 billion over nine years of annual payments through Janssen, a pharmaceutical subsidiary, while the three drug distributors – Cardinal Health, AmerisourceBergen and McKesson – will pitch in a combined $21 billion over double that time frame.

The money will be released to states and local governments that signed onto the deal in exchange for dropping their civil lawsuits against the four companies and vowing to not pursue future legal action.

At least 85% of the settlement will go toward addiction treatment and prevention services and the first payments are slated for April.

It’s the second-largest settlement of civil litigation in U.S. history, behind the $206 billion tobacco settlement in 1998.

Tangent

The $26 billion deal is the latest in a series of opioid-related settlements. An Oklahoma judge ordered Johnson & Johnson to pay $572 million in 2019 after ruling the company was partially responsible for the state’s opioid epidemic, and the company settled a similar case in New York in June for $230 million. Last week, the billionaire Sackler family – who owned Oxycontin maker Purdue Pharma – proposed a $6 billion settlement to shield them from litigation after a judge last year blocked the family’s previous $4.33 billion proposed settlement.

Key Background

In 2020, drug overdose deaths reached a record high of more than 93,000 amid the onset of the coronavirus pandemic, jumping by nearly 30% over the previous year, according to the Centers for Disease Control and Prevention. The surge was driven by synthetic opioids like fentanyl, according to the CDC. Opioid overdose deaths cost the American economy an estimated $1 trillion annually, according to a report earlier this month from the U.S. Commission on Combating Synthetic Opioid Trafficking.

Further Reading

J&J And Other Drug Companies Strike $26 Billion Opioid Settlement With States (Forbes)

Drug Overdose Deaths Surged 29% Last Year Amid Covid Pandemic, CDC Says (Forbes)

Opioid Overdose Deaths Cost U.S. Economy $1 Trillion A Year, Study Finds (Forbes)