July 19 (Reuters) – U.S. Attorneys General are expected to unveil a $ 26 billion settlement this week resolving allegations that three major drug distributors and drugmaker Johnson & Johnson helped fuel an epidemic of nationwide opioids, people familiar with the matter said Monday.
Distributors McKesson Corp (MCK.N), Cardinal Health Inc (CAH.N) and AmerisourceBergen Corp (ABC.N) together would pay $ 21 billion, while Johnson & Johnson (JNJ.N) would pay $ 5 billion. New York is expected to announce on Tuesday that distributors have agreed to a more than $ 1 billion settlement with the state, a source said.
The price of the final settlement could fluctuate depending on how many states and political subdivisions accept or reject the deal and pursue litigation themselves in the hope of a larger payment down the line.
More than 40 states are expected to support the regulation nationwide, two sources said. States will have 30 days to decide whether to join the global deal, and then more time to try to convince their cities and counties to join the deal, the sources said.
McKesson previously said that of the $ 21 billion the three distributors would pay over 18 years, more than 90% would be used to address the opioid crisis, while the rest, around $ 2 billion, would be used to pay off the opioid crisis. plaintiffs’ attorney fees and costs.
Several states have passed laws or entered into agreements with their political subdivisions to govern how settlement proceeds would be allocated in the event of a nationwide settlement.
The financial terms are in line with previous disclosures by the three distributors and J&J on what they expected to pay following lengthy settlement negotiations.
“There is still progress towards finalizing this agreement and we remain committed to providing certainty to parties involved and essential assistance to families and communities in need,” J&J said in a statement.
McKesson and Cardinal Health made no comment while AmerisourceBergen said it did not comment on “rumors and speculation.” They have all previously denied the wrongdoing.
Nearly 500,000 people died of opioid overdoses in the United States from 1999 to 2019, according to the United States Centers for Disease Control and Prevention (CDC). The opioid crisis appeared to worsen during the COVID-19 pandemic.
The CDC said last week that preliminary data showed 2020 to be a record year for drug overdose deaths with 93,331, up 29% from the previous year. Opioids were involved in 74.7%, or 69,710, of these overdose deaths. Read more
Distributors have been accused of lax controls that have diverted massive amounts of addictive pain relievers into illegal channels, devastating communities, while J&J has been accused of downplaying the risk of addiction.
Governments have said the money will be used to fund drug treatment, family support programs, education and other health initiatives to deal with the crisis.
Other settlements are also being negotiated, with opioid makers Purdue Pharma and Mallinckrodt Plc (MCDG.MU) now working in bankruptcy courts to secure support for settlements worth more than $ 10 billion and $ 1.6 billion, respectively. Read more
The Distributors have been in the midst of two nationwide lawsuits in the litigation, one in New York City and one in West Virginia. They have now agreed to resolve the New York case, a person briefed on the matter said.
The deal with New York Attorney General Letitia James and the populated counties of Long Island, Nassau and Suffolk, comes three weeks after the first jury trial accusing the companies of profiting from a flood of addictive pain relievers that have devastated them. communities. Read more
Final arguments are expected in the West Virginia trial next week. Local communities in West Virginia had chosen not to participate in the proposed national agreement to pursue one on their own.
New York lawsuit will continue against three drugmakers accused of deceptively marketing their pain relievers – Endo International Plc (ENDP.O), Teva Pharmaceutical Industries Ltd (TEVA.TA) and the Allergan unit of AbbVie Inc (ABBV.N).
Reporting by Nate Raymond in Boston; Editing by Sandra Maler, Bill Berkot and Cynthia Osterman
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