Johnson & Johnson and Distributors Finalize Landmark $26 Billion Opioid Settlement

(Camden, N.J.) — Drugmaker Johnson & Johnson and three major distributors finalized nationwide settlements over their role in the opioid addiction crisis Friday, an announcement that clears the way for $26 billion to flow to nearly every state and local government in the U.S.

Together, these settlements represent the most significant among all the opioid-related cases currently being handled across the United States. They’re expected to provide a significant boost to efforts aimed at reversing the crisis in places that have been devastated by it, including many parts of rural America.

Johnson & Johnson, AmerisourceBergen, Cardinal Health, and McKesson announced the settlement plan last year, but the deal was contingent on getting participation from a critical mass of state and local governments.
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Friday was the deadline by which the companies had to inform the governments whether or not they believed enough government officials were willing to join the settlement. Four companies informed lawyers representing the governments that they had met their thresholds. Money could begin flowing to the communities as early as April.

“We’re never going to have enough money to immediately cure this problem,” said Joe Rice, one of the lead lawyers who represented local governments in the litigation that led to the settlement. “What we’re trying to do is give a lot of small communities a chance to try to change some of their problems.”

The majority of settlement money must be spent to address the crisis. This funding is urgently needed.

Kathleen Noonan is the CEO of Camden Coalition of Healthcare Providers. She stated that some of the settlement money could be used for housing people who have addictions or are homeless.

“We have clients who have a hard time staying clean to make it in a shelter,” she said. “We would like to stabilize them so we can help them recover.”

Camden County spokeswoman Dan Keashen stated that Camden County officials might use settlement money to finance a public education campaign warning about the dangers associated with fentanyl. Officials also intend to put more drug counsellors out on the streets as well as additional social workers at municipal courts. The county jail will be equipped with anti-addiction medication.

Learn More: Why Prescription Opioids Aren’t Only a Problem for White Americans

Officials from across the nation are looking at ways to use the money for similar purposes.

California Gov. Gavin Newsom’s proposed budget calls for using $50 million of the state’s expected $86 million share this year for youth opioid education and to train treatment providers, improve data collection and distribute naloxone, a drug that reverses overdoses.

In Florida’s Broward County, home to Fort Lauderdale, the number of beds in a county-run detoxification facility could be expanded from 50 to 70 or 75, said Danielle Wang French, a lawyer for the county.

“It’s not enough, but it’s a good start,” she said of the settlement.

Experts in public health are asking governments to make sure that people suffering from addictions have access to treatment. There is still a lot of fatal overdoses across America, mostly due to the proliferation of synthetic opioids and fentanyl. Public health experts stress the importance of funding programs that have been proven effective, collecting data about their successes, and launching prevention efforts for young people. All this while keeping racial equity in mind.

“It shouldn’t be: ready, set spend,” said Joshua Sharfstein, a former secretary of the Maryland Department of Health who is now a vice dean of public health at Johns Hopkins University. “It should be: think, strategize, spend.”

In a separate deal that also is included in the $26 billion, the four companies reached a $590 million settlement with the nation’s federally recognized Native American tribes. A total of $2 billion has been set aside to cover fees and expenses for lawyers involved in the case, who worked on it for years.

New Brunswick, New Jersey-based Johnson & Johnson has nine years to pay its $5 billion share. The distributors — Conshohocken, Pennsylvania-based AmerisourceBergen; Columbus, Ohio-based Cardinal Health; and Irving, Texas-based McKesson — agreed to pay their combined $21 billion over 18 years. States must get their local governments to agree to the maximum amount in order to reach it.

These settlements will go far beyond the money. J&J, which has stopped selling prescription opioids, agrees not to resume. They agree to share data with a clearinghouse to flag instances when prescription opioids are sold on the black market.

They aren’t admitting any wrongdoing, and they continue to defend themselves against allegations that they contributed to the opioid crisis. These claims were made by other entities.

This contrasts with previous public health settlements that were made with tobacco firms in the 1990s. In such cases, the states spent large amounts of the settlement money on other priorities and to plug budget gaps.

Learn MoreOpioid Epidemic: Ignored Victims in Older Americans

A formula is used to determine how much money each state receives under the opioid settlement. It takes into consideration the magnitude of the crisis as well as the size and population. The money is also shared with county and local governments. A handful of states — Alabama, New Hampshire, Oklahoma, Washington and West Virginia — have not joined all or part of the settlement, mostly because they have their own deals or are preparing for trial.

Lisa Davey is a Maryville Addiction Treatment Center recovery specialist. She was present at the Camden needle exchange handing out Naloxone to people and asking if they would like to get treatment.

Davey stated that she would like to see more funding for detoxification and treatment programs to ensure people stay in these programs longer. According to Davey, people can still detox, and they are able to go back on the streets searching for drugs within days.

“They need more time to work their recovery,” she said.

Anthony P. was the man that picked up clean needles. He was 46 years old and has struggled with drug addiction since his youth. He said he’d like to see an effort to cut off fentanyl and related synthetic opioids that are driving overdose death rates from the drug supply.

“Fentanyl’s got to go,” he said.

Martha Chavis (CEO and president of Camden Area Health Education Center), which manages the needle exchange said there is a need to offer services such as hers in other places. Users from distant suburbs now travel to Camden for clean needles, and to have their drug tests done.

The settlement with J&J and the three distributors marks a major step toward resolving the vast constellation of lawsuits in the U.S. over liability for an epidemic that has been linked to the deaths of more than 500,000 Americans over the past two decades.

McKinsey, a business consultant, and Endo, Mallinckrodt, and Teva are among the other companies that have entered into national or regional settlements. Purdue Pharma, an OxyContin manufacturer, and several states have entered mediation with the U.S. Bankruptcy Court in order to attempt to achieve a national settlement.

This crisis was exacerbated by the coronavirus epidemic, when the number of U.S.-related opioid-related deaths soared to more than 76,000 over the twelve months ending in April 2021. The increase in opioid-related deaths is primarily due to the widespread use of fentanyl, and other laboratory-made drugs. Recent report by the Commission LancetAccording to medical journals, 1.2 Million Americans would die from opioid overdose if policies are not changed between 2020-2029.

John F. Kelly of Harvard Medical School is an addiction psychiatrist and professor. Kelly said he wanted to see settlement money go for not only treatment, recovery, support efforts, but to also build systems that will prevent another epidemic.

“Some kind of national board or organization could be set up … to prevent this kind of lack of oversight from happening again — where industry is allowed to create a public health hazard,” he said.


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