State reaches $26B settlement with major opioid manufacturer, distributors

MGN

Minnesota Attorney General Keith Ellison last week joined a large multistate coalition announcing a historic $26 billion agreement with major opioid manufacturer Johnson & Johnson and the nation’s three major pharmaceutical distributors—Cardinal, McKesson, and AmerisourceBergen—that will bring much-needed relief to communities in Minnesota and across the country that have been devastated by the opioid crisis.

Minnesota’s share of this agreement could be as much as $337 million over 18 years, with significant payments frontloaded in the first five years. The spending of State of Minnesota funds from the agreement will be overseen by the State’s Opioid Epidemic Response Advisory Council.

The agreement also requires data transparency and significant industry changes that will help prevent this type of crisis from ever happening again. The agreement would resolve investigations and claims against these companies of the nearly 4,000 states and local governments across the country that have filed lawsuits in federal and state courts.

“There is no amount of money that can ever make up for the death and destruction these companies caused in the pure pursuit of profit. No amount of money can bring back the nearly 5,000 lives we lost in Minnesota or fully restore the communities devastated in every part of our state,” said Ellison.

 “But it is still critically important to hold these companies financially accountable for their role in creating and extending the opioid crisis, and this agreement does that and more. I’m especially pleased it requires them to turn over data that will help us learn what they did to us, and puts in place controls to ensure that they can never do it again. I will continue to fight to make transparency part of any and all future agreements with opioid companies.  

“We have worked hard for many years to secure this agreement. I await the final terms but assuming they are acceptable, I encourage every Minnesota community to sign onto this agreement so that we can continue the process of healing and accountability,” said Ellison.

States and their local governments will receive maximum payments if each state and its local governments join together in support of the agreement. 

This settlement comes as a result of investigations by state attorneys general into whether the three distributors fulfilled their legal duty to refuse to ship opioids to pharmacies that submitted suspicious drug orders and whether Johnson & Johnson misled patients and doctors about the addictive nature of opioid drugs.

Funding overview

The three distributors collectively will pay up to $21 billion over 18 years.  

Johnson & Johnson will pay up to $5 billion over nine years with up to $3.7 billion paid during the first three years.  The total payments will be determined by the overall degree of participation by both litigating and non-litigating state and local governments. The substantial majority of the money is to be spent on opioid treatment and prevention. 

Each state’s share of the funding has been determined by agreement among the states using a formula that takes into account the impact of the crisis on the state—the number of overdose deaths, the number of residents with substance use disorder, and the number of opioids prescribed—and the population of the state. 

 Injunctive relief overview

The 10-year agreement will result in court orders requiring Cardinal, McKesson, and AmerisourceBergen to:

  • ​Establish a centralized independent clearinghouse to provide all three distributors and state regulators with aggregated data and analytics about where drugs are going and how often, eliminating blind spots in the current systems used by distributors. 
  • Use data-driven systems to detect suspicious opioid orders from customer pharmacies.
  • Terminate customer pharmacies’ ability to receive shipments, and report those companies to state regulators, when they show certain signs of diversion.
  • Prohibit shipping of and report suspicious opioid orders. \Prohibit sales staff from influencing decisions related to identifying suspicious opioid orders.
  • Require senior corporate officials to engage in regular oversight of anti-diversion efforts.

 The 10-year agreement will result in court orders requiring Johnson & Johnson to:

  • Stop selling opioids. 
  • Not fund or provide grants to third parties for promoting opioids.
  • Not lobby on activities related to opioids.
  • Share clinical trial data under the Yale University Open Data Access Project.

Human toll of the opioid crisis

In 2020 alone, opioid overdose deaths nationally rose to a record 93,000, a nearly 30 percent increase over the prior year. According to the Minnesota Department of Health Drug Overdose Dashboard, 4,821 Minnesotans died of opioid overdoses from 2000-19. The crisis is far from over today: preliminary reports show 654 opioid-involved deaths in Minnesota in 2020, a 59% increase from 2019. Emergency room visits for opioid-involved overdoses increased from 1,618 in 2016 to 3,990 in 2020. Native Americans in Minnesota are seven times more likely than white people to die of a drug overdose, and African Americans are twice as likely.

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