$26 billion settlement will fund battles against opioid crisis

jJlogo-300x139States, counties, and cities within weeks could start to receive desperately needed money to battle the deadly opioid abuse and overdose crisis as part of a newly finalized, $26 billion settlement with the largest distributors of prescription medications and a onetime maker of powerful painkillers.

Janssen, one of the distributors, and the pharmaceutical giant Johnson & Johnson will pay $5 billion a year for nine years as part of the deal struck in the summer and approved by plaintiffs in the case, according to the New York Times. The other three distributors — McKesson, Cardinal Health, and AmerisourceBergen —will pay a combined $21 billion over 18 years.

Under the settlement, 85% of these payouts will cover addiction treatment and prevention efforts aimed at quelling the opioid crisis. It has claimed an estimated 500,000 American lives over a decade. It worsened during the coronavirus pandemic, killing an estimated 100,000 Americans last year and setting disconcerting new fatality records, especially with the rise of synthetic opioids like fentanyl. Those drugs, which criminals are lacing into their wares, including marijuana, are extremely potent at even tiny doses.

Why the deal matters

J&J, which long has promoted itself as a warm, family friendly enterprise and has emphasized that it has stopped making opioids, denied any wrongdoing in settling this wave of lawsuits against it. The distributors also have denied they did anything wrong. The defendants, though, settled the governmental lawsuits against them in return for the litigation’s end and the pledge that these plaintiffs will not file more suits against them. As the New York Times reported:

“By signing onto the deal, thousands of local governments as well as states have agreed to drop their opioid lawsuits against the companies and also pledge not to bring any future action. In its sweep and bottom line, the deal is second only to the Big Tobacco settlement of the late 1990s as a multistate agreement. The total amount includes almost $2 billion that will cover fees and costs for the platoons of lawyers nationwide who represented local governments as well as some states and built much of the legal strategy in the cases. Those payments will go out over roughly seven years. There are no separate funds to compensate families and individual victims of the opioid crisis.

“The announcement is a milestone in the nationwide opioid litigation, which began in 2014 with a few cities and counties filing lawsuits against five drug manufacturers. But as thousands of governmental plaintiffs eventually filed claims, the cases reached across the pharmaceutical industry, to distributors and retailers as well. The actions gelled into a modern legal behemoth that is still far from fully resolved, featuring, most prominently, the cases against Purdue Pharma.”

The legal battles are far from over

The Sacklers, who owned and ran Purdue, have tried to use the federal bankruptcy system to limit any legal liability by members of the plutocratic family for the shameful hustle of this maker’s pathbreaking opioid OxyContin. The family has refused to concede any wrongdoing and clutched its fortunes — billions of dollars — in negotiations, which have featured a bankruptcy ruling upended by a federal judge. In their latest gambit to end legal actions involving themselves and Purdue, they have upped their ante by a billion dollars more to try to settle.

(J&J, in a separate lawsuits, has taken the Purdue bankruptcy blueprint to a new, much-disputed extreme, creating a subsidiary insolvent almost from its launch because the pharma titan spun into it a raft of claims asserting the company knew its iconic baby powder was tainted with cancer-causing asbestos. Plaintiffs have argued that this legal dodge is impermissible and bankruptcy courts should hew to their limited congressional mandate of allowing failed enterprises to sort out debts and dissolve. A federal judge, in a decision sure to be appealed, has allowed the J&J subsidiary to try to resolve billions of dollars in claims.)

In the J&J and distributors case, Alabama, New Hampshire, Oklahoma, Washington, and West Virginia are preparing to go to trial or have struck separate deals. Native American plaintiffs already have struck separate settlements totaling $665 million with these plaintiffs and calling for speedy payments to tribes.

The Associated Press, in its reporting on the J&J and distributor settlement, listed some of the ways that governments plan to use their payments to battle the opioid crisis, including for shelter for the addicted and unhoused (Camden County, N.J), improved distribution of the overdose reversing drug naxalone and greater youth outreach (state of California), and expanded bed space in treatment facilities (Broward Country, Fla.).

Joe Rice, one of the lead lawyers for local governments in the J&J-distributor suits, made a crucial point about the settlement, telling the Washington Post this:

“We’re never going to have enough money to immediately cure this problem. What we’re trying to do is give a lot of small communities a chance to try to change some of their problems.”

Indeed. In my practice, I see not only the harm that patients suffer while seeking medical services, but also the damage that can be inflicted on them by dangerous drugs.

The opioid crisis took time to blow up, fueled by Big Pharma and abetted by doctors, nurses, hospitals, insurers, regulators, and many others in health care. While progress appeared to have been made in dealing with this mess, this public health menace exploded anew during the coronavirus pandemic. It demands a full-on, urgent response to put down.

The civil justice system has provided an important way for the many victimized by opioids to seek compensation as well as the financial and other resources so needed to deal with the addiction, debilitation, and death caused by this country’s inundation with potent prescription painkillers. But much more needs to be done. We have much work to do to halt one of the major health crises confronting the country.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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