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US opioid crisis: Drug firms say states back $26B payout

September 5, 2021

After striking a historic deal with prosecutors over the opioid epidemic, US drug giants said "enough" states have shown support for the settlement to proceed.

Pills for representation
The proposed agreement is the second-largest cash settlement in US historyImage: Medea Film

Four companies in the drug industry said Saturday that 48 US states and territories supported a landmark settlement over the opioid epidemic.

Johnson & Johnson and three other large US drug distributors had struck a deal with state prosecutors to pay out more than 3,000 lawsuits that accused them of fueling opioid addiction in the country.

The drug firms had until Saturday to decide whether enough states backed the $26 billion (€22.4 billion) payout to move ahead on settling the amount.

What is the settlement?

At least 42 states, five territories, and Washington D.C. have signed on to the agreement, distributors said.

Drug distributors McKesson, AmerisourceBergen, Cardinal Health are expected to pay a combined $21 billion. Johnson & Johnson will pay $5 billion.

The distributors will make their annual settlement into escrow on or before September 30. The final amount will vary on several factors, including the final participation rate of states and political subdivisions.

North Carolina Attorney General Josh Stein, a lead settlement negotiator, said state backing showed a "remarkable show of unity and commitment across the country to address the problem" of opioid addiction.

He called on local governments to sign the deal. This would be the final step to seal the deal on the way in which the settlement money is distributed into local communities within states. 

Local governments have until January 2 to decide whether they would like to participate.

Alabama, Georgia, Nevada, New Mexico, Oklahoma, Washington and West Virginia have not supported the settlement, according to Reuters news agency.

The drug giants in July said they "strongly dispute the allegation made in the lawsuits," but that the settlement was an important step toward resolution. 

The settlement is meant to finance prevention and treatment programs in local communities.

rm/fb (Reuters, AP)