Attorney General Shapiro Announces $26 Billion Agreements with Opioid Distributors/Manufacturer

July 21, 2021 | Topic: Opioids

Pennsylvania One of Lead States in Negotiating Deals with AmerisourceBergen, Cardinal Health, McKesson, and Johnson & Johnson to Deliver Up to $1 Billion to PA

HARRISBURG—Attorney General Josh Shapiro today announced a historic agreement with Cardinal, McKesson, and AmerisourceBergen—the nation’s three major pharmaceutical distributors—and Johnson & Johnson, which manufactured and marketed opioids, to deliver up to $26 billion to address the opioid crisis. The agreements also require significant industry changes that will help prevent this type of crisis from happening again.

“No amount of money, no number of sanctions, will be able to right these wrongs. But this settlement puts in place controls that will go a long way to make sure that this never happens again, and the money that will come to Pennsylvania will help offer and expand life-saving treatment options across our Commonwealth,” said Attorney General Josh Shapiro.

The agreement would resolve the claims of both states and local governments across the country, including the nearly 4,000 that have filed lawsuits in federal and state courts. Following today’s agreement, states have 30 days to sign onto the deal and local governments in the participating states will have up to 150 days to join to secure a critical mass of participating states and local governments. States and their local governments will receive maximum payments if each state and its local governments join together in support of the agreement.

“We expect broad support for this agreement from Attorneys General of both parties. As a group, we know two things to be true: the cost of this epidemic is immense—far more than this deal, and this agreement is the best way to deliver the most help to communities in need, right now. Today’s action sends a message to drug distributors and pharmaceutical companies that we won’t accept this behavior, and that we’re here to always fight for the people we serve,” said AG Shapiro.

Pennsylvania was one of the lead states in negotiating these deals and intends to sign them, making Pennsylvania local governments eligible to participate. Pennsylvania’s share will be distributed among the Commonwealth and local governments pursuant to an intrastate allocation agreement. Pennsylvania stands to receive a maximum combined payment of approximately $1 billion for full participation across both agreements.

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 funding distributed 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 funds was determined by agreement among the states using a formula that takes into account the impact of the crisis on the state–including the number of overdose deaths, the number of residents with substance use disorder, the quantity of opioids delivered–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.

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.

Tragically, just last year, overdose deaths rose to a record 93,000, a nearly 30 percent increase over the prior year. In Pennsylvania, overdose deaths increased to 5,172, meaning an average of 14 Pennsylvanians died of drug overdoses each day. From 2017-2020, 16,897 Pennsylvanians lost their lives to drug overdoses. Many, many more have seen their lives torn apart by the disease of addiction. The damage also impacts their families and friends and their broader communities that suffer the consequences.

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