Tennessee announces $26 billion dollar agreement with opioid distributors

Attorney General Herbert H. Slatery III announced a historic $26 billion agreement regarding opioid addiction.
Published: Jul. 21, 2021 at 2:54 PM EDT|Updated: Jul. 21, 2021 at 5:09 PM EDT
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NASHVILLE, Tenn. (WVLT) - Tennessee Attorney General Herbert H. Slatery III announced a historic $26 billion agreement that will bring relief to people across the country struggling with opioid addiction.

The agreement is between state and local governments and Cardinal, McKesson and AmerisourceBergen, the nation’s three major pharmaceutical distributors, and Johnson & Johnson, which manufactured and marketed opioids.

The agreement will resolve investigations and litigation over companies’ roles in fueling the opioid epidemic and will prevent it from happening again.

State negotiations were led by Attorneys General Josh Stein (NC), Herbert Slatery (TN), and the attorneys general from California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, New York, Ohio, Pennsylvania and Texas.

“We’ve reached an agreement in the most complicated civil case in American history,” said General Slatery. “Yes, it took several years. It required a lot of give and take from everyone involved but now we have one. The negotiating states were both red and blue; this was a bipartisan effort from start to finish. We acted on behalf, and at the direction of, a host of other states. Our objective was to solve a national problem that has touched virtually everyone in one way or another. We want all states and local governments to sign on. That way we can hold these companies accountable (as they should be), get immediate funds to programs that will reduce the crisis and save lives, and do so now, as opposed to years of litigation and the costs that go with it.”

The agreement would provide a means of resolving the claims of both states and local governments across the county, including the nearly 4,000 that have filed. Following the agreement, states have thirty days to join the deal and local governments in the participating states will have up to 150 days to join. Maximum payments will be sent to states and their local governments if each state and its local governments join in support of the agreement.

Tennessee will be signing the agreement and reaching out to encourage participation.

If the sign-on threshold is reached, Tennessee could see north of $500 million in funding to fight the opioid crisis.

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.
  • Over two-thirds of the money is required 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 volume of opioids prescribed – as well as the population of the state.

Injunctive Relief Overview:

The 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 the drugs being diverted.
  • Prohibit shipping 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 agreement will result in court orders requiring Johnson & Johnson to:

  • Stop selling opioids for 10 years.
  • 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.

The settlement terms presented was the result of years of advocacy by the entire National Prescription Opioid Litigation (NPOL) Plaintiffs’ Executive Committee (PEC) on behalf of their over 3,000 community clients. Plaintiffs’ Executive Committee, Joe Rice of Motley Rice LLC, Elizabeth Cabraser of Lieff Cabraser, Peter Mougey of Levin Papantonio Rafferty, Paul Geller of Robbins Geller, and Chris Seeger of Seeger Weiss led the team of negotiation.

“Our country’s opioid epidemic is a nationwide public health crisis that requires a nationwide solution. We cannot solve this problem piecemeal. One community cannot begin to recover from the crisis if its neighboring community does not also have resources dedicated to abatement of the epidemic,” PEC negotiation team said. “While these settlements are complex and will take time to implement, they are a pragmatic and efficient way to effect transformative change and reform the way prescription opioids are distributed in the United States while allocating tens of billions of dollars to support critical abatement efforts around our country.”

The settlement comes as a result of investigations by state attorneys general into if the three distributors had fulfilled their legal duty to refuse to ship opioids to pharmacies regarding suspicious drug orders. Johnson & Johnson was also investigated whether misled patients and doctors about the addictive nature of opioids.

Opioid overdose deaths rose to a record of 93,000, which is a 30 percent increase from the previous year, according to the release. In Tennessee, opioid overdoses kill an average of more than five people a day, officials said.

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