Drug companies move forward on $26B opioid deal

Johnson & Johnson’s Janssen Pharmaceuticals and three other drug companies have agreed to move forward on a $26 billion global opioid settlement, the second largest multistate agreement in U.S. history.

The deal, announced July 21, was contingent on a certain percentage of states, cities and counties participating. Today was the deadline for the defendants to decide whether the participation rate was enough to resolve the vast majority of more than 4,000 opioid claims brought by governments across the country.

In a statement Friday, the negotiating team on the plaintiffs’ executive committee in the opioid multidistrict litigation, which consists primarily of lawsuits brought by cities and counties, said that more than 90% of local governments agreed to the deal and that nearly 40 states had reached 100% participation.

The team predicted the first round of funding to arrive in May, with additional funds available by July.

“The bottom line from this news is that help is on the way for first responders and healthcare workers on the front lines of this public health crisis,” wrote negotiating team members Elizabeth Cabraser of Lieff Cabraser Heimann & Bernstein; Jayne Conroy of Simmons Hanly Conroy; Paul Geller of Robbins Geller Rudman & Dowd; Peter Mougey of Levin, Papantonio, Rafferty, Proctor, Buchanan, O’Brien, Barr & Mougey in Pensacola, Florida; Joe Rice of Motley Rice; and Jennifer Scullion and Chris Seeger of Seeger Weiss.

“While nothing can truly make whole what was lost in this country, what we can do is ensure that thousands of communities nationwide have the tools they need to prevent the opioid epidemic from taking more lives,” they wrote. “We hope this agreement does exactly that.”

Opiate distributors AmerisourceBergen Drug Corp., McKesson Corp. and Cardinal Health Inc., which reached an agreement with 46 states, said they are moving forward with their $21 billion portion of the deal.

“While the companies continue to strongly dispute the allegations made against them, they believe that the implementation of this settlement is a key milestone toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities across the United States that have been impacted by the opioid epidemic,” the three companies said in a joint statement.

AmerisourceBergen spokeswoman Lauren Esposito added in a separate statement: “The years of legal actions leading up to this point have shown time and time again that pharmaceutical distributors must walk a legal and ethical tightrope between providing access to necessary medications and acting to prevent diversion of controlled substances.”

Johnson & Johnson also gave the green light to its $5 billion agreement, which got the support of 45 states. Johnson & Johnson, in a statement, said the company reached separate settlements with the states of New York, Texas, Nevada and New Mexico.

“This settlement agreement is not an admission of any liability or wrongdoing, and the company will continue to defend against any litigation that this final settlement agreement does not resolve,” Johnson & Johnson said. “The company no longer sells prescription opioid medications in the United States as part of our ongoing efforts to focus on transformational innovation and serving unmet patient needs.”

In recent months, many states reached “intrastate allocation agreements,” or passed legislation, to obtain full participation from their local governments. The settlements require that 85% of the funds go toward programs to address the opioid crisis through treatment, education and prevention, but officials in some cities and counties, many of which filed their own lawsuits, had concerns that too many funds would end up in state coffers.

According to the distributors, the states of Washington, Oklahoma and Alabama did not agree to the global deal. The state of West Virginia previously settled with the three distributors, and its cities and counties, two of which are in the midst of a bench trial against the distributors, elected not to participate. The global deal also excludes several other defendants, particularly other manufacturers and pharmacies, which lost a Nov. 23 jury verdict in Cleveland. Nor does the deal involve the Native American tribes, which struck a separate $590 million settlement with the same four drug companies earlier this month.

On Friday, many states announced the amount of money they would get. California, which got support from 56 eligible counties and 96% of its cities, expected to get $2 billion.

“We are another step closer to bringing billions of dollars in relief to California to help fight the opioid crisis,” said California Attorney General Rob Bonta. Los Angeles City Attorney Mike Feuer said his city would get tens of millions of dollars.

Connecticut announced approximately $300 million, and the District of Columbia plans to receive $47 million.

“This is a public health crisis and a social justice issue,” said District of Columbia Attorney General Karl Racine. “With today’s landmark announcement, more residents who are struggling with opioid abuse and addiction will get needed support, and more preventive programs will be put in place for those who are at-risk.”

The finalized agreement sets the stage for a potentially protracted fight among lawyers over $2 billion in estimated legal fees that are part of the $26 billion deal. On Friday, U.S. District Judge Dan Polster of the Northern District of Ohio, who is overseeing the multidistrict litigation, appointed three attorneys to a fee committee that would audit requests for fees and costs: Conroy, Rice and Paul Farrell, of Farrell and Fuller, who is also on the plaintiffs’ executive committee, and Peter Weinberger, Spangenberg Shibley & Liber, liaison counsel in the multidistrict litigation. The committee would consult with a fee panel, as outlined in the settlement agreements. Polster previously appointed special master David Cohen and two arbitrators, Randi Ellis and David Herndon, on the fee panel, which will award both contingency fees and common benefit fees.