Michigan expected to receive up to nearly $800 million in proposed national opioid settlement

Michigan Attorney General Dana Nessel and state attorneys general across the country Wednesday revealed the details of a proposed multibillion-dollar national opioid settlement with Johnson & Johnson and the three largest pharmaceutical distributors in the country: Cardinal Health, McKesson, and AmerisourceBergen. The attorneys general have been engaged in ongoing efforts to hold these companies responsible for their roles in contributing to the opioid epidemic gripping this country.
The historic agreement would resolve the claims of both state and local governments across the country, including the nearly 4,000 that have filed lawsuits in federal and state courts. The agreement also requires significant industry changes that will help prevent this type of crisis from ever happening again.

Depending on the allocation metrics and participation of local units of government, Michigan stands to receive up to nearly $800 million from these defendants over the life of the settlement. Only the 1998 national tobacco settlement has involved more dollars than this proposed settlement.

Since taking office, Nessel has focused on combatting the opioid epidemic and holding accountable those responsible for creating and fueling the crisis. Most recently, in February, Nessel joined a bipartisan coalition of attorneys general to secure a $573 million settlement with one of the world’s largest consulting firms, McKinsey & Co. Michigan is on the receiving end of $19.5 million in that settlement. Michigan has already received approximately $16 million of this money.

Additionally, Michigan became the first state in the country to sue major opioid distributors as drug dealers under Nessel’s leadership in December 2019. That case remains in active litigation. However, the historic settlement announced Wednesday
would resolve the claims against three of the four defendants in the case. The litigation against Walgreens will continue.

“When I ran for attorney general, I made a commitment to do everything possible to assist our state residents whose lives have been torn apart by the opioid epidemic. I am thrilled to be delivering on that promise,” Nessel said. “This historic settlement will help save lives and further combat the ongoing crisis, while also ensuring those who created this catastrophe pay for our collective recovery. For far too long, local communities have carried the burden of fighting against the opioid epidemic and felt those in a position to advocate for them weren’t listening. This settlement will bring much-needed financial support for ongoing intervention, services and treatment efforts statewide, and eventual healing for Michigan families.”

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 funding has been determined by agreement among the states using a formula that takes into account the population of the state along with the impact of the crisis on the state – the number of overdose deaths, the number of residents with substance use disorder, and the number of opioids prescribed. 

Injunctive Relief Overview:

• Requires Cardinal, McKesson, and AmerisourceBergen, through court orders, 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.

• Requires Johnson & Johnson, through court orders, 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.

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.

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.

The agreement in principle was reached by all parties in October of 2019 and the parties have been working on the particulars of the settlement since then.  Under the arrangement, the states will have 30 days to review the documents and then make a sign-on decision. After that, local units of government will have 150 days to do the same.

In addition to her legal actions against companies, Nessel serves on the Michigan Opioids Task Force. The group released its 2020 Annual Report in May, which noted opioid overdoses killed 1,768 Michiganders in 2019 – an average of almost five people every single day.

Anyone in need of opioid addiction treatment can find resources to help at www.michigan.gov/opioids.




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