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Opioid Distributors to Move Forward With $26 Billion Accord

Opioid Distributors Say Settlement to Proceed to Next Phase

McKesson Corp. and two other opioid distributors agreed Saturday to press ahead with their part of a $26 billion settlement aimed at resolving thousands of state and local government lawsuits over their alleged mishandling of the addictive painkillers.

McKesson, Cardinal Health Inc. and AmerisourceBergen Corp. concluded “enough states have agreed to settle to proceed” to the next step in the accord, which focuses on seeking local governments’ to drop their suits in return for money to beef up policing and drug-treatment budgets, according to a joint release. They said 42 states signed on to the deal, along with five U.S. territories and Washington, D.C.

The announcement didn’t include Johnson & Johnson, which is supposed to kick in another $5 billion to the accord. However, Jake Sargent, a J&J spokesman, said Saturday the company is moving forward with its portion of the settlement.

The settlement marks a major step forward in litigation over the highly-addictive drugs, which have been blamed on more than 500,000 U.S. deaths over two decades. States, cities and counties filed nearly 4,000 suits against more than a dozen drug makers, distributors and pharmacies seeking compensation for billions spent battling the U.S. opioid epidemic.

Still, some states have rejected the $26 billion deal as too low. Washington State Attorney General Robert Ferguson noted the settlement may only provide about $30 million a year over about the next two decades to combat the fallout from the opioid crisis.

Under the terms of the deal, AmerisourceBergen and Cardinal Health said their shares will be $6.4 billion each, while McKesson’s share would be $7.9 billion. Those amount will be paid out over 18 years. J&J will pay its $5 billion portion over nine years. In return, state and local governments will drop their lawsuits.

North Carolina Attorney General Josh Stein -- who helped negotiate the settlement -- urged local governments in his state to sign off on the accord “to maximize the amount of money we receive to address the crisis,” according to a release. Under the terms of the deal, the more local governments in a state that agree to resolve their claims, the higher the total amount designated for that state.

Stein said more than 70 cities and counties have agreed to the offer. North Carolina will need more local government participation to get its full $750 million share, he added. U.S. cities and counties have until Jan. 2, 2022, to decide whether to accept the settlement offer, under the terms of the deal.

Joe Rice, a lawyer representing a host of cities and counties who filed opioid suits, didn’t immediately return a request for comment Saturday on the distributors’ announcement. Many of those cases are consolidated before a federal judge in Cleveland.

The consolidated case is In Re National Prescription Opioid Litigation, 17-md-2804, U.S. District Court, Northern District of Ohio (Cleveland).

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