New York to receive $1.1 billion in opioid epidemic settlement

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Three of the nation’s largest drug distributors have agreed to pay up to $1.1 billion to New York state to combat the ongoing opioid epidemic.

McKesson Corp., Cardinal Health Inc. and Amerisource Bergen Drug Corp. have resolved claims made by New York Attorney General Letitia James for the companies’ role in fueling the opioid epidemic. As a result, the three companies will be removed from New York’s ongoing opioid trail that is underway in Suffolk County State Supreme Court, the attorney general’s office said Tuesday.

The $1.1 billion agreement is the largest monetary settlement ever negotiated by Attorney General James.

“For more than two decades, the opioid epidemic has wreaked havoc on countless communities throughout New York and across the rest of the nation, killing hundreds of thousands of our friends and family members and addicting millions more,” James said in a statement. “And over the course of these past two decades, McKesson, Cardinal Health and Amerisource Bergen distributed these opioids without regard to the national crisis they were helping to fuel. But today, we’re holding them accountable and delivering more than $1 billion more into New York communities ravaged by opioids for treatment, recovery and prevention efforts — bringing the statewide total our office has negotiated in the last month alone to more than $1.6 billion. While no amount of money will ever compensate for the millions of addictions, the hundreds of thousands of deaths or the countless communities decimated by opioids, this money will be vital in preventing any future devastation.”

James in March 2019 filed an extensive lawsuit to hold various manufacturers and distributors accountable for the opioid epidemic. The manufacturers named in the complaint included Purdue Pharma and its affiliates, as well as members of the Sackler Family (owners of Purdue) and trusts they control; Janssen Pharmaceuticals and its affiliates (including its parent company Johnson & Johnson); Mallinckrodt LLC and its affiliates; Endo Health Solutions and its affiliates; Teva Pharmaceuticals USA Inc. and its affiliates; and Allergan Finance LLC and its affiliates. The distributors named in the complaint were McKesson, Cardinal Health, Amerisource Bergen and Rochester Drug Cooperative Inc.

The cases against Mallinckrodt and Rochester Drug Cooperative are moving separately through U.S. Bankruptcy Court. The case against Purdue and the Sacklers also is moving through U.S. Bankruptcy Court. Earlier this month however, James and a majority of states said they had approved an agreement that would force the Sacklers and entities they control to pay more than $4.5 billion for opioid abatement, as well as shut down Purdue and ban the Sacklers from ever selling opioids again. The agreement is pending court approval.

Last month, James announced an agreement with Johnson & Johnson that removed the company from New York’s opioid trial in exchange for up to $230 million for the state’s opioid prevention and treatment efforts, as well as it ending the sale of opioids nationwide.

The trial against the three remaining defendants — Endo Health Solutions, Teva Pharmaceuticals USA and Allergan Finance — is underway and will continue in state court.

As part of Tuesday’s agreement, McKesson, Cardinal Health and Amerisource Bergen will begin payments to the state in two months and will continue over the course of the next 17 years. The majority of the $1.1 billion payment will be a guaranteed base payment, with the remaining funds earmarked as incentive payments that will bar, resolve or release current and future subdivision litigation, the attorney general’s office said. In other words, the greater the level of participation from political subdivisions statewide, the more funds that ultimately will be paid out for abatement to the state and local communities over the 18 years.

In February, Attorney General James co-led a coalition of nearly every AG nationwide to deliver more than $573 million, including $32 million for New York state, toward opioid treatment and abatement in an agreement and consent judgment with McKinsey & Co. The agreement with one of the world’s largest consulting firms resolved investigations by the attorneys general into the company’s role in working for opioid companies, helping those firms promote their drugs and profiting from the opioid epidemic.

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