The 3 largest drug distributors and 1 of the largest pharmaceutical manufacturers in the nation finalized a $26 billion settlement to resolve claims by state and local governments that the companies helped fuel the opioid epidemic.
Opioids are responsible for roughly 75,000 overdose deaths every year in the United States, according to the latest numbers from the Centers for Disease Control and Prevention (CDC).
Let’s take a closer look at the historic settlement and what it means for individuals going forward.
Background on the opioid lawsuits
In 2014, state and local governments and Native American tribes began filing civil lawsuits (about 3,000 in total) against the nation’s 3 largest drug distributors, McKesson Corporation, AmerisourceBergen Corporation, and Cardinal Health Incorporation, and a major pharmaceutical manufacturer, Johnson & Johnson.
The pharmaceutical liability lawsuits alleged that the companies urged doctors to prescribe opioids for minor injuries, such as ankle sprains, while underrepresenting the high risk of addiction. This aggressive marketing, the lawsuits alleged, fueled an epidemic of addiction and cost taxpayers millions of dollars in insurance claims and other health care costs.
Evidence made public during the trial suggests that the companies continued to ship large amounts of pills to communities despite numerous red flags. One email shared among executives at AmerisourceBergen disparaged people addicted to opioids, describing them as “pillbillies” and referring to OxyContin as “hillbilly heroin.”
Learn more about how opioids produce a surge of dopamine and rewire the brain.
What is the doctrine of parens patriae?
The doctrine of parens patriae (Latin for “parent of the nation”) is a doctrine under which a state has standing to file a lawsuit on behalf of a citizen for violations of the citizen’s health and well-being.
Parens patriae lawsuits are filed by the state’s attorney general through the state court system.
The $26 billion settlement
On February 25, 2022, all 4 companies agreed to a $26 billion settlement to resolve the thousands of civil claims filed against them by state and local governments.
None of the companies acknowledged any wrongdoing.
At least 85 percent of the settlement funds will be used for healthcare and drug treatment programs designed to ease the opioid crisis.
What’s more, the companies agreed to participate in a centralized tracking system designed to detect, block and report suspicious opioid orders and share data with state regulators.
“There will be people alive next year because of the programs and services we will be able to fund because of these settlement proceeds,” said North Carolina Attorney General Josh Stein.
The opioid settlement is 2nd only to the $246 billion “Big Tobacco” settlement of the late 1990s in terms of scope and settlement value.
The first checks are expected to go out in April.
What the $26 billion opioid settlement means going forward
By signing onto the deal, state and local governments agreed to drop their opioid lawsuits against the 4 companies and also pledged not to bring any future actions.
There are 6 states that did not fully agree to the settlement. These states can continue to pursue litigation against the companies. The 6 states include:
- Alabama
- New Hampshire
- New Mexico
- Oklahoma
- Washington
- West Virginia
It’s important to note that the $26 billion settlement doesn’t include any funds to compensate families and individual victims of the opioid crisis.
Other drugmakers (including Teva Pharmaceutical Industries), as well as pharmacy chains that sold large quantities of opioid medications directly to consumers, remain in litigation.