Drug distributors, J&J to pay $590 million to settle U.S. tribes' opioid claims

Drug distributors, J&J to pay $590 mln to settle U.S. tribes’ opioid claims

February 1, 2022; 12:15 PM EST (Updated 1:27 PM EST)

(Reuters) – The three largest U.S. drug distributors and drugmaker Johnson & Johnson (JNJ.N) have agreed to pay $590 million to resolve claims by Native American tribes that the companies fueled an opioid epidemic in their communities, according to court filings.

Tuesday’s deal came after the distributors, McKesson Corp (MCK.N), AmerisourceBergen Corp (ABC.N) and Cardinal Health Inc (CAH.N), along with J&J last year proposed paying up to $26 billion to resolve similar claims by states and local governments.

That proposed settlement, though, did not resolve lawsuits and potential claims by the country’s 574 federally recognized Native American tribes and Alaska Native villages, which experienced higher rates of opioid overdoses compared to other communities.

Under Tuesday’s settlement, the three distributors will pay nearly $440 million over seven years. That is on top of the $75 million they agreed in September to pay the Cherokee Nation in the first settlement with a tribe. read more

J&J agreed to pay $150 million over two years, according to a court filing in federal court in Cleveland, Ohio. J&J said the money will be deducted from its $5 billion portion of the bigger $26 billion settlement.

J&J said it did not admit wrongdoing in the settlement and that its actions promoting prescription opioid pain medications were “appropriate and responsible.”

The Johnson & Johnson logo is displayed on a screen on the floor of the New York Stock Exchange. REUTERS/Brendan McDermid

The distributors did not respond to requests for comment. They have denied wrongdoing.

More than 3,300 lawsuits have been filed largely by state, local and tribal governments seeking to hold those and other companies responsible for an opioid abuse epidemic that led to hundreds of thousands of U.S. overdose deaths over the last two decades.

The lawsuits accuse the distributors of lax controls that allowed massive amounts of addictive painkillers to be diverted into illegal channels, and drugmakers including J&J of downplaying the addiction risk in their opioid marketing.

At least 85% of the funds from Tuesday’s settlement must be used to help address the epidemic by funding treatment or other services, said Geoffrey Stommer, a lawyer representing tribes.

For the Jamestown S’Klallam Tribe in Washington state, any money the 550-citizen tribe receives will go toward a $17 million treatment center it is building, said Ron Allen, the tribal chairman.

“The opiate and substance abuse issues, along with alcoholism, have been very problematic for all of us,” he said.

Tuesday’s deal came a week after the bigger $26 billion settlement reached a crucial milestone, as most eligible local governments in participating states agreed to join the deal. Five states have not settled with some or all of the four companies. read more

A federal judge in West Virginia is considering whether to hold the distributors liable for fueling the epidemic in communities in that state, and the three companies are in the midst of a $95 billion trial in Washington state. read more

Reporting by Nate Raymond in Boston; Editing by Bill Berkrot

Our Standards: The Thomson Reuters Trust Principles.

Reuters source:

https://www.reuters.com/business/healthcare-pharmaceuticals/drug-distributors-jj-pay-590-mln-settle-us-tribes-opioid-claims-2022-02-01