Opioid distributors expected to announce settlement to resolve thousands of cases

Business

The Washington Post 20 July, 2021 - 07:47am 26 views

As part of the proposed settlement, companies will agree to share information about their shipments of controlled substances, offering for the first time a full picture of where pain pills are sent.

The agreement, hammered out by a coalition of lawyers representing governments, attorneys general and company lawyers, will still need broad support. At least 44 states, 95% of cities, counties and others suing the companies and 90% of non-litigating jurisdictions must sign on to the deal to receive a portion of the money, according to the sources, who spoke on the condition of anonymity because they were not authorized to speak publicly.

However, the tentative settlement is the closest the protracted legal battle has come to reaching an end.

Settlement talks are still ongoing even as the public announcement is tentatively expected this week. While negotiators had aimed to also release a similar deal with the drugmaker Johnson & Johnson, the discussions with the company have not progressed as far as with the distributors.

Previous reporting indicated that a settlement for the four companies was looming in November 2020, but the sides were further apart at that time than publicly known, the sources said.

One of the points that the attorneys had not resolved until recent months, they said, was that the companies wanted global peace, meaning they wanted to curb future litigation from springing up after reaching a resolution for the ongoing cases. On the other side, cities and counties aimed to increase the amount of money they would be guaranteed.

Litigation has been ongoing for years, and continues across the country. A last-minute deal with two Ohio counties before what would have been the first federal trial in 2019 cost the distributors $215 million. Trials with Cabell County and the city of Huntington in West Virginia and New York state are ongoing.

New York is nearing a $1 billion settlement with the three distributors, according to a source familiar with the negotiations.

Jurisdictions where settlements have been reached or trials are already underway would not be eligible under this deal. In other places, where coronavirus-related delays stalled trials, a day in court could never come if the settlement is agreed upon.

Nationally, pharmacies such as CVS, Walgreens and Walmart are still embroiled in litigation.

From 2006 to 2014, there were more than 100 billion prescription hydrocodone and oxycodone pills distributed in the country. Since 1997, hundreds of thousands have died, and millions more have struggled with opioid abuse. The lawsuits against the companies allege distributors failed to flag and halt a rising tide of suspicious orders of pain pills as communities were inundated.

The companies have denied any wrongdoing. Distributors argue their role was to make sure medicine prescribed by licensed doctors and dispensed by pharmacies were available for patients.

Representatives for McKesson, Johnson & Johnson and AmerisourceBergen did not immediately respond to requests for comment on Monday night. Cardinal Health declined to comment.

In another key part of the deal, companies would pay for a third-party clearinghouse that would share information about their shipments of controlled substances for a decade. The monitor would track all distributors’ data. An oversight panel, made up of members chosen by both settling states and the companies, will select one or more vendors to develop the monitoring system. The data, shared with state authorities, will not be exempt from public record requests, according to the terms of the agreement.

Part of the database maintained by the Drug Enforcement Administration that tracks prescription pill shipments was published by The Washington Post in 2019 after the newspaper and HD Media, which publishes the Charleston Gazette-Mail in West Virginia, won a year-long legal battle for access to the data from court filings.

The companies will also be required to alert state regulators about suspicious orders and customers that were terminated or turned away due to concerns about their controls for controlled substances.

Under the settlement framework, states have a month after a date set by distributors to decide if they will settle, and then the states will notify cities and counties about the deal, allowing jurisdictions four months to choose if they want a slice of the multibillion-dollar pie. States can choose to join after the deadline with the consent of the companies.

To receive the maximum payment, 48 states, 98% of the litigating subdivisions and 97% of jurisdictions that do not have ongoing cases must sign on to the deal, releasing companies from future lawsuits, sources said.

States and local governments that agree to join the settlement cannot file any civil cases against the companies over the opioid crisis. The companies and their executives could still face criminal charges.

Either side could walk away from the deal over the next six months if they aren’t satisfied with the level of participation.

Funds would be split among states with 85% based on their population size and 15% calculated according to factors that highlight the severity of the crisis, such as how many pain pills shipped to the state, how many people become addicted and the overdose death toll.

The annual payments to each state over 18 years would be divvied up among state and local resources, depending on their plans for the funds.

Separately, attorneys’ fees will total more than $1.6 billion over seven years.

The settlement does not bar the companies from deducting some of those costs from their taxes. The companies plan to recoup around $1 billion apiece, The Post previously reported.

The federal opioid litigation is regarded by many as perhaps the most complicated in American legal history — even more costly and far-reaching than the tobacco litigation in the last century. After the 1998 landmark settlement, four tobacco companies were required to pay more than $246 billion over a quarter of a century.

But funds were diverted from smoking prevention programs to cover budget gaps and subsidize taxes.

The opioid settlement specifies funds must be spent on a list of abatement strategies including naloxone and recovery services, as well as opioid use disorder treatments and resources, care for babies with neonatal abstinence syndrome and preventive measures for overprescribing and misuse.

Money cannot be diverted for other purposes. If it is, that must be publicly disclosed, according to the sources familiar with the settlement framework.

The total settlement is only a fraction of the cost of the opioid epidemic.

The opioid epidemic is estimated to have cost the U.S. more than $1 trillion from 2001 to 2017, according to Altarum, a nonprofit group that studies health economy, in an analysis of the Centers for Disease Control mortality rate.

Read full article at The Washington Post

US States To Unveil $26 Billion Opioid Settlement With Drug Distributors, J&J: Sources

Moneycontrol 19 July, 2021 - 10:23pm

You are using an outdated browser. Please upgrade your browser to improve your experience and security.

Fundamental, Stock Ideas, Multibaggers & Insights

Stock & Index F&O Trading Calls & Market Analysis

Positional and Intraday Trading Calls basis Noiseless Chart

Technical Call, Trading Calls & Insights

Commodity Trading Calls & Market Analysis

Currency Derivatives Trading Calls & Insights

Options Trading Advice and Market Analysis

Model portfolios, Investment Ideas, Guru Screens and Much More

Proprietary system driven Rule Based Trading calls

Curated markets data, exclusive trading recommendations, Independent equity analysis & actionable investment ideas

Details stock report and investment recommendation

Set price, volume and news alerts

Distributors McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp would pay a combined $21 billion, while Johnson & Johnson would pay $5 billion. New York on Tuesday is expected to announce the distributors have agreed to a $1 billion-plus settlement with the state, a source said.

The ultimate settlement pricetag could fluctuate depending on the number of states and political subdivisions that agree to the deal or reject it and pursue litigation on their own in hopes of a bigger payout down the line.

More than 40 states are expected to support the nationwide settlement, two sources said. States will have 30 days to decide whether to join the global accord then more time to try to convince their cities and counties to participate in the deal, the sources said.

McKesson has previously said that of the $21 billion the three distributors would pay over 18 years, more than 90% would be used to remediate the opioid crisis while the rest, about $2 billion, would be used to pay plaintiffs’ attorney fees and costs.

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

The financial terms are in line with prior disclosures by the three distributors and J&J about what they expected to have to pay following long-running settlement talks.

”There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need,” J&J said in a statement.

McKesson and Cardinal Health had no comment while AmerisourceBergen said it does not comment on ”rumor and speculation.” They have all previously denied wrongdoing.

Nearly 500,000 people died from opioid overdoses in the United States from 1999 to 2019, according to the U.S. Centers for Disease Control and Prevention (CDC). The opioid crisis appeared to worsen during the COVID-19 pandemic.

The CDC last week said provisional data showed that 2020 was a record year for drug overdose deaths with 93,331, up 29% from a year earlier. Opioids were involved in 74.7%, or 69,710, of those overdose deaths.

The distributors were accused of lax controls that allowed massive amounts of addictive painkillers to be diverted into illegal channels, devastating communities, while J&J was accused of downplaying the addiction risk.

Governments have said the money will be used to fund addiction treatment, family support programs, education and other health initiatives to address the crisis.

Other settlements are also being negotiated, with the opioid makers Purdue Pharma and Mallinckrodt Plc now working through the bankruptcy courts to secure support for settlements worth more than $10 billion and $1.6 billion, respectively.

The distributors have been in the midst of two trials nationally in the litigation, one in New York and one in West Virginia. They have now agreed to resolve the New York case, a person briefed on the matter said.

The deal with New York Attorney General Letitia James and the populous Long Island counties of Nassau and Suffolk comes three weeks into the first jury trial accusing companies of profiting from a flood of addictive painkillers that devastated communities.

Closing arguments are expected in the West Virginia trial next week. Local West Virginia communities had opted out of the proposed nationwide deal to pursue one on their own.

Opioid Settlement of $26 Billion Between Drug Companies, States Expected This Week

The Wall Street Journal 19 July, 2021 - 08:44pm

Drug distributors AmerisourceBergen Corp. , Cardinal Health Inc. and McKesson Corp. and manufacturer Johnson & Johnson have been negotiating the $26 billion settlement for more than two years as a way to resolve thousands of lawsuits filed by state and local governments blaming them for helping fuel the nation’s opioid epidemic. From 1999 to 2019, the nation lost nearly half a million people to overdoses of prescription and illegal opioids, according to federal data.

Under the contours of the deal, states and municipalities still have several months to sign on, and the amount ultimately paid will depend on how many participate, the people familiar with the talks said. The companies can also still walk away if they aren’t satisfied with the number of states and governments that join, the people said.

New York, meanwhile, has struck a more than $1 billion deal with AmerisourceBergen, Cardinal and McKesson midway through a trial against those companies and four other pharmaceutical firms, some of the people said. That deal, which is expected to be announced Tuesday, would remove the three distributors from the trial and represents New York’s portion of the broader settlement.

Johnson & Johnson already settled with New York for $263 million ahead of the trial.

You will be charged $ + tax (if applicable) for The Wall Street Journal. You may change your billing preferences at any time in the Customer Center or call Customer Service. You will be notified in advance of any changes in rate or terms. You may cancel your subscription at anytime by calling Customer Service.

Please click confirm to resume now.

UPDATE 4-U.S. states to unveil $26 billion opioid settlement with drug distributors, J&J - sources

Yahoo Finance 19 July, 2021 - 06:43pm

July 19 (Reuters) - U.S. state attorneys general are expected this week to unveil a $26 billion settlement resolving claims that three major drug distributors and drugmaker Johnson & Johnson helped fuel a nationwide opioid epidemic, people familiar with the matter said on Monday.

Distributors McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp would pay a combined $21 billion, while Johnson & Johnson would pay $5 billion. New York on Tuesday is expected to announce the distributors have agreed to a $1 billion-plus settlement with the state, a source said.

The ultimate settlement pricetag could fluctuate depending on the number of states and political subdivisions that agree to the deal or reject it and pursue litigation on their own in hopes of a bigger payout down the line.

More than 40 states are expected to support the nationwide settlement, two sources said. States will have 30 days to decide whether to join the global accord then more time to try to convince their cities and counties to participate in the deal, the sources said.

McKesson has previously said that of the $21 billion the three distributors would pay over 18 years, more than 90% would be used to remediate the opioid crisis while the rest, about $2 billion, would be used to pay plaintiffs' attorney fees and costs.

Several states have passed laws or reached agreements with their political subdivisions to govern how settlement proceeds would be allocated in the event of a nationwide settlement.

The financial terms are in line with prior disclosures by the three distributors and J&J about what they expected to have to pay following long-running settlement talks.

"There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need," J&J said in a statement.

McKesson and Cardinal Health had no comment while AmerisourceBergen said it does not comment on "rumor and speculation." They have all previously denied wrongdoing.

Nearly 500,000 people died from opioid overdoses in the United States from 1999 to 2019, according to the U.S. Centers for Disease Control and Prevention (CDC). The opioid crisis appeared to worsen during the COVID-19 pandemic.

The CDC last week said provisional data showed that 2020 was a record year for drug overdose deaths with 93,331, up 29% from a year earlier. Opioids were involved in 74.7%, or 69,710, of those overdose deaths.

The distributors were accused of lax controls that allowed massive amounts of addictive painkillers to be diverted into illegal channels, devastating communities, while J&J was accused of downplaying the addiction risk.

Governments have said the money will be used to fund addiction treatment, family support programs, education and other health initiatives to address the crisis.

Other settlements are also being negotiated, with the opioid makers Purdue Pharma and Mallinckrodt Plc now working through the bankruptcy courts to secure support for settlements worth more than $10 billion and $1.6 billion, respectively.

The distributors have been in the midst of two trials nationally in the litigation, one in New York and one in West Virginia. They have now agreed to resolve the New York case, a person briefed on the matter said.

The deal with New York Attorney General Letitia James and the populous Long Island counties of Nassau and Suffolk comes three weeks into the first jury trial accusing companies of profiting from a flood of addictive painkillers that devastated communities.

Closing arguments are expected in the West Virginia trial next week. Local West Virginia communities had opted out of the proposed nationwide deal to pursue one on their own.

The New York trial will continue against three drugmakers accused of deceptively marketing their painkillers - Endo International Plc, Teva Pharmaceutical Industries Ltd and AbbVie Inc's Allergan unit. (Reporting by Nate Raymond in Boston; Editing by Sandra Maler, Bill Berkot and Cynthia Osterman)

(Reuters) -U.S. state attorneys general are expected this week to unveil a $26 billion settlement resolving claims that three major drug distributors and drugmaker Johnson & Johnson helped fuel a nationwide opioid epidemic, people familiar with the matter said on Monday. Distributors McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp would pay a combined $21 billion, while Johnson & Johnson would pay $5 billion. New York on Tuesday is expected to announce the distributors have agreed to a $1 billion-plus settlement with the state, a source said.

Hopes for an industrial recovery lifted the conglomerate's stock, but expectations appear to be waning.

The top U.S. financial regulators convened on Monday to expand discussions on a regulatory framework for stablecoins.

Safe-harbour currencies like the yen and dollar traded near multi-month highs against the riskier Australian dollar and British pound on Tuesday, as fears grow that a rampant coronavirus variant could upend the global economic recovery. The yen traded at 80.09 per Aussie dollar, close to the more-than-five-month high of 80.05 touched on Monday. The Aussie accelerated declines as minutes of the Reserve Bank of Australia's policy meeting this month were seen by some economists as a sign the central bank may reverse a decision to taper stimulus.

(Reuters) -Afterpay Ltd will launch its banking app in October to widen its offerings beyond buy now, pay later (BNPL) services for its 3.5 million-plus Australian users as competition intensifies, the company said on Tuesday. The move by Afterpay into banking will test the reach of its relationship with users after a year of explosive growth that saw more people choose to pay in instalments for everyday items during the pandemic. Afterpay hopes those same users will now be willing to deposit their salaries in saving accounts created in partnership with Australia's No.2 lender, Westpac Banking Corp, earning interests of 1% per year.

Adagio Therapeutics has filed an initial public offering to raise money to bring its COVID-19 antibody to market. The $100 million IPO will support Phase 2/3 trials that CEO Tillman Gerngross’ Adagio is running to position ADG20 to treat and prevent COVID-19. Adimab-spinout Adagio has succeeded in attracting investor support for its anti-SARS-CoV-2 antibody even as rival assets have come to market and vaccines have curbed the crisis in some countries. In April, the Company raised a $336 million

Oil Search rejected an unsolicited takeover proposal from Santos Ltd valuing the Papua New Guinea-focused oil and gas producer at A$8.8 billion ($6.5 billion), but both companies said on Tuesday they wanted to pursue further talks. Oil Search said the offer was not in the best interests of shareholders, but its shares rose 8% after both companies said it made sense to create a group that would rival Australia's top independent gas producer Woodside Petroleum in market value. "Oil Search agrees with Santos that there is strategic logic in a combination of the two companies," Oil Search said in a statement, but added that Santos had yet to come back with a fair offer.

Shares in Ardelyx Inc. plummeted more than 70% in after-hours trading Monday, following the biopharmaceutical company's announcement that the Food and Drug Administration appears unlikely to approve a drug for dialysis patients. Ardelyx revealed that it received a letter from the FDA stating that deficiencies in the information provided had been found that would preclude discussion of approvals Ardelyx has sought. When Ardelyx sought a meeting with the FDA to discuss the deficiencies, the reques

Shares of biotech company Ocugen (NASDAQ: OCGN) jumped nearly 13% today as the latest COVID figures show a significant rise in cases, hospitalizations, and deaths -- especially among the unvaccinated. Over the last two weeks, COVID cases are up 140%, while hospitalizations and deaths are up by one-third. Ocugen has partnered with Bharat Biotech, the company responsible for Covaxin, the first COVID vaccine developed in India to receive emergency authorization.

Shares of small biotech Cytokinetics rocketed by as much as 60% Monday morning, on the results from a study of the firm's investigational drug for heart failure.

More and more, we're hearing about people catching coronavirus after being fully vaccinated, a troubling development in the pandemic. However, Dr. Anthony Fauci, the chief medical advisor to the President and the director of the National Institute of Allergy and Infectious Diseases, said they were to be expected yesterday on CNN. Read on for five latest developments, and to ensure your health and the health of others, don't miss these Sure Signs You Have "Long" COVID and May Not Even Know It. 1

After weeks of steady decline, COVID-19 case numbers are headed back in the wrong direction once again. The spread of the highly contagious Delta is currently fueling a nationwide surge, with all 50 states and Washington, D.C., reporting a rise in cases and 38 seeing an increase of 50 percent or more over the past week, CNN reports. Fortunately, studies have shown that those who are fully vaccinated are still well protected against the virus. But according to one former official, there's one oth

Just when we thought that COVID was starting to fade, the Delta variant has come our way. Is this the dreaded vaccine-resistant wave that will put economies back into lockdown? So far, at least, that doesn’t appear so – while this variant has shown the ability to infect people who are fully vaccinated, the vaccines have also shown efficacy in preventing serious illness, even from the Delta variant. What we’re looking at is an increase in cases, but a decrease in serious hospitalizations. Taking

(Bloomberg) -- A summer resurgence of the pandemic stoked by the spread of the delta variant is raising alarms, sparking a global stocks selloff. The U.S. warned citizens against travel to the U.K. and Indonesia amid rising infections in the two nations. Apple Inc. is pushing back its return-to-office deadline because of the resurgence across many countries, people familiar with the matter said. More executives of Japanese companies are skipping Friday’s opening ceremony for the Tokyo Olympics a

Clover Health CEO Vivek Garipalli addresses criticisms surrounding hospitals he operated in New Jersey in an interview with Yahoo Finance.

Shares of Cytokinetics (NASDAQ: CYTK) are up 48.4% as of 12:00 p.m. EDT on Monday. Investors were caught off guard by some encouraging results from a clinical trial with CK-274, a potential new treatment for hypertrophic cardiomyopathy (HCM). Patients with HCM have heart muscle that becomes thicker, which can cause it to pump with too much force.

A man in China has died after contracting a rare infectious disease from primates, known as the Monkey B virus, Chinese health officials revealed in a report Saturday. The victim, a 53-year-old veterinarian based in Beijing, was the first documented human case of the virus in China. According to the Chinese Center for Disease Control and Prevention, the man worked in a research institute that specialized in nonhuman primate breeding and dissected two dead monkeys in March. He experienced nausea,

MOUNTAIN HOME, Ark. — When the boat factory in this leafy Ozark Mountains city offered free coronavirus vaccinations this spring, Susan Johnson, 62, a receptionist there, declined the offer, figuring she was protected as long as she never left her house without a mask. Linda Marion, 68, a widow with chronic pulmonary disease, worried that a vaccination might actually trigger COVID-19 and kill her. Barbara Billigmeier, 74, an avid golfer who retired here from California, believed she did not need

U.S. states to unveil $26 billion opioid settlement with drug distributors, J&J - sources

Reuters 19 July, 2021 - 06:28pm

July 19 (Reuters) - U.S. state attorneys general are expected this week to unveil a $26 billion settlement resolving claims that three major drug distributors and drugmaker Johnson & Johnson helped fuel a nationwide opioid epidemic, people familiar with the matter said on Monday.

Distributors McKesson Corp (MCK.N), Cardinal Health Inc (CAH.N) and AmerisourceBergen Corp (ABC.N) would pay a combined $21 billion, while Johnson & Johnson (JNJ.N) would pay $5 billion. New York on Tuesday is expected to announce the distributors have agreed to a $1 billion-plus settlement with the state, a source said.

The ultimate settlement pricetag could fluctuate depending on the number of states and political subdivisions that agree to the deal or reject it and pursue litigation on their own in hopes of a bigger payout down the line.

More than 40 states are expected to support the nationwide settlement, two sources said. States will have 30 days to decide whether to join the global accord then more time to try to convince their cities and counties to participate in the deal, the sources said.

McKesson has previously said that of the $21 billion the three distributors would pay over 18 years, more than 90% would be used to remediate the opioid crisis while the rest, about $2 billion, would be used to pay plaintiffs' attorney fees and costs.

Several states have passed laws or reached agreements with their political subdivisions to govern how settlement proceeds would be allocated in the event of a nationwide settlement.

The financial terms are in line with prior disclosures by the three distributors and J&J about what they expected to have to pay following long-running settlement talks.

"There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need," J&J said in a statement.

McKesson and Cardinal Health had no comment while AmerisourceBergen said it does not comment on "rumor and speculation." They have all previously denied wrongdoing.

Nearly 500,000 people died from opioid overdoses in the United States from 1999 to 2019, according to the U.S. Centers for Disease Control and Prevention (CDC). The opioid crisis appeared to worsen during the COVID-19 pandemic.

The CDC last week said provisional data showed that 2020 was a record year for drug overdose deaths with 93,331, up 29% from a year earlier. Opioids were involved in 74.7%, or 69,710, of those overdose deaths.

The distributors were accused of lax controls that allowed massive amounts of addictive painkillers to be diverted into illegal channels, devastating communities, while J&J was accused of downplaying the addiction risk.

Governments have said the money will be used to fund addiction treatment, family support programs, education and other health initiatives to address the crisis.

Other settlements are also being negotiated, with the opioid makers Purdue Pharma and Mallinckrodt Plc (MCDG.MU) now working through the bankruptcy courts to secure support for settlements worth more than $10 billion and $1.6 billion, respectively.

The distributors have been in the midst of two trials nationally in the litigation, one in New York and one in West Virginia. They have now agreed to resolve the New York case, a person briefed on the matter said.

The deal with New York Attorney General Letitia James and the populous Long Island counties of Nassau and Suffolk comes three weeks into the first jury trial accusing companies of profiting from a flood of addictive painkillers that devastated communities.

Closing arguments are expected in the West Virginia trial next week. Local West Virginia communities had opted out of the proposed nationwide deal to pursue one on their own.

The New York trial will continue against three drugmakers accused of deceptively marketing their painkillers - Endo International Plc (ENDP.O), Teva Pharmaceutical Industries Ltd (TEVA.TA) and AbbVie Inc's (ABBV.N) Allergan unit.

Our Standards: The Thomson Reuters Trust Principles.

The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.

The industry leader for online information for tax, accounting and finance professionals.

Information, analytics and exclusive news on financial markets - delivered in an intuitive desktop and mobile interface.

Access to real-time, reference, and non-real time data in the cloud to power your enterprise.

Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.

All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.

© 2021 Reuters. All rights reserved

US states to unveil $26 billion opioid settlement with drug distributors, J&J

KSL.com 19 July, 2021 - 12:00am

Distributors McKesson, Cardinal Health and AmerisourceBergen would pay a combined $21 billion, while Johnson & Johnson would pay $5 billion. New York on Tuesday is expected to announce the distributors have agreed to a $1 billion-plus settlement with the state, a source said.

The ultimate settlement price tag could fluctuate depending on the number of states and political subdivisions that agree to the deal or reject it and pursue litigation on their own in hopes of a bigger payout down the line.

More than 40 states are expected to support the nationwide settlement, two sources said. States will have 30 days to decide whether to join the global accord with more time to try to convince their cities and counties to participate in the deal, the sources said.

McKesson has previously said that of the $21 billion the three distributors would pay over 18 years, more than 90% would be used to remediate the opioid crisis while the rest, about $2 billion, would be used to pay plaintiffs' attorney fees and costs.

Several states have passed laws or reached agreements with their political subdivisions to govern how settlement proceeds would be allocated in the event of a nationwide settlement.

The financial terms are in line with prior disclosures by the three distributors and J&J about what they expected to have to pay following long-running settlement talks.

"There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need," J&J said in a statement.

McKesson and Cardinal Health had no comment while AmerisourceBergen said it does not comment on "rumor and speculation." They have all previously denied wrongdoing.

Nearly 500,000 people died from opioid overdoses in the United States from 1999 to 2019, according to the U.S. Centers for Disease Control and Prevention. The opioid crisis appeared to worsen during the COVID-19 pandemic.

The CDC last week said provisional data showed that 2020 was a record year for drug overdose deaths with 93,331, up 29% from a year earlier. Opioids were involved in 74.7%, or 69,710, of those overdose deaths.

The distributors were accused of lax controls that allowed massive amounts of addictive painkillers to be diverted into illegal channels, devastating communities, while J&J was accused of downplaying the addiction risk.

Governments have said the money will be used to fund addiction treatment, family support programs, education and other health initiatives to address the crisis.

Other settlements are also being negotiated, with the opioid makers Purdue Pharma and Mallinckrodt now working through the bankruptcy courts to secure support for settlements worth more than $10 billion and $1.6 billion, respectively.

The distributors have been in the midst of two trials nationally in the litigation, one in New York and one in West Virginia. They have now agreed to resolve the New York case, a person briefed on the matter said.

The deal with New York Attorney General Letitia James and the populous Long Island counties of Nassau and Suffolk comes three weeks into the first jury trial accusing companies of profiting from a flood of addictive painkillers that devastated communities.

Closing arguments are expected in the West Virginia trial next week. Local West Virginia communities had opted out of the proposed nationwide deal to pursue one on their own.

The New York trial will continue against three drugmakers accused of deceptively marketing their painkillers - Endo International, Teva Pharmaceutical Industries and AbbVie's Allergan unit.

Business Stories