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Billion Dollar Proposed Drug Settlement

In the middle of the month of October, four State Attorneys General proposed a $48 billion global settlement between states, cities, counties, and prominent drug companies accused of not only causing but maintaining and profiting from the opioid crisis in America. Read More

assorted pills and a gavel

In the middle of the month of October, four State Attorneys General proposed a $48 billion global settlement between states, cities, counties, and prominent drug companies accused of not only causing but maintaining and profiting from the opioid crisis in America. This announcement arrived after a settlement in Ohio on Monday, October 21st, where the state’s AG’s reached a settlement of $250 million with drug firms and two heavily populated counties in Ohio. The proposed framework the four AG’s have announced would make Johnson & Johnson, Cardinal Health, McKesson, AmersourceBergen, and Teva responsible for paying state and local governments $48 billion in cash and products. With the numerous cases filed across the country reaching over 2,000, this proposal is an attempt to consolidate and focus the effort in holding major drug companies responsible. The four Attorneys General who made this announcement are John Stein of North Carolina, Josh Shapiro of Pennsylvania, Herbert Slattery of Kentucky, and Ken Paxton of Texas. Stein and Shapiro are Democrats while Slattery and Paxton are Republicans. Stein said in interviews that “we are going to burn the midnight oil to get a settlement document.”

Paul Hanly, a lawyer representing the cases against the drug companies, says that $48 billion is not enough and that the proposed deal does not “work for his clients.” Hanly told NBC News that “cities and counties rejected a deal that would have given them $18 billion over 18 years. When lawyers for the plaintiffs ran the numbers on that proposed settlement, they found New York City would only have received $5 million to $6 million a year, even though it spent $500 million a year on the crisis.” New York only being one example, as many other cities would also face discrepancies. Monday’s proposal includes $22 billion in cash and $26 billion in treatments and drugs over the course of 10 years, a more promising timeline then the proposal Hanly addressed. Hanly believes the proposal will go through another 3 to 6 months of negotiations, but he still believes that the payout is too low. However, Hanly did not express what he believes to be an adequate amount.

On Monday Johnson & Johnson, Cardinal Health, McKesson, AmersourceBergen, and Teva avoided going to trial by agreeing to pay the $250 million settlement, though a fifth defendant, Walgreens Boots Alliance, has not announced an agreement. Purdue Pharma would have been part of the lawsuit if it had not been for the announced bankruptcy in mid-September. AmersourceBergen, Cardinal Health, and McKesson released a joint statement still disputing the allegations made by the two Ohio counties but said that Monday’s settlement is a “steppingstone” for global resolution. According to a report from the White House Council of Economic Advisers in 2017, the opioid crisis has cost the United States $504 billion and has claimed more than 400,000 American lives. With those numbers in perspective, perhaps $48 billion nationwide would still only be a slap on the wrist for the companies who have turned death and addiction into capital gains.

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