Michigan Attorney General Dana Nessel has officially signed on to a proposed multibillion-dollar national opioid settlement with Johnson & Johnson and the three largest pharmaceutical distributors in the country: Cardinal Health, McKesson, and AmerisourceBergen.
The historic agreement was announced last month and was the result of ongoing efforts to hold these companies responsible for their roles in contributing to the opioid epidemic gripping this country.
Depending on the allocation metrics and participation of local units of government, Michigan stands to receive up to nearly $800 million from these defendants over the life of the settlement, with priority placed on spending for treatment and prevention. Only the 1998 national tobacco settlement has involved more dollars than this proposed settlement.
The state deadline to join the settlement was Saturday, August 21. Next, the defendants will evaluate the extent of state sign-ons and determine if they wish to continue the process. They have up to 14 days to do that. If the defendants decide enough states have signed on, then the process moves to the local government sign-on period, which is 120 days. Following that timeframe, the defendants will determine if enough local governments have signed on to move forward.
“Holding these companies accountable for their role in fueling the opioid epidemic has remained one of my biggest commitments as Attorney General,” Nessel said. “Our official sign-on is an important step in the progression of this historic settlement. This funding would support ongoing prevention and treatment efforts across the state, and I have long argued that much-needed financial support should be coming from those who created this crisis—not the communities suffering through it.”
Since taking office, Nessel has prioritized combatting the opioid epidemic. Most recently Nessel joined a bipartisan coalition of attorneys general in February to secure a $573 million settlement with one of the world’s largest consulting firms, McKinsey & Co. Michigan is on the receiving end of $19.5 million in that settlement. Michigan has already received approximately $16 million of this money.
Additionally, Michigan became the first state in the country to sue major opioid distributors as drug dealers under Nessel’s leadership in December 2019. That case remains in active litigation. However, this historic settlement will resolve the claims against three of the four defendants in the case. The litigation against Walgreens will continue.
State negotiations were led by Attorneys General Josh Stein (NC), Herbert Slatery (TN) and the attorneys general from California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, New York, Ohio, Pennsylvania, and Texas. The agreement in principle was reached by all parties in October of 2019 and the parties have been working on the particulars of the settlement since then.
—Funding Overview:
• The three distributors collectively will pay up to $21 billion over 18 years.
• Johnson & Johnson will pay up to $5 billion over nine years with up to $3.7 billion paid during the first three years.
• The total funding distributed will be determined by the overall degree of participation by both litigating and non-litigating state and local governments.
• The substantial majority of the money is to be spent on opioid treatment and prevention.
• Each state’s share of the funding has been determined by agreement among the states using a formula that takes into account the population of the state along with the impact of the crisis on the state - the number of overdose deaths, the number of residents with substance use disorder, and the number of opioids prescribed.
—Injunctive Relief Overview:
• Requires Cardinal, McKesson, and AmerisourceBergen, through court orders, to:
• Establish a centralized independent clearinghouse to provide all three distributors and state regulators with aggregated data and analytics about where drugs are going and how often, eliminating blind spots in the
current systems used by distributors.
• Use data-driven systems to detect suspicious opioid orders from customer pharmacies.
• Terminate customer pharmacies’ ability to receive shipments, and report those companies to state regulators, when they show certain signs of diversion.
• Prohibit shipping of and report suspicious opioid orders.
• Prohibit sales staff from influencing decisions related to identifying suspicious opioid orders.
• Require senior corporate officials to engage in regular oversight of anti-diversion efforts.
• Requires Johnson & Johnson, through court orders, to:
• Stop selling opioids.
• Not fund or provide grants to third parties for promoting opioids.
• Not lobby on activities related to opioids.
• Share clinical trial data under the Yale University Open Data Access Project.
In addition to her legal actions against companies, AG Nessel serves on the Michigan Opioids Task Force. The group released its 2020 Annual Report in May, which noted opioid overdoses killed 1,768 Michiganders in 2019 – an average of almost five people every single day.
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