States unveiled a historic $26 billion deal with drug companies to resolve thousands of opioid-crisis lawsuits, securing a stash of funding for communities across the country to address an epidemic in painkiller addiction The way has been paved, which is not finished.

The country’s three largest drug distributors- McKesson corporation, amerisource bergen Corporation, and cardinal health Inc.-and Drugmakers johnson and johnson Negotiations have been on the deal for more than two years, but Wednesday’s announcement marks an important milestone that could clear the way for states to receive funding early next year.

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States cannot use the money to fill the hole in the general budget, as they did in the 1990s after a $206 billion deal with tobacco companies. Instead, most should be spent on social services to address the pitfalls of opioid addiction, such as treatment programs, education about the disposal of pills and needles, and stronger funding for first responders. One community may use it to help a major problem of addiction in a homeless population, while another may focus more on opioid-addicted children.

“It will not be used to fill potholes, or build libraries, or balance budgets,” said Paul Geller, a plaintiff’s attorney representing several of the cities and counties involved in the deal.

Individuals and families affected by opioid abuse will not receive any money directly.

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An opioid crisis that has claimed half a million lives in America has led to more than 3,000 lawsuits filed by states, local governments, Native American tribes, hospital groups, and others against players in the pharmaceutical industry. The lawsuits allege that drug makers pushed their painkillers to use far more than medically necessary and that distributors and pharmacies didn’t do enough to stop the mass of pills from flowing into communities.

Drug addiction got worse during the pandemic, with opioid overdose deaths increasing by nearly 37% in 2020, according to government data.

The companies pushed back, saying they made and distributed a medically necessary and federally regulated product. But at the same time, the burden of litigation — such as overturning millions of internal documents, making them available for employees to submit, and preparing complex trials that can disseminate embarrassing details — has sent many companies to the negotiating table. .

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The attorney generals for Tennessee, North Carolina, Pennsylvania, New York, Louisiana, Delaware and Connecticut jointly announced the full deal Wednesday, which was rumored earlier this week.

Connecticut Attorney General William Tong said, “There is not enough money in the world to take away the pain and suffering and tragedy of the families in our states.”

The broad terms call for the three distributors to collectively pay up to $21 billion over a period of 18 years, and for Johnson & Johnson to contribute $5 billion over nine years. If enough states don’t sign, the amount could be reduced, and companies could still walk away if they decide that level of involvement doesn’t buy them the global peace they’re seeking to put the lawsuit behind them.

McKesson, Amerisource Bergen and Cardinal said in a joint statement that they dispute the charges against them, but believe the deal is a step toward resolving the claims and providing “meaningful relief to communities across the United States.” Important step.”

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“We believe the opioid crisis is a very complex public health problem,” said Michael Ullman, Johnson & Johnson’s general counsel, adding that the funding would help address the problem.

Shares of the four companies rose after news reports, including from the Wall Street Journal, that a settlement is expected this week. Analysts said the growth was positive, although investors baked the settlement amount into stock prices as the amount is known, and noted that wholesalers have reserved cash to pay.

However, some analysts said that companies that did not reach settlements this week, such as Teva Pharmaceutical Industries Ltd., still face risks because it is unclear when they can settle the lawsuit and, potentially, from this. What will it cost them?

Completing the deal took thousands of hours of negotiations between private plaintiffs’ attorneys representing communities, the state attorney general, and lawyers for the four companies. Frequent in-person meetings have given way to nightly Zoom calls for months during the pandemic.

The final details came together as opioid litigation trials took place in three states, putting pressure on both sides. Juries in New York saw funny emails that employees of a distributor had sent about the addict, including a song about “Pilbillies” set to the theme of “The Beverly Hillbillies”.

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If the settlement is completed, opioid lawsuits for these four companies will be resolved, but several other targets remain. Trials are underway in California and New York against drugmakers Teva Pharmaceutical Ltd., AbbVie Inc. of allergen, and Endo International PLC. National pharmacy chains have also been named in hundreds of suits and go to trial in October. Two other companies that were the target of the suit, including OxyContin-maker Purdue Pharma LP, filed for bankruptcy to assume liability and are negotiating their own settlements with the states.

The terms of the deal give the states 30 days to accede to or reject the agreement. If companies decide that enough states are participating, local governments will have a few more months to extend support. The amount a state ultimately receives depends largely on the amount it recruits to join its municipalities.

If a state government opts out, its county or city will not be able to access the funds.

Washington state Attorney General Bob Ferguson said he was rejecting the agreement because the $30 million a year that could flow into the state is not the “transformative amount” needed to deal with the devastation from the opioid crisis. There are upcoming trial dates against four companies in the state, and Mr. Ferguson said he plans to go ahead.

The percentage of $26 billion allocated to each state is based on the population and the impact of opioid addiction in each region.

In addition to the funds involved, distributors have agreed to create a clearinghouse intended to help companies better identify suspicious drug orders. For the first time, AmerisourceBergen, Cardinal and McKesson will be able to see where their competitors are shipping the pills, which the deal’s architects say will help them locate the pharmacies from which the drugs are diverted for illegal use. He is going.

“This agreement … puts controls that will go a long way in ensuring this never happens again,” said Pennsylvania Attorney General Josh Shapiro.

Johnson & Johnson, which provided raw materials used in pain relievers to other companies and last year stopped selling a handful of its opioid painkillers in the US, agreed to stay out of the opioid business for the next decade. happened.

Of the total amount, just over $2 billion would go toward attorney fees and expenses, much of which would be for private plaintiffs’ attorneys who represented thousands of cities and counties and some states.

Gary Wellendorf of Youngstown, Ohio, who used or abused opioids for 40 years and lost his wife to an overdose, said he hoped some of the money could be spent on providing treatment programs for those in need. who can’t stand it.

“It’s a split-second decision to get help,” Mr Wellendorf, 63, said, adding that there are few options available without insurance or funding.

If the benefits of the elderly had not covered the cost of their addiction treatment a few years ago, he said, “I would probably die.”

—Jared S. Hopkins contributed to this article.

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