Baron & Budd and Opioid Consortium Announce Proposed $26 Billion Settlement with Opioid Distributors and Manufacturer

Recently, a landmark proposed $26 billion settlement agreement was announced in the nationwide opioid litigation. The settlement announcement comes only a week after the Centers for Disease Control and Prevention announced that drug overdoses in the United States increased by nearly 30% in 2020. The settlement will aid states, counties, cities, and other governmental entities across the nation that are struggling to find resources to combat the opioid epidemic in their communities.

The settlement applies to the nation’s three largest opioid distributors (known as the “Big Three”) McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation. Also included in the settlement is opioid manufacturer Johnson & Johnson. Opioid litigation involving pharmacies and other defendants remains ongoing.

What Does It Mean?

The complex agreement has several components. First, the Attorneys General of each state must accept the settlement before other public entities in the state can accept. If approved, some communities may start receiving payments as early as the first quarter of 2022.

Second, the settlement provides for injunctive relief, meaning the companies must comply with new policies and regulations. As part of the agreement, Johnson & Johnson will not manufacture, sell or distribute its opioid products for 10 years. The company is also limited on lobbying initiatives and halted from using third parties to promote its opioid products. Also, opioid sales representatives cannot be provided salaries or compensation tied to the direct sales of opioids.

Under the agreement, the Big Three distributors face new reforms for a 10 year period such as having a Chief Diversion Control Officer that will oversee operations and the creation of a centralized clearinghouse though which the Big Three will be required to account for their own shipments as well as the shipments of other distributors.

Our Role

Baron & Budd attorneys alongside the five other law firms in the Consortium have spent countless hours fighting for the public entities involved in this litigation. From battling motions to dismiss, to obtaining and analyzing decades of data, to negotiating terms of the settlement, the attorneys involved in the case have been working hard representing governments across the country in the battle against opioid addiction.

The funds obtained in the settlement will be used by states, counties, and cities for the abatement and remediation of the opioid crisis in their communities. As this historic litigation seems to be winding down, there is still a lot of work that remains to be done. The attorneys at Baron & Budd will continue to fight for the communities that have been so deeply affected by this crisis and work to hold opioid distributors and manufacturers accountable for their role in one of the deadliest epidemics to ravage our country.