National opioid deal ends appeal of California appeal

Drug manufacturer Johnson & Johnson and three of the biggest pharmaceutical distributors in the country agreed on Friday to commit $26 billion to fight the opioid crisis in the United States as part of a multistate settlement. This resolves more than 4,000 claims in 52 states and territories, including the first government-initiated opioid court action in the nation, tried in Orange County Superior Court.

The deal involving distributors Cardinal Health, McKesson Corp. and AmerisourceBergen Corp., as well as Johnson & Johnson and its branch, Janssen Pharmaceuticals, achieved the critical mass of participating authorities to approve the settlement. In the process, it became the second-largest multistate agreement in U.S. history, second to the Tobacco Master Settlement Agreement in 1998.

California, and many of its counties and cities, will receive over $2 billion once U.S. District Judge Dan A. Polster of Northern Ohio approves. In re: National Prescription Opiate Litigation, 1:17-MD-2804, N.D. Ohio (filed Dec. 12, 2017).

"We are another step closer to bringing billions of dollars in relief to California to help fight the opioid crisis," said California Attorney General Rob Bonta in a news release. "Too many lives have been lost to opioid addiction, and the epidemic continues to plague our communities. This settlement will not only bring resources to our state, cities, and counties to help fund treatment and recovery, it will help prevent these companies from ever again engaging in the improper business practices that led to the ongoing crisis."

As part of the agreement, none of the defendants admitted any wrongdoing. Johnson & Johnson is required to stop selling opioids, not fund or provide grants to third parties for promoting opioids, end all lobbying on activities related to opioids and share clinical trial data under the Yale University Open Data Access Project.

Negotiations were led by the attorneys general of California, North Carolina, Tennessee, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, New York, Ohio, Pennsylvania and Texas.

In California, all 56 eligible counties and 361 cities -- 96% of eligible cities -- signed on to the agreement. This directly translates to over $2.05 billion in relief, out of which 85% will go to support treatment, recovery, harm reduction, and strategies to address the epidemic in local communities.

No money goes to individuals.

California has had a number of high-profile cases that will be settled through this agreement, most notably People v. Purdue Pharma et al., 14-00725287 (Orange Super. Ct, filed May 21, 2014).

When this agreement was first discussed, Orange County, the City of Los Angeles and other government entities in California continued to fight for a much larger sum -- $52 billion -- in a bench trial in Orange County alleging fraudulent and negligent business practices. Orange County Superior Court Judge Peter Wilson ruled in favor of Janssen, Purdue Pharma, and other plaintiffs, saying the government plaintiffs had not proven the companies caused opioid addiction in California.

Although members of a plaintiffs' executive committee had vowed to appeal Wilson's decision, no documents were ever filed and the case instead was finalized through the national agreement, Rob Wilcox, spokesman for the Los Angeles City Attorney's Office, confirmed Friday.

"My goal is that the tens of millions of dollars we expect from this settlement for our city will target the intersection between substance abuse disorder and homelessness," City Attorney Mike Feuer said in a news release. "We sued because no corporation, no matter how powerful, should be allowed to get away with putting profits over people's lives. Though no amount of money can ever replace the lives lost and families shattered by opioid addiction in Los Angeles, this substantial settlement will help prevent future devastation."

As part of the agreement, Cardinal, McKesson, and AmerisourceBergen will establish a clearinghouse to provide aggregated data and analytics about where opioid medication is going and how often, use data-driven systems to detect suspicious opioid orders, terminate pharmacies' ability to receive shipments if after they show signs of diversion, and prohibit staff from influencing decisions related to identifying suspicious opioid orders.