AG Ravnsborg announces $26 billion agreement with opioid distributors
PIERRE, S.D. — On Thursday, Attorney General Jason Ravnsborg an agreement that will help bring desperately needed relief to people across the country who are struggling with opioid addiction.
The historic $26 billion agreement includes the nation’s three major pharmaceutical distributors – Cardinal, McKesson, and AmerisourceBergen. The agreement also includes Johnson & Johnson, which manufactured and marketed opioids.
Significant industry changes are required in the agreement to prevent this type of crisis from happening again, and it also resolves investigations and litigation over the companies’ roles in creating
and fueling the opioid epidemic.
“The United States saw 93,000 opioid overdose deaths last year,” said Ravnsborg. “This is a big step on the long path towards making things better for so many individuals and families who have seen their lives torn apart by addiction. This settlement has the potential to bring approximately $50 million to the people of South Dakota, spread out over the next 17 years, to help our state and help our families who have been affected by the ravages of opioid addiction.”
Claims from both state and local governments across the country would be resolved, including the nearly 4,000 that have filed lawsuits in federal and state courts.
States have 30 days to sign onto the deal, and local governments in the participating states will have up to 150 days to join to secure a critical mass of participating states and local governments.
The Funding Overview includes:
- 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 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 – and the population of the state.
With Injunctive Relief Overview, the 10-year agreement will result in court orders requiring Cardinal, McKesson, and AmerisourceBergen 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
The 10-year agreement will result in court orders requiring Johnson & Johnson 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.
This settlement comes as a result of investigations by state attorneys general into whether the three distributors fulfilled their legal duty to refuse to ship opioids to pharmacies that submitted suspicious drug orders and whether Johnson & Johnson misled patients and doctors about the addictive nature of opioid drugs.