Attorney General Phil Weiser announces $26 billion nationwide agreement with major drug distributors and Johnson & Johnson for their role in opioid epidemic

Colorado stands to receive at least $300 million over 18 years for opioid abatement programs

July 21, 2021 (DENVER)—Attorney General Phil Weiser today announced a historic $26 billion agreement that will bring needed relief to people in Colorado and across the country who are struggling with opioid addiction. The agreement includes Cardinal, McKesson, and AmerisourceBergen—the nation’s three major pharmaceutical distributors—and Johnson & Johnson, which manufactured and marketed opioids.

The agreement would resolve investigations and litigation over the companies’ roles in creating and fueling the opioid epidemic. The agreement also requires significant industry changes that will help prevent this type of crisis from ever happening again. A bipartisan group of attorneys general from California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, New York, North Carolina, Ohio, Pennsylvania, Tennessee, and Texas led the state negotiations.

“Since I took the oath of office as Colorado’s Attorney General, our team has focused on how to respond to the opioid epidemic, addressing the supply side, the demand side, and the impact of rising levels of addiction,” Weiser stated. “We have taken a leadership role in the litigation in a number of critical matters, including leading a nationwide action against McKinsey & Company, driving a better settlement with the Sackler family and Purdue Pharma, and reaching this critical milestone against a set of companies that fueled the opioid epidemic. We now have critical work to do to ensure that these funds—working with our local government partners—are used effectively to abate this epidemic.”

The agreement would resolve the claims of the states and nearly 4,000 local governments across the country that have filed lawsuits in federal and state courts. Following today’s announcement, states have 30 days to sign onto the deal, and then local governments in the participating states will have an opportunity to also sign on. Ratification of the deal is contingent on a critical mass of states and local governments participating. States and their local governments will receive maximum payments if each state and its local governments join in support of the agreement.

As a lead state, Colorado supports the deal. Once the state formally endorses the deal, Colorado’s local governments will be eligible to participate. Colorado will share its portion of money from this agreement with local governments in our state to support recovery, treatment, and education and prevention programs, as well as appropriate harm reduction efforts and addressing the impact of the epidemic in the criminal justice system.

As part of the settlement, the attorney general’s office has worked closely with local governments to develop a joint framework for distributing opioid settlement dollars through local regions around the state. Colorado stands to receive at least $300 million to address the opioid crisis if our local governments also agree to the deal, which is on top of the previous opioid settlements that will generate almost $100 million for Colorado.

Funding Overview

A formula based on the impact of the crisis in each state— including 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 determines how much each state will receive from the settlement funds. According to today’s agreement:

• 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 amounts distributed will be determined by the overall degree of participation by both litigating and non-litigating states and local governments.
• A substantial majority of the money will be spent on opioid treatment and prevention.

Injunctive Relief Overview

This settlement is 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 investigations and litigation focusing on whether Johnson & Johnson misled patients and prescribers about the addictive nature of opioid drugs.

The agreement will result in court orders requiring Cardinal, McKesson, and AmerisourceBergen to do the following:

• 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 pharmacies 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.

In addition, the agreement requires Johnson & Johnson to stop manufacturing and selling opioids for 10 years, to stop funding or providing grants to third parties for promoting, and to stop lobbying activities related to opioids. Johnson & Johnson must also share clinical trial data under the Yale University Open Data Access Project.

According to preliminary data from the Centers for Disease Control and Prevention released last week, drug overdose deaths rose to a record 93,000 nationwide in 2020, a nearly 30% increase over the prior year. Approximately 1,512 Coloradans died from an opioid overdose last year. Over the last 20 years, more than 7,600 Coloradans died from an accidental opioid overdose, and thousands more have struggled with addiction. The damage also impacts families, friends and the broader communities that suffer the consequences.

A previous version of this deal in principle was announced in 2019 and included the opioid manufacturer Teva. Negotiations with Teva are ongoing and are no longer part of this agreement. Today’s deal comes on the heels of previously announced opioid settlements with Purdue Pharma, McKinsey Consulting, Mallinckrodt, and Insys Therapeutics.

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