AG James Reaches $1.1 Billion Agreement with Big Three Distributors to Treat & Prevent Opioid Use
NEW YORK – New York Attorney General Letitia James today announced an agreement with McKesson Corporation, Cardinal Health Inc., and Amerisource Bergen Drug Corporation — three of the nation’s largest drug distributors — that will deliver up to $1.1 billion to New York state to combat the ongoing opioid epidemic. The $1.1 billion agreement is the largest monetary settlement ever negotiated by Attorney General James. The agreement resolves claims made by Attorney General James for the three companies’ role in helping to fuel the opioid epidemic and will remove the three distributors from New York’s ongoing opioid trial, currently underway in Suffolk County State Supreme Court.
“For more than two decades, the opioid epidemic has wreaked havoc on countless communities throughout New York and across the rest of the nation, killing hundreds of thousands of our friends and family members and addicting millions more,” said Attorney General James. “And over the course of these past two decades, McKesson, Cardinal Health, and Amerisource Bergen distributed these opioids without regard to the national crisis they were helping to fuel. But today, we’re holding them accountable and delivering more than $1 billion more into New York communities ravaged by opioids for treatment, recovery, and prevention efforts — bringing the statewide total our office has negotiated in the last month alone to more than $1.6 billion. While no amount of money will ever compensate for the millions of addictions, the hundreds of thousands of deaths, or the countless communities decimated by opioids, this money will be vital in preventing any future devastation.”
In March 2019, Attorney General James filed the nation’s most extensive lawsuit to hold accountable the various manufacturers and distributors responsible for the opioid epidemic. The manufacturers named in the complaint included Purdue Pharma and its affiliates, as well as members of the Sackler Family (owners of Purdue) and trusts they control; Janssen Pharmaceuticals and its affiliates (including its parent company Johnson & Johnson); Mallinckrodt LLC and its affiliates; Endo Health Solutions and its affiliates; Teva Pharmaceuticals USA, Inc. and its affiliates; and Allergan Finance, LLC and its affiliates. The distributors named in the complaint were McKesson Corporation, Cardinal Health Inc., Amerisource Bergen Drug Corporation, and Rochester Drug Cooperative Inc.
The cases against Mallinckrodt and Rochester Drug Cooperative are now moving separately through U.S. Bankruptcy Court. The case against Purdue and the Sacklers is also moving through U.S. Bankruptcy Court, but, earlier this month, Attorney General James and a majority of states announced their approval of an agreement that would force the Sacklers and entities they control to pay more than $4.5 billion for opioid abatement, as well as shut down Purdue, and ban the Sacklers from ever selling opioids again. The agreement is pending court approval.
Additionally, late last month, Attorney General James announced an agreement with Johnson & Johnson that removed the company from New York’s opioid trial in exchange for up to $230 million for the state’s opioid prevention and treatment efforts, as well as it ending the sale of opioids nationwide.
The trial against the three remaining defendants — Endo Health Solutions, Teva Pharmaceuticals USA, and Allergan Finance — is currently underway and will continue in state court.
Largest Monetary Recovery in Attorney General James’ Tenure
As part of today’s agreement, McKesson, Cardinal Health, and Amerisource Bergen will pay New York state a total of up to $1,179,251,066.68, of which more than $1 billion will go towards abatement. Payments will start in just two months and will continue over the course of the next 17 years.
The majority of the $1.1 billion payment will be a guaranteed, base payment, with the remaining funds earmarked as incentive payments to be paid if New York maximally bars, resolves, or releases current and future subdivision litigation. Put simply, the greater the level of participation from political subdivisions across New York state, the more funds that ultimately will be paid out for abatement to the state and to local communities over the course of the 18 total years. More specifically, today’s agreement ensures the vast majority of funds will be allocated and tracked at a regional level to communities across the state that have been most hard hit by the opioid epidemic.
Part of today’s payment includes New York’s share of a national pot that will be provided to states that did not hire outside counsel. Like most other funds announced today, these funds will be used for abatement purposes and will not go toward the state’s general fund. Finally, any national fund created to compensate private practice attorneys for lawyers’ fees will also be used to pay private attorneys used by New York’s political subdivisions, ensuring the more than $1 billion being announced today for opioid abatement will not be allocated to anything else.