MONTPELIER —Vermont Attorney General T. J. Donovan was among attorneys general announcing a $26 billion “anticipated settlement agreement in principle” Wednesday with the nation’s three biggest drug distribution companies and the drugmaker Johnson & Johnson for their role in the opioid epidemic.
“Vermont will likely receive approximately $60 million, and it is imperative that some of this money be directed to local communities to abate the opioid crisis,” Donovan said of the proposed settlement in a news release Wednesday afternoon.
The settlement terms also require “significant industry changes that will help prevent this type of crisis in the future,” Donovan’s office said. “The settlement agreement would resolve investigations and litigation over the companies’ roles in creating and fueling the opioid epidemic.”
Each state will have 30 days to decide whether to join the settlement, and local governments will have 120 days after that to decide. If state and local governments don’t opt in, the settlement would decrease in value.
Vermont sued Cardinal Health Inc. and McKesson Corporation in Chittenden Superior Court in 2019, alleging that the firms “committed unfair and deceptive acts in violation of the Vermont Consumer Protection Act.”
The lawsuit claimed the defendants’ systems “were wholly inadequate to fulfill their legal duty to monitor and control the sale of opioids.”
Under the settlement proposal, McKesson, Cardinal Health and AmerisourceBergen Corp. would pay a combined $21 billion, while Johnson & Johnson would pay $5 billion.
Earlier this month, Donovan announced the state would not sign onto a bankruptcy settlement stemming from a class action lawsuit against Purdue Pharma, the maker of OxyContin, about its role in the nationwide opioid crisis.
Wednesday, Donovan said he had formally objected to the Purdue Pharma settlement, on the basis that “the Court does not have the authority to release states’ civil claims against the Sackler family in a bankruptcy proceeding because it would violate State sovereignty.”
In that settlement, the Sackler family, which founded and owns Purdue Pharma, is using its enormous wealth to shield itself from liability, Donovan said in a separate announcement.
“The plan allows them to extinguish the states’ lawsuits against the Sacklers. At the end of the bankruptcy, the Sacklers will keep billions of dollars in wealth made from the opioid crisis, a substantial portion of which they are shielding in offshore accounts,” Donovan said. “Meanwhile, the states will continue to struggle to abate the crisis the Sacklers caused.”
In a joint statement Wednesday, Cardinal Health, McKesson, and AmerisourceBergen said they “strongly dispute” the allegations made in lawsuits leading to the settlement. However, they believe “the proposed settlement agreement and settlement process it establishes ... are important steps toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities across the United States.”
“There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need,” the company said. “The settlement is not an admission of liability or wrongdoing, and the Company will continue to defend against any litigation that the final agreement does not resolve.”
“There continues to be progress toward finalizing this agreement and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need,” Johnson & Johnson said Tuesday. “The settlement is not an admission of liability or wrongdoing, and the Company will continue to defend against any litigation that the final agreement does not resolve.”
The state and local governments say distribution companies did not have proper controls to flag or halt shipments to pharmacies that received outsized shares of powerful and addictive prescription painkillers. The companies have maintained they were filling orders of legal drugs placed by doctors — so they should not shoulder blame for the nation’s addiction and overdose crisis.
An Associated Press analysis of federal distribution data found that enough prescription opioids were shipped in 2012 for every person in the U.S. to have a 20-day supply.
And opioids — including both prescription drugs and illegal ones like heroin and illicitly produced fentanyl — have been linked to more than 500,000 deaths in the U.S. since 2000. The number of cases reached a record high in 2020.
Vermont saw 157 opioid overdose deaths in 2020, a 38 percent increase from 114 deaths in 2019.
Information from The Associated Press was used in this report.