A council of state attorneys general said on Wednesday that a landmark $26 billion settlement has been decided upon, thus settling claims that the three largest U.S. drug distributors, namely McKesson Corp. (MCK), Cardinal Health (CAH) and AmerisourceBergen (ABC) along with drug maker Johnson & Johnson (JNJ) were responsible for a deadly nationwide opioid epidemic.
As per the settlement agreement, the three drug distributors will pay a combined amount of $21 billion, while Johnson & Johnson would pay a sum of $5 billion. The break-up of the amount among the three distributors is as follows- AmerisourceBergen: $6.4 billion, Cardinal Health: $6.4 billion and McKesson: $7.9 billion.
The state attorneys general council said that the three distributors would pay the amount over a period of 18 years, while Johnson & Johnson would settle the amount in 9 years, with a sum of $3.7 billion being paid in the first three years.
The opioid crisis is said to be the reason behind many deaths in the U.S due to overdose since the year 1999. All the three drug distributors have been blamed for lax controls, which allowed the flow of large amounts of addictive painkillers to reach illegal channels thus leading to many deaths by drug overdose. Johnson & Johnson has been accused of not spreading enough awareness about the addiction risk of its opioid marketing.
All the accused companies have denied the allegations. In a statement issued on Wednesday, the three drug makers said that while they strongly deny the allegations made against them, they believe that the settlement agreement reached upon with the state attorney generals will be a major step ahead in closing the many lawsuits filed across different states. The settlement will also bring meaningful relief to communities across the United States, the statement added.
In the settlement, clauses have also been made for the setting up of an independent clearinghouse to supply information to all the three distributors and state regulators as to where the drugs are being distributed and how often. This clearinghouse, according to the government, will help bring down the number of pills being over shipped to communities.
As per reports, the final amount which the companies will have to pay is dependent on how many states across the U.S sign up for the settlement and confirm their cities and areas on board. For the states to receive any form of money, atleast 44 states must be signatories of the deal.
States have been given a 30 day time frame to decide upon whether they are on board with the agreement or not. According to reports, more than 3,000 lawsuits related to this health crisis have been filed across the country by state and local governments so it is important for them to come to some of sort of agreement to resolve the issue.
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