Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
$1.99
per week
for 24 weeks
// //

U.S. state attorneys-general are expected this week to unveil a $26-billion settlement resolving claims that three major drug distributors and drugmaker Johnson & Johnson helped fuel a nationwide opioid epidemic, people familiar with the matter said on Monday.

Distributors McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp would pay a combined $21-billion, while Johnson & Johnson would pay $5-billion. New York on Tuesday is expected to announce the distributors have agreed to a $1-billion-plus settlement with the state, a source said.

The ultimate settlement price tag could fluctuate depending on the number of states and political subdivisions that agree to the deal or reject it and pursue litigation on their own in hopes of a bigger payout down the line.

Story continues below advertisement

More than 40 states are expected to support the nationwide settlement, two sources said. States will have 30 days to decide whether to join the global accord then more time to try to convince their cities and counties to participate in the deal, the sources said.

McKesson has previously said that of the $21-billion the three distributors would pay over 18 years, more than 90 per cent would be used to remediate the opioid crisis while the rest, about $2-billion, would be used to pay plaintiffs’ attorney fees and costs.

Several states have passed laws or reached agreements with their political subdivisions to govern how settlement proceeds would be allocated in the event of a nationwide settlement.

The financial terms are in line with prior disclosures by the three distributors and J&J about what they expected to have to pay following long-running settlement talks.

“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,” J&J said in a statement.

McKesson and Cardinal Health had no comment while AmerisourceBergen said it does not comment on “rumour and speculation.” They have all previously denied wrongdoing.

Nearly 500,000 people died from opioid overdoses in the United States from 1999 to 2019, according to the U.S. Centers for Disease Control and Prevention (CDC). The opioid crisis appeared to worsen during the COVID-19 pandemic.

Story continues below advertisement

The CDC last week said provisional data showed that 2020 was a record year for drug overdose deaths with 93,331, up 29 per cent from a year earlier. Opioids were involved in 74.7 per cent, or 69,710, of those overdose deaths.

The distributors were accused of lax controls that allowed massive amounts of addictive painkillers to be diverted into illegal channels, devastating communities, while J&J was accused of downplaying the addiction risk.

Governments have said the money will be used to fund addiction treatment, family support programs, education and other health initiatives to address the crisis.

Other settlements are also being negotiated, with the opioid makers Purdue Pharma and Mallinckrodt Plc now working through the bankruptcy courts to secure support for settlements worth more than $10-billion and $1.6-billion, respectively.

The distributors have been in the midst of two trials nationally in the litigation, one in New York and one in West Virginia. They have now agreed to resolve the New York case, a person briefed on the matter said.

The deal with New York Attorney-General Letitia James and the populous Long Island counties of Nassau and Suffolk comes three weeks into the first jury trial accusing companies of profiting from a flood of addictive painkillers that devastated communities.

Story continues below advertisement

Closing arguments are expected in the West Virginia trial next week. Local West Virginia communities had opted out of the proposed nationwide deal to pursue one on their own.

The New York trial will continue against three drugmakers accused of deceptively marketing their painkillers – Endo International Plc, Teva Pharmaceutical Industries Ltd and AbbVie Inc’s Allergan unit.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies