Four drug firms agree to pay $26 billion in proposed US opioid settlement

A group of state attorneys general have unveiled a landmark $26bn settlement with large drug companies for allegedly fueling the deadly nationwide opioid epidemic, but the deal still requires support from thousands of local governments.

Under the settlement proposal, the three largest US drug distributors, McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp, are expected to pay a combined $21bn, while drugmaker Johnson & Johnson would pay $5bn.

"There's not enough money in the world, frankly, to address the pain and suffering," said Connecticut Attorney General William Tong, adding that the money will "help where help is needed."

The deal was the second-largest cash settlement ever, trailing only the $246 billion tobacco agreement in 1998. Attorneys general from 15 states were involved in negotiating the deal, as were lead lawyers for local governments.

McKesson will pay up to $7.9bn, while AmerisourceBergen and Cardinal each agreed to provide up to $6.4bn. The payments will be made over 18 years.

J&J will pay over nine years, with up to $3.7bn paid during the first three years.

READ MORE: Multibillion-dollar settlement expected in US opioid crisis cases

The money is expected to be used on addiction treatment, family support, education and other social programs.

"This settlement will directly support state and local efforts to make meaningful progress in addressing the opioid crisis," said Michael Ullmann, Johnson & Johnson's general counsel.

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 in its opioid marketing.

The companies have denied the allegations.

The settlement also calls for the creation of an independent clearing house to provide the distributors and state regulators aggregated data about drug shipments, which negotiators hope will help prevent abuse.

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The opioid crisis has been blamed for hundreds of thousands of US overdose deaths since 1999, but has hit some regions much harder than others, creating divisions among governments when it comes to considering the settlement.

To receive the full payout, the agreement needs support from at least 48 states, 98 percent of litigating local governments and 97 percent of the jurisdictions that have yet to sue.

Electing to participate only guarantees a state some of the money.

The settlement provides a base payout of up to $12.12bn if all states agreed to the deal, and another $10.7bn tied to localities joining the deal.

Once a state agrees to the deal, its local governments have up to 120 days to join.

Meanwhile, the crisis has shown no sign of letting up. 

The US Centers for Disease Control and Prevention last week said provisional data showed that 2020 was a record year for overall drug overdose deaths with 93,331, up 29 percent from a year earlier.