Kansas Attorney General Derek Schmidt announced the final approval of a $26 billion opioid settlement with the nation’s three major pharmaceutical distributors and manufacturer Johnson & Johnson, clearing the way for the release of funds to states and local governments to treat and prevent opioid addiction.
The agreement with distributors Cardinal Health, Inc., McKesson Corporation, and AmerisourceBergen Corporation and drug maker Johnson & Johnson concludes a three-year effort to resolve more than 4,000 claims made against the companies by states and local governments.
It is the second largest multistate settlement agreement in U.S. history, second only to the Tobacco Master Settlement Agreement reached by state attorneys general in 1998.
Schmidt said in addition to settling claims brought by the state of Kansas, his office was also able to achieve 100 percent sign-on from Kansas political subdivisions that had brought their own lawsuits. He said this means Kansas will qualify to receive the maximum amount of payments under the agreement, estimated to be approximately $190 million for Kansas over the duration of the settlement payout period. The first distributions to the state are expected later this spring, and will continue for as many as 17 years.
The conditions of the agreement with the pharmaceutical distributors include:
- Establishing an independent clearinghouse for tracking where drugs are going and how often.
- Maintaining a data-driven system to detect suspicious opioid orders from customer pharmacies.
- Terminating customer pharmacies’ abilities to receive shipments, and report those companies to state regulators, when they show certain signs of drug diversion.
- Prohibiting sales staff from influencing decisions related to identifying suspicious opioid orders.
- Requiring senior corporate officials to engage in regular oversight of anti-diversion efforts.
Johnson & Johnson will be required to:
- Stop selling opioids.
- Not fund or provide grants to third parties for promoting opioids.
- Not lobby on activities related to opioids.
- Share clinical trial data under the Yale University Open Data Access Project.
In February 2021, a coalition of attorneys general from 46 other states, the District of Columbia and five U.S. territories reached a settlement with McKinsey & Company, one of the world’s largest consulting firms.
That settlement resolved allegations the company violated the Kansas Consumer Protection Act by helping opioid companies illegally promote their drugs and profit from the opioid epidemic. Kansas will receive $4.8 million from the McKinsey agreement to be used for drug treatment and addiction abatement.
Kansas also is engaged in ongoing investigations and negotiations with other companies the state believes played a role in illegally fueling opioid addiction.
Under a state law proposed by Schmidt and enacted last year by the Legislature, money recovered by the attorney general pursuant to opioid litigation will be used to address substance abuse and help ensure addiction services are provided throughout the state. Funding will be available through a grant review board created by the statute. State agencies, local governments and not-for-profit entities may apply for funding for addiction treatment and abatement through the board, which is currently being formed.
Additional information about the opioid settlements is available at https://ag.ks.gov/opioids.
