Opioid $26b deal and new painkiller regulations
More than two decades and 500,000 overdose deaths after the US opioid epidemic began, the biggest penalty for drug companies’ role in the crisis was announced yesterday, when lawyers for states, cities and counties detailed a tentative settlement worth $26 billion (NZ$37.5B).
The three major drug distributors – which federal law assigns primary responsibility for preventing illegal diversion of pharmaceutical painkillers – would pay $21b over 18 years. Those companies, Mckesson, Cardinal Health and Amerisourcebergen, have been accused of ignoring clear signs that billions of pills spilled onto the black market and contributed to the US addiction problem.
Johnson & Johnson, which once supplied much of the raw material for opioids and sold some painkillers but no longer does either in the United States, would pay $5b over nine years.
The deal, still several important steps from completion, would settle more than 3000 lawsuits brought by states, cities, counties and other jurisdictions that were consolidated into one of the largest and most complex civil litigation battles in US legal history.
But other lawsuits will continue, as will the drug epidemic at the centre of the conflict. Just last week, the government announced that an estimated 69,710 people had died of overdoses involving opioids in 2020 – a record 191 every day. Now the main culprit is illicit fentanyl manufactured in labs abroad, not the legal medicine distributed here. Opioid prescriptions have plummeted from a peak of 255.2 million 2012 to 153.2 million in 2019, according to the Centres for Disease Control and Prevention.
The settlement money will be spent on treatment, prevention, education and other costs of the epidemic. Private attorneys will recoup nearly $2b. But none of the families that have lost loved ones, or the estimated 1.6 million people with a substance use disorder will receive any cash.
‘‘We look forward to bringing much-needed dollars home to our states to help people recover from opioid addiction and to fundamentally change the opioid manufacturing and distributing industries so this never happens again,’’ a group of 10 state attorneys general involved in the negotiations said. Some money could be set aside in an escrow fund as soon as September.
The financial and social harms of the epidemic far outweigh the proposed total settlement, said Gary Mendell, whose son Brian died in 2011 after battling addiction. But the agreement was a step towards remediating the crisis, he said.
‘‘There could have been a holdout and [we would] end up with more money in three to five years from now, but think about how many people would have died in the meantime,’’ Mendell said.
‘‘Getting this deal struck now and getting this money distributed fairly quickly, this is going to start to save people’s lives right away.’’
Mendell, founder of Shatterproof, a nonprofit working to curb the addiction crisis, said a critical part of the deal was guaranteeing the funds would be used for evidence-based treatment and prevention programmes. The huge 1998 settlement with tobacco companies has been criticised because it did not prevent states from using the money for other purposes.
More unusual than the cash is the enforcement mechanism that would be established by the settlement. Under the deal, the three distributors, which control 85 to 90 per cent of the market, are required to establish and fund a ‘‘clearinghouse’’ that shows where every opioid dose is headed.
They must check the database before sending out each shipment of pills and hold theirs back if it appears that the recipient – a drugstore or other facility – is asking for an extraordinary amount of drugs, a typical sign that some are being diverted and sold on the street. The company must notify state and federal authorities and hold back its shipment, even if that cuts into its revenue, according to attorneys who briefed reporters on the deal.