Deal means $600M to fight addiction
Tennessee and half-dozen other states reach a huge settlement with opioid companies
Tennessee will reap an estimated $600 million to fight its deadly opioid addiction epidemic as part of deal announced Wednesday between drug makers and distributors and states.
Tennessee Attorney General Herbert Slatery and a half-dozen of his fellow attorneys general said they reached a historic settlement in what has been a yearslong battle to hold opioid makers, distributors and dispensers financially responsible for a crisis they intentionally fueled.
The $26 billion deal with three drug distributors — Amerisourcebergen, Cardinal Health and Mckesson — and drug maker Johnson & Johnson is the second largest product safety settlement in U.S. history, according to the attorneys general. Cigarette makers settled similar litigation years ago for $206 billion.
The opioid settlement will be paid out over 18 years. The $23.9 billion will go directly to “abatement” of the opioid epidemic with the rest covering legal fees.
“We woke up this morning to front page news that 2020 was the deadliest year on record for opiate overdose deaths in Tennessee,” Slatery said at Wednesday’s news conference. “The urgency of this problem continues. It’s just relentless.
“We have an agreement on the table,” he said. “We’re not quite to finish line, but we’re close.”
Not all states have joined in the sweeping settlement, but the attorneys general said Wednesday “north of 40 states” have agreed to the terms. The other states have 30 days to join the deal.
Slatery said local governments also will be eligible for a slice of the settlement if they agree to the terms within 150 days.
“The deal’s ratification is contingent on a critical mass of states and local governments participating,” Slatery spokeswoman Samantha Fisher said in a release. “States and their local governments will receive maximum payments if each state and its local governments join in support of the agreement.”
“Each state’s share of the funding has been determined by agreement among the states using a formula that takes into account the impact of the crisis on the state — the number of overdose deaths, the number of residents with substance use disorder, and the volume of opioids prescribed — as well as the population of the state,” Fisher wrote.
Johnson & Johnson is agreeing to stop manufacturing opiates for 10 years as part of the deal. The drug distributors are agreeing to abide by stricter regulations.
Why do the states claim companies are responsible for drug addiction and overdoses?
Generally speaking, the states allege that drug makers and drug distributors acted as drug dealers.
Specifics are different in each company, but taken together the states say the companies and their lobbyists asked Tennessee’s Legislature to pass a law that required doctors to prescribe opiates if a patient insisted, created fake pain advocacy groups to push the drugs, specifically targeted veterans and the elderly, gave out coupons to opiate addicts and targeted unscrupulous and undertrained doctors with a scheme to boost prescriptions.
Distributors are accused of helping pharmacies, including Food City instore pharmacies in Knoxville and mom-and-pop drug stores in surrounding counties, outfox the U.S. Drug Enforcement Administration in its efforts to limit opioid shipments and ignoring signs pharmacies were intentionally flooding the market with the deadly drug.
What’s next for the money?
Unlike with the tobacco settlements reached in the 1990s when states used the money for all kinds of unrelated projects, governments have agreed in the opioid cases to spend money on fixing the opioid crisis.
“We look forward to bringing muchneeded 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,” the attorneys general said in a joint statement.
But exactly how the money will be spent is up in the air for each state. The Tennessee Legislature has created a special “opioid abatement counsel” of appointed experts to decide how the money should be used.
What companies are involved?
Amerisourcebergen, Cardinal Health, Johnson & Johnson and Mckesson are part of this group settlement.
As part of the settlement, Johnson & Johnson is agreeing to stop manufacturing opiates for 10 years. The drug distributors are agreeing to abide by stricter regulations.
Tennessee is also stands to benefit from Purdue Pharma’s bankruptcy case. The Volunteer State is poised to get a slice of the $4.5 billion settlement if that deal is approved next month. All but nine states are involved in that bankruptcy case.
How many Tennesseans have died of drug overdoses?
Tennessee recorded more than 3,000 fatal drug overdoses in 2020 – the deadliest year ever.
Fatal overdoses, most of which involved fentanyl or similar synthetic opioids, rose more than 44% in 2020, according to new data released by the Centers for Disease Control and Prevention. Deaths spiked nationwide but grew more in Tennessee than in 43 other states.
Why did the drug companies target states like Tennessee?
The opioid epidemic began in earnest in South Florida in the 1990s when a couple of drug-dealing kingmakers began opening up “pain management clinics” offering opiates for cash.
But when Florida authorities started cracking down, the pill mill operators began setting up shop in Tennessee — where all you needed at the time to set up a pain clinic was an office and an absentee doctor as “medical director.”
Addiction rates grew dramatically, especially in East Tennessee. By the mid-2000s, opiate overdoses were on the rise as were robberies committed by addicts desperate to find addictive opioids.
Internal records from these opioid makers, distributors and pharmacies revealed the firms saw a gold mine in Tennessee’s opioid crisis and created specific marketing campaigns to boost the sale of opioids to the state’s addicts.
“The deal’s ratification is contingent on a critical mass of states and local governments participating. States and their local governments will receive maximum payments if each state and its local governments join in support of the agreement. Each state’s share of the funding has been determined by agreement among the states using a formula that takes into account the impact of the crisis on the state — the number of overdose deaths, the number of residents with substance use disorder, and the volume of opioids prescribed — as well as the population of the state.”
Samantha Fisher Spokeswoman for Tennessee Attorney General Herbert Slatery