The state of New York has reached a $1.1 billion settlement agreement with three of the nation’s largest drug distributors after the state accused the companies of contributing to the opioid crisis.
New York Attorney General Letitia James (D) released the settlement obtained with the McKesson Corporation, Cardinal Health Inc. and AmerisourceBergen Drug Corporation on Tuesday, saying the state is holding the distributors “accountable” for their alleged role in the epidemic.
The three distributors will pay the $1.1 billion to New York state, with more than $1 billion of that being designated to opioid treatment, recovery and prevention. The payments will start in two months and continue over 17 years.
In exchange, New York will file to remove McKesson, Cardinal and AmerisourceBergen from its continuing opioid trial in Suffolk County State Supreme Court.
“While no amount of money will ever compensate for the millions of addictions, the hundreds of thousands of deaths, or the countless communities decimated by opioids, this money will be vital in preventing any future devastation,” James said in a statement.
Under the agreement, the three companies will also develop a data collection and analysis method for opioid orders through a clearinghouse that will be monitored by an independent third party.
In a joint statement, McKesson, Cardinal and AmerisourceBergen said they saw the settlement as “an important step toward finalizing a broad settlement with states, counties, and political subdivisions.”
“While the companies strongly dispute the allegations at issue in the trial, they believe this resolution will allow the companies to focus their attention and resources on the safe and secure delivery of medications and therapies while delivering meaningful relief to affected communities, and will also support efforts to achieve a broad resolution under the previously disclosed framework,” the distributors said in a joint release.
"The distributors remain deeply concerned about the impact the opioid epidemic is having on communities across the nation and remain committed to being part of the solution," the statement continued.
McKesson, Cardinal and AmerisourceBergen faced allegations that they distributed opioids into communities without adequate oversight. The companies denied these accusations, saying the drug manufacturers and prescribing doctors were at fault.
The news of the settlement comes after U.S. overdose deaths rose to a record of more than 93,000 last year, according to Centers for Disease Control and Prevention (CDC) data released last week. Most of the deaths — about 69,000 — were from opioid overdoses.
Last month, Johnson & Johnson settled a lawsuit with New York state for $230 million after being accused of committing insurance fraud through promoting painkillers.
Consulting firm McKinsey & Company also announced earlier this year that it will pay $573 million to settle a case over its recommendations to opioid manufacturers involving multiple states and territories, including New York.
The trial in state court is ongoing for manufacturers Endo Health Solutions, Teva Pharmaceuticals USA and Allergan Finance. Separate cases against Mallinckrodt, Rochester Drug Cooperative and Purdue Pharma are active in U.S. Bankruptcy Court.
Updated at 12:04 p.m.