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Johnson & Johnson Settles New York Opioid Proceedings for $ 230 Million

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Johnson & Johnson has agreed to pay New York $ 230 million to settle an opioid proceeding to be tried on Tuesday. The pharmaceutical industry for the opioid crisis.

Johnson & Johnson’s New York deal removes it from future trials on Long Island, but not from the remaining cases faced nationwide, including ongoing trials in California. .. The New York settlement includes an additional $ 33 million in legal fees and costs, and pharmaceutical companies are no longer required to sell opioids nationwide, Johnson & Johnson said.

The state is trying to recreate what it achieved in a tobacco company in the 1990s, when a $ 206 billion settlement flowed into the state’s financial resources in an opioid proceeding. More than 3,000 counties, cities and other local governments have also filed proceedings over the opioid crisis, which have been postponed since late 2019, complicating negotiations slowed down by the Covid-19 pandemic.

Johnson & Johnson, along with AmerisourceBergen, the country’s largest drug distributor Co., Ltd.

, Cardinal health Co., Ltd.

And McKesson Co., Ltd.

Is in talks with the state Attorney General and plaintiffs’ lawyers for the local government to settle the proceedings for $ 26 billion.

The company said on Saturday that nationwide trading continued to progress, “continuing to provide certainty to stakeholders and provide significant support to needy communities.”

A broader reconciliation debate is accelerating as trials begin in California and West Virginia in recent weeks, according to lawyers involved.

Representatives of companies, including the pharmaceutical company Johnson & Johnson, are participating in the opioid settlement negotiations.

Photo:
Mark Cowes Larich / Bloomberg News

The New York trial, where the jury was the first to hear the country and first included companies across the opioid supply chain, added urgency to the negotiations. Testimony resumed in a California trial on Monday, with several counties filing against four pharmaceutical companies and a lawsuit against drug distributors in West Virginia.

According to a disclosure made in mid-June, the Attorney General’s core team held regular settlement meetings over the phone and “have been negotiating directly in New York almost every day for the past few weeks.” In the opioid case in San Francisco.

Trials and settlement negotiations took place after states, cities, and counties have filed proceedings for more than four years to recover some of the costs of an opioid epidemic that has killed 500,000 people in the United States since 1999.

Testimony will resume in a proceeding against a drug dealer in West Virginia.

Photo:
Kenny Kemp / Charleston Gazette-Email / Associated Press

The government claims that the pharmaceutical industry has urged the pharmaceutical industry to prescribe opioids and distribute them beyond what is medically needed, causing widespread addiction that increases the abuse of illegal opioids such as heroin and fentanyl. .. The two companies broadly denied the claim and said they had sold or distributed legitimate federal regulated products needed for pain management.

The settlement is expensive, but it will give companies and their investors some confidence in their future opioid responsibilities. McKesson states that he has recorded a $ 8.1 billion bill. AmerisourceBergen and Cardinal each sell for $ 6.6 billion. And $ 5 billion will come from Johnson & Johnson. According to the company, New York shares will be deducted from that amount.

$ 230 million to New York will be paid in nine years, but in February if all the local governments in the proceedings agree to participate in the transaction and the governor signs the new state law. More than half may be paid. Create a special fund to use opioid settlements to mitigate the crisis.

The New York trial was originally set for March 2020, but has been postponed due to a pandemic. Attorney General Letitia James is pressing alongside Suffolk and Nassau counties. Under the J & J settlement, the defendants will include three other opioid manufacturers, several drug distributors, and the pharmacy Walgreens Boots Alliance. Co., Ltd.

This was only sued by the county.Three other big pharmacies — Walmart Co., Ltd.

Rite Aid Corp. And CVS Health Co., Ltd.

— The terms of the settlement have not been disclosed, but were separated from the trial during the jury selection.

In a statement, James said the state’s focus remained “to fund opioid-ravaged communities as soon as possible.” “The day of trial is here,” said county lawyer Hunter Scornick, after a few delays.

Walgreens said it distributed opioids only to its own pharmacies, not pain clinics, internet pharmacies, or “pill mills” that claimed to have contributed to the crisis. AmerisourceBergen said it would not affect the demand for medicines distributed by the company and would comply with federally mandated quotas. Other companies either declined to comment or did not respond to requests for comment.

The proceedings, like other proceedings in trial, allege that businesses caused pollution by flooding the community with opioids. The first phase of the New York trial is expected to last four months and only determines whether the company is liable. If the jury admits they are, another procedure will assess how much money they owe to the state and county.

This trial differs from the trials in Oklahoma, California and West Virginia, as it involves players from the entire supply chain. Elizabeth Birch, a law professor at the University of Georgia, said it would make it harder for businesses to blame others for causing problems.

“What we’re seeing in the current exams is that it’s easy to point your finger at an empty chair,” she said.

The first opioid trial brought by Oklahoma ended with a $ 465 million verdict that the company was suing Johnson & Johnson. In the case of the two Ohio counties, another trial ended with a settlement shortly before it was scheduled to begin in 2019.

Delayed trials slowed discussions on widespread resolution of opioid cases during the pandemic. The hearing date often acts as a deadline for a settlement. This is because both sides can benefit from the certainty that the transaction provides compared to the unpredictability, cost, and time spent on the hearing.

Even after the transaction structure is complete, there are still some steps left before the payday. State and local governments will take months to sign on, according to a recent proceeding in the San Francisco proceedings. According to lawyers involved in the negotiations, companies also have the opportunity to leave if there are not enough government agencies to participate in the settlement.

Attorneys’ fees are expected to cover approximately $ 2 billion in the settlement, according to lawyers.

Write to Sara Randazzo ([email protected])

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