Shapiro and state AGs announce proposed $48 billion nationwide opioid settlement

Pennsylvania Attorney General Josh Shapiro announced on Monday a proposal to settle thousands of opioid lawsuits across the country for $48 billion in cash and treatment medication from major pharmaceutical companies.

The proposal on the table is meant to resolve litigation in all 50 states and the District of Columbia. The group of four state attorneys general leading the settlement talks said they are now working to get other states and local governments on board, in an attempt to resolve the massive litigation stemming from an opioid crisis that has led to more than 400,000 deaths and left cities and countries struggling with the costs of addiction in their communities.

“The key here is working to bring everyone together,” Shapiro said on a conference call with reporters. “If we can’t bring people together and there is no settlement, we will have random, haphazard litigation.”

But one of the lead attorneys for cases brought by cities and counties indicated the proposal will be an uphill battle. “We rejected this very proposal last week and continue to do so,” said Paul Hanly.

Earlier in the day, a judge overseeing the bulk of nationwide cases in federal court in Cleveland announced a $260 million settlement for cases brought by two Ohio counties, which were scheduled to go on trial starting Monday. That settlement cleared the way for a “global” framework to resolve the rest of the cases, the group of attorneys general said on Monday afternoon.

“This is a national crisis that demands a national solution,” said North Carolina Attorney General Josh Stein. He argued that distributing money and addiction treatment to states, to then be used at the local level, is the most “rational” way to put resources to work quickly.

“We want to start getting help to people today,” Stein said.

Under the proposed settlement, five pharmaceutical companies would pay $22.25 billion in cash. Most of that money — $18 billion over the next 18 years — would come from the three largest U.S. drug distributors, including Chesterbrook-based AmerisourceBergen.

Johnson & Johnson, based in New Brunswick, N.J., would pay $4 billion over two or three years, and Teva, with U.S. offices in North Wales, would pay $250 million, according to Shapiro.

Teva would be responsible for most of the noncash portion of the settlement by providing $23 billion worth of a generic drug to treat addiction over 10 years.

The three major distributors would cover $2.5 billion worth of distribution costs for the treatment, Shapiro said.

Another $500 million would be used to set up a data “clearinghouse” on purchases and sales of opioids. “It will provide a basis of information that we don’t have at this point,” said Tennessee Attorney General Herbert Slatery III.

The companies have not admitted wrongdoing.

While the exact formula for divvying up the settlement proceeds is still being finalized, Shapiro said each state would receive a share to be divided into three buckets: 15% for the state treasury, 15% for the treasuries of local governments, and 70% for addiction treatment and services.

“None of us want to see this money going to fill potholes,” Shapiro said. “We want to see the money going to deal with this crisis, as it exists today.”

In 2017, Shapiro and 40 other state AGs named nine pharmaceutical companies as subjects of an investigation into the marketing and distribution of opioids.

As part of the proposed settlement, AmerisourceBergen and the other distributors “have agreed to take aggressive internal action,” including conducting due diligence on pharmacies and training delivery drivers as part of efforts to prevent “pill mills,” according to Shapiro’s office.

AmerisourceBergen did not immediately respond to a message seeking comment.