Arkansas stands to receive up to $216 million of a $26 billion payout from three major pharmaceutical distributors and a major drug manufacturer and marketer that were accused of creating and fueling the country’s years-long opioid epidemic.
The settlement resolves investigations into and litigation over whether distributors Cardinal, McKesson and AmerisourceBergen fulfilled their legal duty to refuse to ship opioids to pharmacies that submitted suspicious drug orders and whether Johnson & Johnson misled patients and doctors about the addictive nature of opioid drugs.
The payout will mainly go toward opioid addiction treatment and prevention, and it follows Arkansas seeing deaths from drug overdoses (mainly opioids) explode by 39% in the federal fiscal year that ended in October 2020, which Arkansas Business reported in May.
Attorney General Leslie Rutledge announced the 10-year agreement on Thursday. It also requires significant industry changes to prevent another similar crisis.
“This settlement is a bittersweet moment that has taken years to negotiate, and will provide resources we desperately need in Arkansas to combat the devastating opioid epidemic,” Rutledge said in a news release. “Far too many Arkansans have felt the impact of the opioid epidemic and, while this agreement will not get loved ones back, it will help save lives through education and treatment of those battling addiction.”
States have 30 days to sign on to the settlement, and local governments in participating states will have up to 150 days. Maximum payments will go to each state and their local governments where all come together to support the agreement.
Rutledge said Arkansas anticipates signing the agreement after reviewing the final settlement documents.
The three distributors collectively will pay up to $21 billion over 18 years, while Johnson & Johnson will pay up to $5 billion over nine years. Up to $3.7 billion will be paid by Johnson & Johnson during the first three years.
Each state’s share of the funding has been determined by a formula that calculates the impact of the crisis using the number of overdose deaths, the number of residents with substance use disorder, the number of opioids prescribed, and the population of the state.
In addition, per the agreement, the companies will:
- Establish a centralized independent clearinghouse to provide themselves and state regulators with aggregated data and analytics about where drugs are going and how often.
- Use data-driven systems will be used to detect suspicious opioid orders from customer pharmacies.
- Terminate customer pharmacies’ ability to receive shipments, and report those companies to state regulators when they show certain signs of diversion.
- Prohibit the shipping of and report suspicious opioid orders.
- Prohibit sales staff from influencing decisions related to identifying suspicious opioid orders.
- Require senior corporate officials to engage in regular oversight of anti-diversion efforts.
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