Taken as a whole, the settlements are the largest to date among the numerous opioid-related cases that have been pending across the country. They are expected to provide a significant boost to efforts to reverse the crisis in areas devastated by it, including much of rural America.
Johnson & Johnson, AmerisourceBergen, Cardinal Health, and McKesson announced the settlement plan last year, but participation from a critical mass of state and local governments was required.
The companies had until Friday to announce whether they felt enough governments had committed to participate in the settlement and relinquish their right to sue. The four companies notified lawyers for the governments involved in the case that their thresholds had been met, implying that money could begin flowing to communities as early as April.
"We'll never have enough money to solve this problem right away," said Joe Rice, one of the lead lawyers who represented local governments in the litigation that resulted in the settlement. "What we're attempting to do is give many small communities a chance to try to solve some of their problems."
While no money from the settlement will go directly to victims or survivors of opioid addiction, the vast majority of it must be used to combat the epidemic. The funding is desperately needed.
According to Kathleen Noonan, CEO of the Camden Coalition of Healthcare Providers, a portion of the settlement funds should be used to provide housing to homeless people with addictions.
"We have clients who struggle to stay clean in order to stay in a shelter," she explained. "We'd like to stabilize them so we can assist them in recovering."
Camden County government spokesman Dan Keashen said officials are considering using settlement funds for a public education campaign warning about the dangers of fentanyl. They also want to send more drug counselors into the streets, hire more social workers in municipal courts, and fund anti-addiction medications in county jails.
Officials across the country are considering allocating the funds to similar purposes.
California Gov. Gavin Newsom's proposed budget calls for the state to spend $50 million of its expected $86 million share this year on youth opioid education, training treatment providers, improving data collection, and distributing naloxone, a drug that reverses overdoses.
According to Danielle Wang French, a county lawyer in Florida's Broward County, which includes Fort Lauderdale, the number of beds in a county-run detoxification facility could be increased from 50 to 70 or 75.
"It's not enough," she said of the settlement, "but it's a start."
With fatal overdoses raging across the United States, largely due to the spread of fentanyl and other illicitly produced synthetic opioids, public health experts are urging governments to use the money to ensure access to drug treatment for people suffering from addictions. They also emphasize the importance of funding proven-to-work programs, collecting data on their efforts, and launching prevention efforts aimed at young people, all while focusing on racial equity.
"It shouldn't be ready, set, spend," said Joshua Sharfstein, a former Maryland Department of Health secretary who is now a vice dean of public health at Johns Hopkins. "It should be: think, plan, and spend."
The four companies reached a $590 million settlement with the nation's federally recognized Native American tribes in a separate deal that is also included in the $26 billion. A total of $2 billion has been set aside for legal fees and expenses for the lawyers who have worked on the case for years.
Johnson & Johnson, based in New Brunswick, New Jersey, has nine years to pay its $5 billion share. The distributors — AmerisourceBergen of Conshohocken, Pennsylvania; Cardinal Health of Columbus, Ohio; and McKesson of Irving, Texas — agreed to pay a total of $21 billion over 18 years. To reach the maximum amounts, states must enlist the support of local governments.
The settlements go beyond monetary value. J&J has agreed not to reintroduce the sale of prescription opioids. The distributors have agreed to send data to a clearinghouse to help identify when prescription drugs are diverted to the black market.
The companies are not admitting wrongdoing and are defending themselves against claims that they contributed to the opioid crisis brought by entities not involved in the settlements.
The requirement that the majority of the funds be used to address the opioid crisis contrasts with a series of public health settlements with tobacco companies in the 1990s. In those cases, states used a sizable portion of the settlement funds to close budget gaps and fund other priorities.
The amount sent to each state under the opioid settlement is determined by a formula that considers the severity of the crisis as well as the population. County and municipal governments receive a portion of the funds as well. A few states — Alabama, New Hampshire, Oklahoma, Washington, and West Virginia — have not joined the settlement in full or in part, owing to their own agreements or preparations for trial.
Lisa Davey, a recovery specialist with Maryville Addiction Treatment Center in Camden, was at a needle exchange this week, handing out naloxone, a drug that reverses overdoses, and asking people if they wanted to begin treatment.
Davey stated that she would like to see more funding for detoxification and treatment programs in order to keep people in them for a longer period of time. As it stands, she claims that users can detox and be back on the streets looking for drugs within days.
"They require more time to work on their recovery," she explained.
A man picking up clean needles, identified only as Anthony P., said he was 46 years old and had struggled with addiction since he was a teenager. He'd like to see an effort to remove fentanyl and other synthetic opioids that are fueling overdose deaths from the drug supply.
"Fentanyl has to go," he declared.
One need, according to Martha Chavis, president and CEO of Camden Area Health Education Center, which operates the needle exchange, is to provide services like hers in more places. Users now travel to Camden from far-flung suburbs to obtain clean needles and kits to test their drugs for fentanyl.
The settlement with J&J and the three distributors is a significant step toward resolving the vast array of lawsuits in the United States over liability for an epidemic that has been linked to the deaths of over 500,000 Americans over the last two decades.
Other companies, such as business consultant McKinsey and drugmakers Endo, Mallinckrodt, and Teva, have reached national or multi-state settlements. Purdue Pharma, the maker of OxyContin, and a group of states are negotiating a nationwide settlement in U.S. Bankruptcy Court.
During the coronavirus pandemic, the number of opioid-related deaths in the United States reached a high of more than 76,000 in the 12 months ending in April 2021, owing largely to the spread of fentanyl and other lab-made drugs. According to a recent report from The Lancet medical journal's commission, 1.2 million Americans could die from opioid overdoses between 2020 and 2029 if no policy changes are made.
According to John F. Kelly, a professor of psychiatry and addiction medicine at Harvard Medical School, the money from the settlements should be used not only for treatment, recovery, and support efforts, but also to build systems to prevent this type of epidemic from occurring again.
"Some kind of national board or organization could be established... to prevent this kind of lack of oversight from happening again — where industry is allowed to create a public health hazard," he suggested.