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July 21(Hfrance.fr) - A group State Attorneys General on Wednesday unveiled a landmark $ 26 billion deal with major drug companies for allegedly fueling the deadly nationwide opioid epidemic, but the deal still requires the support from thousands of local governments.
As part of the reglement, the three largest American drug distributors - McKesson Corp (MCK.N) , Cardinal Health Inc (CAH.N) and AmerisourceBergen Corp (ABC.N) - expected to pay a total of $ 21billion, while drugmaker Johnson & Johnson (JNJ.N) would pay $ 5 billion.
The money should be used for drug treatment, family support, education and other social programs.
"There is not enough money in the world, frankly, to copeto pain and suffering "said Connecticut Attorney General William Tong, but added the money " will help where help is needed. "
The deal represents the second-largest cash settlement ever, just after the $ 246 billion tobacco deal in 1998. Attorneys General of 15 states were involved in not making the deal, as were senior local government lawyers.
McKesson will pay up to $ 7.9 billion , while AmerisourceBergen and Cardinal have each agreed to provide up to $ 6.4 billion. Payments will be made over 18 years.
J&J will pay over nine years, with up to $ 3.7 billion paid in the first three years.
About $ 2.2 billion dollars of the total would cover legal fees andlegal fees.
"This regulation will directly support state and local efforts to make meaningful progress in tackling the opioid crisis ", a said Michael Ullmann, general counsel for Johnson & Johnson.
To receive full payment, the agreement needs the support of at least 48 states , 98% of local governments in dispute and 97% of jurisdictions that have yet to file a lawsuit.
Distributors have been accused of lax controls which has diverted massive amounts of addictive pain relievers into illegal channels, devastating communities, while J&J has been accused of downplaying the risk of addiction in its opioid marketing.
The companies denied the allegations.
The regulation also calls for the creation of a center of independent exchangeAsking to provide distributors and state regulators with aggregate data on drug shipments, which negotiators hope will help prevent abuse.
In a Joint statement, the distributors called the settlement an important step "towards the comprehensive resolution of government opioid claims and providing meaningful relief to communities across the United States.
More than 3,000 lawsuits related to the health crisis, mainly by state and local governments, have been filed, and the final payment of the settlement depends on the number of localities that agrees to drop their lawsuits.
Other agreements are also being negotiated, with opioid makers Purdue Pharma and Mallinckrodt Plc (MCDG.MU) working through bankruptcy courts to secure support for settlements over $ 10 billion and 1, $ 6 billion, respectively. en read more
States will have 30 days to assess Wednesday's deal. North Carolina Attorney General Josh Stein said it is expected that "well north of 40 sign.
The opioid crisis has been blamed for hundreds of thousands of overdose deaths in the United States since 1999, but has hit some areas much harder than others, creating piss between governments when it comes to considering settlement.
"States that don't sign are irresponsible " said prosecutor general of theLouisiana, Jeff Landry. "We don't want perfection to be the enemy of good.
Distributor shares have each increased by around 1, 5%, while J&J, which also released its quarterly results on Wednesday, rose about 0.6%. read more Company shares had climbed Tuesday in anticipation of the announcement.
" NOT ALMOST GOOD ENOUGH "
Washington State Attorney General Bob Ferguson said he would not join the deal. "The settlement is, to be blunt, not good enough for Washington," he said.
To receive payment In full, the deal needs the support of at least 48 states, 98% of disputing local governments, and 97% of jurisdictions that have yet to file lawsuits.
Choose to participateguarantees a state only part of the money. The settlement provides for a base payment of up to $ 12.12 billion if all states agree to the agreement, and an additional $ 10.7 billion related to localities joining the agreement.
"Everyone has a common interest in getting maximum stake to get maximum amount of funds for nationwide reduction ", said Joe Rice, senior lawyer for local governments.
Once a state accepts the deal, its local governments have to deal with it. 120 days to join. They can only join if a state does. Paul Geller, a chief plaintiffs negotiator, said that if a state was unsure about joining, "subdivisions should let the state know they want the money. " "
About half of the states, in anticipation of the regulationt, have passed legislation or signed agreements with their localities governing how the settlement money will be distributed, according to Christine Minhee, who leads an opioid litigation monitoring project supported by an Open Society Foundations Soros Justice Fellowship .
Legislation does not guarantee success. In Indiana, cities and counties representing more than half of the state's population withdrew after a law capped their reduction to 15%.
Indiana Attorney General Todd Rokita's office has said that if these local governments do not come back to the deal, the state could lose up to $ 237.9 million on the $ 507 million it would receive.
Hard-hit West Virginia communities withdrew from the deal after collapsing seen offering less than 1% of the money, said Paul Farrell, a West Virginia plaintiffs lawyer. Local state governments are pursuing an ongoing case against distributors.
The settlement comes even as the crisis shows no signs release. The United States Centers for Disease Control and Prevention said last week that preliminary data showed 2020 was a record year for the total number of drug overdose deaths, at 93,331, up 29% from the previous year. Report by Nate Raymond in Boston; Additional reports by Brendan Pierson and Tom Hals; Editing by Bill Berkrot and Leslie Adler Nate Raymond
Nate Raymond is newsletter editor and lead authorcipal of The Daily Docket newsletter and also covers litigation. He can be contacted at [email protected] articlebody>