Attorney General James Reaches $ 1.1 Billion Deal with Big Three Distributors to Treat and Prevent Opioid Use in NYS
AG James has now entered into agreements that could bring
Over $ 1.6 billion from opioid manufacturers, distributors and consultants in NYS
Lawsuit Against Three Other Opioid Makers Continues In State Court
NEW YORK – New York Attorney General Letitia James today announced a deal with McKesson Corporation, Cardinal Health Inc. and Amerisource Bergen Drug Corporation – three of the nation’s largest drug distributors – that will supply up to 1 , $ 1 billion to New York State to fight the ongoing opioid epidemic. The $ 1.1 billion deal is the largest monetary settlement ever negotiated by Attorney General James. The deal resolves claims by Attorney General James over the role of the three companies in helping fuel the opioid epidemic and will remove the three distributors from the ongoing opioid lawsuit in New York, currently pending before Suffolk County State Supreme Court.
“For more than two decades, the opioid epidemic has wreaked havoc in countless communities across New York City and the rest of the country, killing hundreds of thousands of friends and family and rendering millions of other addicts, “said Attorney General James. “And for the past two decades, McKesson, Cardinal Health, and Amerisource Bergen have distributed these opioids regardless of the national crisis they were helping fuel. But today, we hold them to account and deliver over $ 1 billion more to opioid-ravaged New York communities for treatment, recovery and prevention efforts – bringing the total to scale. government that our office negotiated in the last month alone to be over $ 1.6 billion. While no amount of money will ever make up for the millions of addictions, the hundreds of thousands of deaths, or the countless communities decimated by opioids, that money will be vital to preventing any future devastation. “
In March 2019, Attorney General James filed the country’s largest lawsuit to hold the various manufacturers and distributors responsible for the opioid epidemic accountable. The manufacturers named in the complaint included Purdue Pharma and its affiliates, as well as members of the Sackler family (owners of Purdue) and trusts they control; Janssen Pharmaceuticals and its subsidiaries (including its parent company Johnson & Johnson); Mallinckrodt LLC and its affiliates; Endo Health Solutions and its affiliates; Teva Pharmaceuticals USA, Inc. and its subsidiaries; and Allergan Finance, LLC and its affiliates. The distributors named in the complaint were McKesson Corporation, Cardinal Health Inc., Amerisource Bergen Drug Corporation and Rochester Drug Cooperative Inc.
The cases against Mallinckrodt and Rochester Drug Cooperative are now being conducted separately in the United States bankruptcy court. The case against Purdue and the Sacklers also goes to U.S. bankruptcy court, but earlier this month Attorney General James and a majority of states announced their approval of a deal that would bind the Sacklers and the Sacklers. entities they control to pay more than $ 4.5 billion. for opioid reduction, as well as shutting down Purdue and banning the Sacklers from re-selling opioids. The deal is pending court approval.
Additionally, at the end of last month, Attorney General James announced a deal with Johnson & Johnson that removed the company from the New York opioid trial in exchange for up to $ 230 million for them. state opioid prevention and treatment efforts, as well as ending the sale of opioids. at national scale.
The trial against the three remaining defendants – Endo Health Solutions, Teva Pharmaceuticals USA and Allergan Finance – is currently ongoing and will continue in state court.
The biggest monetary clawback of Attorney General James’ tenure
As part of today’s deal, McKesson, Cardinal Health and Amerisource Bergen will pay New York State a total of $ 1,179,251,066.68, of which more than $ 1 billion will go to the reduction. Payments will start in just two months and will continue for the next 17 years.
The majority of the $ 1.1 billion payment will be a guaranteed base payment, with the remaining funds earmarked for incentive payments to be paid if New York City prohibits, resolves, or fully discharges current and future subdivision disputes. Simply put, the higher the level of participation of New York State’s political subdivisions, the greater the funds that will ultimately be paid for the abatement to the state and local communities over the total 18 years. Specifically, today’s agreement ensures that the vast majority of funds will be allocated and tracked regionally to communities across the state that have been hardest hit by the opioid epidemic.
Part of today’s payment includes New York’s share of a national fundraiser that will be provided to states that have not engaged an outside lawyer. Like most of the other funds announced today, these funds will be used for remediation purposes and will not go into the general state fund. Finally, any national fund created to compensate lawyers in private practice for attorneys’ fees will also be used to pay private attorneys used by New York political subdivisions, ensuring that more than $ 1 billion announced today for the reduction of opioids will not be affected by anything else.
National coordination of data on the distribution of opioids
In addition to negotiating the largest monetary settlement since taking office, Attorney General James – in the context of an upcoming national settlement – has negotiated a change in how information about opioid orders is collected and used nationally. Pursuant to this agreement, McKesson, Cardinal Health and Amerisource Bergen will implement a new process for collecting and analyzing data on opioid orders received by other companies through the creation of a revolutionary clearinghouse, operating under the supervision of an independent third-party controller. . Specifically, this clearinghouse will consolidate data from all three distributors to enable consistent and aggregated data analysis, giving each distributor the ability to track their own opioid shipments, while simultaneously counting shipments from other distributors. Additionally, the clearinghouse will use the distributor’s collective data to establish pharmacy-specific opioid shipping limits that each distributor must adhere to.
This system will, for the first time, provide a more accurate picture of the overall distribution of opioids across the country and will force drug distributors to modify their shipments based on shipments from other distributors.
Today’s deal would further resolve lawsuits against McKesson, Cardinal Health and Amerisource Bergen by the counties of Nassau and Suffolk if the county legislatures approve the deal next month. In the meantime, Attorney General James plans to file a motion today to remove the three distributors from the opioid lawsuit underway in New York City in state court.
Today’s deal was negotiated in coordination with a broader global settlement that remains pending, but could potentially end litigation by thousands more entities, including all pending litigation by attorneys general. states across the country. While a global deal is still being negotiated, if a deal is reached before July 1, 2022, New York will join that deal and the terms of today’s deal will be incorporated into that deal.
Separately, but in connection with his opioid work, last February, Attorney General James co-led a coalition of nearly every attorney general in the country, issuing more than $ 573 million – including more than $ 32 million were destined for New York State – towards opioid treatment and reduction in an agreement and consent judgment with McKinsey & Company. The deal with one of the world’s largest consulting firms resolved investigations by attorneys general into the company’s role in its work for opioid companies, helping these companies promote their drugs and profit million dollars from the opioid epidemic.
Attorney General James is especially grateful for the close cooperation of a number of state attorneys general and their staff in negotiating today’s deal, and for their continued partnership in the unfinished business of delivering justice. and to bring significant relief to those affected by the opioid epidemic in New York City and across the country.
For the New York Attorney General’s office, this negotiation was led by Senior Deputy Attorney General Jennifer Levy and Senior Advisor and Special Advisor Mr. Umair Khan.
The OAG’s pre-litigation investigation into McKesson, Cardinal Health and Amerisource Bergen was conducted by Deputy Attorneys General Noah Popp, Conor Duffy, Diane Johnston, Jeremy Pfetsch and Jennifer Simcovitch, under the direction of Senior Counsel John Oleske and the special advocate Sara. Haviva Mark. The OAG’s trial team for enforcement actions against the opioid distributors and manufacturers named in the complaint is led by Senior Enforcement Counsel John Oleske and Deputy Attorney General Monica Hanna, and includes : Assistant Attorneys General Conor Duffy, Carol Hunt, Diane Johnston, Leo O’Toole, Jeremy Pfetsch, Michael Reisman, Lois Saldana and Jennifer Simcovitch; project lawyers Wil Handley, Stephanie Torre and Eve Woodin; Paralegal Ketty Dautruche; and legal assistant David Payne. Data analysis and presentation support are provided by Senior Data Analyst Akram Hasanov, Data Analyst Anushua Choudhury, Data Scientists Chansoo Song and Gautam Sisodia, Former Data Scientist Katie Rosman and current and former research and analysis interns, all under the supervision of Research and Analysis Director Jonathan Werberg and Deputy Director Megan Thorsfeldt. Litigation support is provided by Information Technology Specialists Hewson Chen and Paige Podolny and Electronic Discovery Document Review Specialist Kristin Petrella. Consultation on the testing strategy is provided by Senior Advisor and Special Advisor Mr. Umair Khan and Head of Investor Protection Bureau Peter Pope. Special thanks go to former Opioids and Impact Litigation Lawyer David Nachman and former Special Advocates Elizabeth Chesler and Mandy DeRoche for their much needed leadership during the pre-trial stages of this proceeding. The OAG’s civil enforcement actions are all conducted under the supervision of Senior Deputy Attorney General Jennifer Levy.