Pharmaceutical titan Johnson & Johnson (JNJ) - Get Johnson & Johnson (JNJ) Report and several drug distributors reached a $26 billion settlement with state attorneys general for their roles in the deadly opioid epidemic.
As its part of the settlement J&J will pay $5 billion over 9 years. The country’s three largest drug distributors, AmerisourceBergen, Cardinal Health and McKesson, will pay a combined $21 billion in the settlement.
The payments are contingent on enough states and local jurisdictions signing onto the agreements, Reuters reported.
The deal was reached with 14 state attorneys general after two years of negotiations.
Johnson & Johnson stock ended up $1.04, or 0.6%, at $$169.49 The stock has climbed 4% over the past six months.
Under the agreement, J&J is barred from selling opioids for 10 years.
The settlement covers more than 3,000 lawsuits filed by states, local governments, Native American tribes, hospital groups and others, The Wall Street Journal reports.
The negotiations lasted more than two years. Talks included the attorneys general from California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, New York, North Carolina, Ohio, Pennsylvania, Tennessee and Texas.
The lawsuits claim that drug makers encouraged use of their painkillers far in excess of what was medically necessary. And distributors and pharmacies were sued for failing to prevent an onslaught of usage.
Johnson & Johnson’s response: "We recognize the opioid crisis is a tremendously complex public health issue, and we have deep sympathy for everyone affected,” said General Consel Michael Ullmann.
“This settlement will directly support state and local efforts to make meaningful progress in addressing the opioid crisis in the United States.”
Amerisource (ABC) - Get AmerisourceBergen Corporation Report ended up 1.5%; while Cardinal (CAH) - Get Cardinal Health, Inc. Report and McKesson (MCK) - Get McKesson Corporation (MCK) Report both rose 1.6% for the day.