Johnson & Johnson said Saturday that it agreed to pay $263 million to resolve opioid lawsuits filed in New York, settling the cases on the eve of the first U.S. jury trial over claims the company mishandled the highly addictive painkillers.
The settlement removes Johnson & Johnson from litigation filed in 2019 by New York Attorney General Letitia James and two Long Island counties that is set to go to trial this week-- part of a slew of litigation over an epidemic linked to nearly 500,000 deaths over the past two decades.
The drugmaker also agreed to permanently end the manufacturing and distribution of opioids across New York and the rest of the nation, James said in a statement announcing the settlement.
The company "helped fuel this fire, but today they're committing to leaving the opioid business -- not only in New York, but across the entire country," James said.
The settlement is the latest development in the complicated universe of opioid-related lawsuits across the U.S. that has drawn comparisons to the multistate litigation against tobacco companies in the 1990s. It reflects a path being taken by some big drug companies that see settling as in their best interests, in part because that route likely would not cost as much as losing in court repeatedly.
In its own statement, Johnson & Johnson said the deal is consistent with a $5 billion settlement proposal it made last year to resolve all its opioid liability. The global proposal has yet to be finalized.
"The dollar amount to be received by the state is the pro-rated share it would have received under the broader agreement in principle, which will be deducted from the all-in settlement amount," the company said. The company's Janssen unit stopped making opioid painkillers last year. Johnson & Johnson denied any wrongdoing.
Johnson & Johnson downplayed the attorney general's announcement. It said the settlement involved two prescription painkillers -- developed by the subsidiary and accounting for less than 1% of the market -- that are already no longer sold in the U.S.
The settlement was "not an admission of liability or wrongdoing by the company," Johnson & Johnson said. It added that its actions "relating to the marketing and promotion of important prescription pain medications were appropriate and responsible."
Thousands of lawsuits have been filed by states, cities and counties against opioid makers, drug distributors and pharmacy chains over their roles in fueling the U.S. opioid epidemic. Most of those claims are pending.
James' office said in a separate statement that the settlement would provide $230 million to New York municipalities.
"While no amount of money will ever compensate for the thousands who lost their lives or became addicted to opioids across our state or provide solace to the countless families torn apart by this crisis, these funds will be used to prevent any future devastation," James said in the release.
More than half a dozen opioid manufacturers, including Teva Pharmaceutical Industries, distributors such as McKesson Corp. and pharmacy chain Walgreens Boots Alliance still face New York's claims that they wrongfully reaped billions of dollars peddling the painkillers by illegally marketing them or turning a blind eye to suspiciously large orders. Opening arguments in those cases are to start Tuesday in Central Islip, N.Y.
McKesson and the two other distributors have proposed to pay $21 billion to settle all the opioid suits filed against them by state and local governments.
The Johnson & Johnson deal doesn't affect a current California nonjury trial in which the company is among a group of opioid makers accused of illegally marketing opioids. That trial is expected to last at least another month.
Under the terms of the New York deal, the drugmaker will hand over $30 million as a first payment tied to the settlement once New York Gov. Andrew Cuomo signs a so-called lockbox bill into law. The legislation is designed to prevent cash derived from opioid settlements in the Long Island trial being mixed into the state's general fund.
The legislation was prompted by anger over New York state officials' decision earlier this year to divert some of a $32 million settlement reached with consulting firm McKinsey & Co. over its work for opioid companies. Only $11 million was designated to pay for drug-treatment programs in the state's prisons.
Meanwhile, Walmart Inc., CVS Health Corp. and Rite Aid Corp. persuaded Judge Jerry Garguilo last week to remove them from the Long Island trial. The claims against the pharmacy providers by the state and counties will be pursued separately.
Information for this article was contributed by Jef Feeley of Bloomberg News (TNS) and by staff members of The Associated Press.