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Drug Companies to Pay N.Y. More Than $1 Billion to Settle Opioid Lawsuit

The payout to New York will take place over the next 17 years, and joins a $26 billion deal to settle the thousands of nationwide lawsuits.

The opioid case in New York is so vast that the trial is being held at a law school in Central Islip.
The opioid case in New York is so vast that the trial is being held at a law school in Central Islip. Credit... Johnny Milano for The New York Times

Sarah Maslin Nir

Published July 20, 2021 Updated July 21, 2021

New York will get more than $1 billion dollars from the three largest distributors of opioids, part of $26 billion deal confirmed on Wednesday to resolve thousands of lawsuits filed by states and municipalities against companies involved in the opioid crisis.

The state’s agreement with the distributors, Cardinal Health, McKesson Corp and AmerisourceBergen, follows a $230 million settlement with the drugmaker Johnson Johnson, amid a far-reaching trial currently underway in Central Islip, on Long Island. New York’s lawsuit targeted all links in the opioid supply chain, and one by one, major companies named in the suit have settled with the state.

Letitia James, the New York State attorney general, announced the distributors’ settlement with New York on Tuesday. She is part of a bipartisan group of state attorneys general who announced the larger, multijurisdictional settlement on Wednesday.

The $26 billion national settlement was the result of two years of legal wrangling in the wake of more than 3,000 lawsuits. States, municipalities and tribes blamed the pharmaceutical industry for its contribution to an epidemic of prescription and street opioid abuse that has killed hundreds of thousands of Americans over two decades.

If enough states and municipalities approve and sign onto the extensive national deal, money will be released to help communities pay for addiction prevention and treatment services to mitigate the harm caused by the crisis. The money will be apportioned based on factors like the state’s population and the number of overdose deaths. In return, the states and municipalities will drop the lawsuits against the companies.

In New York, 3,000 people were killed by opioids in both their street and prescribed forms in 2018, according to data from the New York State Department of Health.

“While no amount of money will ever compensate for the millions of addictions, the hundreds of thousands of deaths or the countless communities decimated by opioids, this money will be vital in preventing any future devastation,” Ms. James said in a statement on Tuesday. Payments from the three distributors to New York could start in approximately two months and will be paid out over the next 17 years, according to the attorney general’s office.

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In a statement issued jointly on Tuesday by Cardinal Health, McKesson and AmerisourceBergen, the distributors said they “strongly dispute the allegations at issue in the trial,” but “believe this resolution will allow the companies to focus their attention and resources on the safe and secure delivery of medications and therapies while delivering meaningful relief to affected communities.”

The companies have also agreed to be monitored by a third-party system which will oversee the amount of opioids being shipped to pharmacies across the country, in an effort to prevent oversupply.

The New York lawsuit, filed by the state and Nassau and Suffolk Counties on Long Island and argued jointly, is the first of its kind to go before a jury. It is also the first to encompass the opioid supply chain in its entirety, from the drugmakers who created the pills to the distributors that supplied the medicines to a pharmacy chain where the prescriptions were filled.

After the settlements, only three drug manufacturers, Endo Health Solutions, Teva Pharmaceuticals USA and Allergan Finance, remain at trial in New York. (The pharmacies named in the case, Walmart Inc., Rite Aid Corp. and CVS, were all also excised from the case after settlements.)

Initially, the trial was so extensive that there was not a courtroom large enough for all of the defendants and their teams of lawyers; Justice Jerry Garguilo is hearing the case in an auditorium at a local law school.

Purdue Pharma, the maker of OxyContin, owned by members of the billionaire Sackler family and the company most publicly linked to the opioid epidemic, was initially named in the case, as were some individual Sacklers. But nearly two years ago, Purdue filed for bankruptcy in the face of thousands of opioid-related lawsuits. The bankruptcy process has paused cases against the Sacklers and the drugmaker.

Meanwhile, in Central Islip, the trial against the three manufacturers is continuing.

“Our focus remains on the ongoing trial against the remaining defendants and ensuring they are held accountable for their actions,” Jayne Conroy, a lawyer for Suffolk County, said in an emailed statement.