States propose $26 billion opioid settlement with 'Big Three' distributors and J&J

New York(CNN Business) A group of states' Attorneys General announced a proposed $26 billion opioid crisis settlement Wednesday that, if approved, will resolve claims against the "big three" drug distributors — McKesson, Cardinal Health and Amerisource Bergen Drug — as well as manufacturer Johnson & Johnson.

The proposed agreement, if approved by enough state and local governments, would resolve the claims of nearly 4,000 entities that have filed lawsuits in federal and state courts against the four companies, according to a press release from New York Attorney General Letitia James.

The three distributors collectively will pay up to $21 billion over the next 18 years.

Johnson & Johnson will pay up to $5 billion over nine years, with up to $3.7 billion paid during the first three years, according to the release.

The proposed agreement would result in court orders requiring Johnson & Johnson to stop selling opioids, not fund or provide grants to third parties for promoting opioids, and not lobby for any activities related to opioids. It would also prohibits sales staff from influencing decisions related to identifying suspicious opioid orders.

McKesson, Cardinal Health and Amerisource Bergen will be required to share their data with an independent clearinghouse. The distributors would need to account for their own shipments and the shipments of the other distributors to detect, stop and report suspicious orders.

The three companies released a joint statement Wednesday: "While the companies strongly dispute the allegations at issue in the trial, they 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, and will also support efforts to achieve a broad resolution," they said, in part.

Johnson & Johnson released a statement saying it would contribute $5 billion to the settlement, depending on the number of state and local governments that decide to opt into the agreement.

"We recognize the opioid crisis is a tremendously complex public health issue, and we have deep sympathy for everyone affected," said Michael Ullmann, Johnson & Johnson's executive vice president and general counsel. "This settlement will directly support state and local efforts to make meaningful progress in addressing the opioid crisis in the United States."

New York will specifically receive up to $1.25 billion to fund prevention, treatment and recovery programs.

"The numerous companies that manufactured and distributed opioids across the nation did so without regard to life or even the national crisis they were helping to fuel," said James, the New York attorney general.

A total of fourteen states — New York, California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, North Carolina, Ohio, Pennsylvania, Tennessee and Texas — were involved in reaching the proposed settlement agreement, according to the release.

Pennsylvania Attorney General Josh Shapiro said during a press conference, "We collectively took on some of the most powerful companies in the world to fight for you," speaking to the families who have lost loved ones to the opioid crisis.

Cases against Mallinckrodt and Rochester Drug Cooperative will move forward separately through US bankruptcy court.

The trial against the three remaining defendants — Endo Health Solutions, Teva Pharmaceuticals USA and Allergan Finance — is currently underway and will continue in state court.