Kansas reaches settlement with Johnson & Johnson for its role in opioid epidemic

FILE(Steven Senne | AP Photo/Steven Senne)
Published: Jul. 21, 2021 at 3:25 PM CDT
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TOPEKA, Kan. (WIBW) - Kansas has reached a settlement with Johnson & Johnson and three pharmaceutical distribution companies for their roles in the opioid epidemic.

Attorney General Derek Schmidt says Kansas has reached a settlement with a major pharmaceutical company and three opioid distributors as part of its ongoing effort to hold those that fueled the opioid addiction crisis accountable and provide funds to support addiction services.

According to AG Schmidt, the settlement was announced on Wednesday, July 21, and includes Cardinal Health Inc., McKesson Corporation and AmerisourceBergen Corporation, as well as Johnson and Johnson. In addition to financial terms, he said the distributors have also agreed to changes in the pharmaceutical industry to help prevent a similar crisis from happening again. He said Johnson and Johnson will stop selling opioids, will not fund or provide grants to third parties for promoting opioids and will not lobby on activities related to opioids.

Schmidt said the terms of the agreement resolve the claims of Kansas and other states that participated in the lawsuit, as well as local governments. He said states will have 30 days to sign onto the deal and local governments in participating states will have up to 150 days to join. He said the majority of the funding from the agreement will be spent on opioid treatment and prevention.

“We continue to move forward in our efforts to hold pharmaceutical companies and others accountable for the destruction their business practices caused to the lives of Kansans,” Schmidt said. “These settlement negotiations are extraordinarily complex. However, my objective remains simple: Get as much money as possible into the hands of state and local governments, and service providers, in Kansas to pay for addiction treatment as soon as possible – and of course, change corporate behavior to stop the practices that fueled this damage in the first place.”

According to the Kansas AG, the total value of the settlement is about $26 billion. He said each state’s share will be decided by agreement among states using a formula that takes into account the impact of the crisis on the state, such as the number of overdose deaths, the number of residents with substance use disorder, the number of opioids prescribed and the population of the state. He said the state’s share will also be affected by the number of local jurisdictions that decide to join the settlement.

Schmidt said the conditions of Wednesday’s 10-year agreement with the pharmaceutical distributors are as follows:

  • Establishing an independent clearinghouse for tracking where drugs are going and how often.
  • Maintaining a data-driven system to detect suspicious opioid orders from customer pharmacies.
  • Terminating customer pharmacies’ abilities to receive shipments, and report those companies to state regulators, when they show certain signs of drug diversion.
  • Prohibiting sales staff from influencing decisions related to identifying suspicious opioid orders.
  • Requiring senior corporate officials to engage in regular oversight of anti-diversion efforts.

According to Schmidt, the agreement is the latest result of ongoing efforts by his office to compact the opioid epidemic. In February, he said he joined a coalition of attorneys general to reach a settlement with McKinsey and Company, one of the world’s largest consulting firms. He said the settlement resolved allegations the company violated the Kansas Consumer Protection Act by helping opioid companies illegally promote their drugs and profit from the epidemic. He said the state will receive $4.8 million from the McKinsey agreement to be used for drug treatment and addiction abatement.

Schmidt said he has also reached separate agreements with other companies the state believes played a role in fueling opioid addiction.

Earlier in 2021, Schmidt said Kansas legislators approved his proposal to ensure funding recovered through these settlements is used to address addiction and help ensure services are available throughout the state. He said the funding will be available through a grant review board created by the statute. State agencies, local government and not-for-profit entities can also seek funding for addiction treatment and abatement through the board, which is currently being put together.

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