States and Cities Near Tentative $26 Billion Deal in Opioids Cases

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The distributors were accused by plaintiffs of having long turned a blind eye to outsized orders. Collectively the companies will pay $21 billion in 18 payments over 17 years. The fees of lawyers, who pursued and financed the costly litigation for years, will be deducted from the total figure and are expected to be paid more quickly than some funds for addiction treatment. The distributors also admitted no wrongdoing and, much like Johnson & Johnson, noted that they were participants in the supply chain for drugs that were federally approved and monitored.

The agreement would compel senior executives among the distributors to play an active role in establishing programs to monitor red-flag pill sales.

In exchange for the payments, the companies are demanding what is known as “global peace” — an agreement by plaintiffs to put down their litigating swords for good. The proposals will be voted on by representatives for 3,022 cases assembled before one federal judge, Dan A. Polster, in Cleveland, and the state attorneys general, who have the power to pursue the defendants in state courts, where several hundred other cases against the companies have also been filed.

The negotiations are being led by lawyers for the local governments as well as the states of North Carolina, Pennsylvania, Connecticut, New York and Massachusetts, among others.

The distributors as well as several manufacturers are in the midst of a trial in a case brought by the state of New York and two of its counties. According to people familiar with the negotiations, the broad $26 billion deal includes a $1 billion settlement that the distributors have negotiated with New York to be released from that lawsuit.

The settlement does not, however, conclude the multifaceted nationwide opioid litigation, in which the first cases were filed in 2014. Other manufacturing defendants have yet to reach such deals, like Purdue Pharma and Mallinckrodt, which have proceedings in bankruptcy court, and Teva and Allergan, which are on trial. Cases against pharmaceutical chains, such as CVS Health, Walgreens and Walmart, are even farther back on the runway.

But compared to October, 2019, when four attorneys general announced the first iteration of a brokered plan, the latest offering includes more money, particularly for lawyers, and a clearer allocation structure to deliver settlement money to states and localities.

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