State to get $483 million from opioid settlement with distributors, Johnson & Johnson
Money coming over 18 years, settlement is second largest in U.S. history, will fund opioid abatement programs
FRANKFORT, Ky. (WTVQ) – A historic $26 billion settlement with opioid distributors and a manufacturer has been finalized and will return $483 million to Kentucky for programs to address the opioid epidemic. The agreement settles claims with Cardinal Health, McKesson, AmerisourceBergen, and Johnson & Johnson for the companies’ roles in fueling the opioid epidemic. The distributors are expected to start releasing funds to a national administrator in April, and money will begin to be distributed to Kentucky and local governments in the second quarter of 2022.
“This historic $483 million settlement provides the Commonwealth with funds to meaningfully address the effects of the opioid epidemic,” said Attorney General Daniel Cameron. “We’ve fought to ensure that the opioid companies are held accountable for their roles in creating this crisis and that Kentucky receives the funding it is due for the harm these terrible drugs have inflicted upon our neighbors, friends, and loved ones. This funding cannot come quickly enough, and we will continue to work closely with the legislature and local governments to ensure the funds are put toward programs that will stop the cycle of addiction and help heal our communities.”
The agreement marks the culmination of years of negotiations to resolve more than 4,000 claims of state and local governments across the country. It is the second largest multistate agreement in U.S. history, second only to the Tobacco Master Settlement Agreement.
The tentative settlement was announced in July and accepted by the state in August. Attorney General Cameron has worked closely with the General Assembly and local government officials to ensure the Commonwealth received maximum funding from the settlement. These efforts led to the passage of HB 427 in 2021. As a result, the Commonwealth and its local governments will receive the maximum of $483 million over a period of 18 years.
Kentucky’s share of the settlement will be distributed according to the terms of House Bill 427, which provides that local governments will receive 50 percent of all proceeds from the settlement, and the Commonwealth will receive the remaining 50 percent. The bill was sponsored by Representative Danny Bentley and passed with unanimous bipartisan support by the General Assembly last year. The Kentucky Association of Counties and the Kentucky League of Cities worked closely with the legislature and the Attorney General on the agreement.
“The opioid epidemic has been personal to me because it has impacted the 25th district so drastically,” said Senate President Robert Stivers. “I and many others have and are working to turn the tide on this crisis, but to be successful, it will take each of us as partners. Today is one more step toward our goal to save lives and help people seek the redemption they need to lead a better life.”
“Today’s news comes as Kentuckians in every community across the Commonwealth struggle to overcome opioid addiction and provides all of us with a glimmer of hope that this scourge may be defeated and the lives of so many restored,” said Speaker of the House David Osborne. “I appreciate the Attorney General’s commitment to this settlement and to Rep. Danny Bentley for ensuring that state and local governments have access to the resources needed for recovery and prevention efforts.”
The Commonwealth’s portion of the settlement will be overseen by the Opioid Abatement Advisory Commission. The group is expected to establish a process for eligible opioid abatement programs to apply for settlement dollars.
In addition to the settlement funds, Cardinal Health, McKesson, and AmerisourceBergen will:
- Establish a centralized independent clearinghouse to provide all three distributors and state regulators with aggregated data and analytics about where drugs are going and how often, eliminating blind spots in the current systems used by distributors.
- Use data-driven systems to detect suspicious opioid orders from customer pharmacies.
- Terminate customer pharmacies’ ability to receive shipments, and report those companies to state regulators, when they show certain signs of diversion.
- Report and prohibit shipping of suspicious opioid orders.
- Prohibit sales staff from influencing decisions related to identifying suspicious opioid orders.
- Require senior corporate officials to engage in regular oversight of anti-diversion efforts.
Johnson & Johnson is required to:
- Stop selling opioids.
- Not fund or provide grants to third parties for promoting opioids.
- Not lobby on activities related to opioids.
- Share clinical trial data under the Yale University Open Data Access Project.
Attorney General Cameron was joined at today’s announcement by State Representative Danny Bentley; Senator Phillip Wheeler; Reagan Taylor, 2021 KACo President and Madison County Judge/Executive; Gary Moore, 2020 KACo President and Boone County Judge/Executive; Brian Traugott, KLC President and Mayor of the City of Versailles; Martin Hatfield, Pulaski County Attorney; and Tayler Niece, Survivor of the Opioid Crisis.