A preliminary $26 billion settlement was announced July 21 with Johnson & Johnson and the nation’s “Big Three” opioid distributors: AmerisourceBergen, Cardinal Health and McKesson.
If approved, many South Carolina communities could receive payments as early as the first quarter of 2022 and together would reap as much as $350 million from the drugmakers over the next two decades.
The settlement includes 3,795 communities across the country within 48 states that the opioid epidemic has impacted. Fifty-four of those 3,795 communities are in South Carolina, including Charleston, Berkeley and Dorchester counties. The settlement also includes the city of Charleston, North Charleston, Mount Pleasant and Summerville individually.
Joe Rice, co-founder of the Mount Pleasant law firm Motley Rice LLC, was a lead counsel for negotiations in dividing the settlement among these communities.
Rice and other counsel wanted to create a settlement that could be accepted by different local governments and would work for all of the affected communities, he wrote in a July 21 blog post.
“The agreement announced today isn’t perfect, but it is a way to provide assistance to states and subdivisions if they agree to the settlement, as well as changes in conduct for these companies regarding their handling of prescription narcotics,” Rice wrote.
The opioid distributors were accused of ignoring red flags and failing in their duty to report suspicious orders and the foreseeable black market of addictive opioid drugs.
AmerisourceBergen, Cardinal Health and McKesson have agreed to pay a total settlement amount of $21 billion over 18 years. Through the settlement, the companies would not admit any wrongdoing.
“The distributors may not admit to any wrongdoing, but they agreed to pay $21 billion,” Rice said. “You tell me if you think they’re just being generous.”
Johnson & Johnson will pay $5 billion over seven years, Rice said. The company also agreed to exit the opioid business, he said.
Rice said he supported the settlement.
“The important thing is, with the settlement, the money starts now,” Rice said. “And we need the money now. In delaying the money two to three years while trying to get a trial date, the problem is going to be so much worse. These cases are not guaranteed winners, and they are also extremely expensive.”
The settlement is subject to change and could even be scrapped altogether. States have until Aug. 21 to decide whether they will participate in the settlements. The pharmaceutical companies then have 14 days to each determine if they will proceed with the payment.
If the pharmaceutical companies proceed with the settlement, the 3,795 communities each have 120 days to decide whether they will participate in receiving their portion of the settlement. From there, the participating states and pharmaceutical companies must reaffirm their decision to proceed with the settlement.
If all communities in South Carolina were to accept the settlement, the state would receive approximately $350 million over the next two decades, Rice said. For all settlement recipients, 85 percent of the funds are restricted to abating the opioid epidemic.
“You can’t look at this as to what a small community is going to get,” he said. “These epidemics don’t stay within their zip code. We need help uniformly statewide.”
In the settlement, the companies also agree to significantly change their business operations regarding how narcotics are handled, tracked and analyzed, Rice wrote.
The settlement comes after drug overdose deaths between May 2019 and 2020 increased more than 20 percent in South Carolina, according to the S.C. Department of Health and Environmental Control. Synthetic opioid deaths, in particular, increased about 38 percent from June 2019 to May 2020.
The increases in drug overdose deaths appear to have accelerated during the COVID-19 pandemic, DHEC reported.
“Now, as recently confirmed by new data from the CDC, we have an opioid crisis compounded by a global pandemic, so timing is critical to get assistance to our communities,” Rice wrote in his blog post.
Aside from the settlement, other cases continue against other opioid industry defendants, including pharmacies. This proposed settlement does not resolve these cases working through the court system.
In a separate announcement, the American Medical Association urged advisers to the Centers for Disease Control and Prevention in a letter dated July 16 to overhaul the CDC’s current guidelines on opioid prescriptions.
The AMA holds that current restrictions are "devastating for patients with pain" and have harmed those who suffer from cancer, sickle cell disease and other painful conditions. The group also pointed out that the nation's current opioid epidemic is no longer being driven by prescriptions, but instead by "heroin and illicitly manufactured fentanyl, fentanyl analogs, and stimulants."
