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Attorney General Jason R. Ravnsborg

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SOUTH DAKOTA ATTORNEY GENERAL ANNOUNCES $26 BILLION AGREEMENT WITH OPIOID DISTRIBUTORS

FOR IMMEDIATE RELEASE: Thursday, July 22, 2021

PIERRE, S.D. - Attorney General Jason Ravnsborg today announced a historic $26 billion agreement that will help bring desperately needed relief to people across the country who are struggling with opioid addiction. The agreement includes Cardinal, McKesson, and AmerisourceBergen – the nation’s three major pharmaceutical distributors – and Johnson & Johnson, which manufactured and marketed opioids. The agreement also requires significant industry changes to prevent this type of crisis from happening again, and also resolves investigations and litigation over the companies’ roles in creating and fueling the opioid epidemic.  

The agreement would resolve the claims of both states and local governments across the country, including the nearly 4,000 that have filed lawsuits in federal and state courts. Following today’s agreement, states have 30 days to sign onto the deal and local governments in the participating states will have up to 150 days to join to secure a critical mass of participating states and local governments. States and their local governments will receive maximum payments if each state and its local governments join together in support of the agreement.

“The United States saw 93,000 opioid overdose deaths last year,” said Ravnsborg.  “This is a big step on the long path towards making things better for so many individuals and families who have seen their lives torn apart by addiction.  This settlement has the potential to bring approximately $50 million to the people of South Dakota, spread out over the next 17 years, to help our state and help our families who have been affected by the ravages of opioid addiction.”

Funding Overview:

  • The three distributors collectively will pay up to $21 billion over 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.
  • The total funding distributed will be determined by the overall degree of participation by both litigating and non-litigating state and local governments.
  • The substantial majority of the money is to be spent on opioid treatment and prevention.
  • Each state’s share of the funding has been determined by agreement among the states using a formula that takes into account the impact of the crisis on the state – the number of overdose deaths, the number of residents with substance use disorder, and the number of opioids prescribed – and the population of the state.

Injunctive Relief Overview:

  • The 10-year agreement will result in court orders requiring Cardinal, McKesson, and AmerisourceBergen to:
    • 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.
    • Prohibit shipping of and report 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.
  • The 10-year agreement will result in court orders requiring Johnson & Johnson 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.

This settlement comes as a result of investigations by state attorneys general into whether the three distributors fulfilled their legal duty to refuse to ship opioids to pharmacies that submitted suspicious drug orders and whether Johnson & Johnson misled patients and doctors about the addictive nature of opioid drugs.

A previous version of this deal in principle was announced in 2019 and included the opioid manufacturer Teva. Negotiations with Teva are ongoing and are no longer part of this agreement. Today’s deal comes on the heels of previously announced opioid settlements with Purdue Pharma, McKinsey Consulting, Mallinckrodt, and Insys Therapeutics. Combined these earlier matters will generate approximately $6.7 billion for opioid abatement, which in addition to today’s agreement brings the collective opioid efforts of the attorneys general to $32.7 billion. These opioid cases represent the largest attorney general multi-state enforcement actions in history other than the tobacco master settlement agreement.

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The Office of the Attorney General is the chief legal officer for the State of South Dakota and provides legal advice to agencies, boards, and commissions of the State as well as representing the State in state and federal court.  The Office of Attorney General also handles prosecutions, felony criminal appeals, civil matters, consumer protection issues, and issues formal opinions interpreting statutes for agencies of the state.  Visit www.atg.sd.gov to learn more.

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CONTACT: Tim Bormann, Chief of Staff, (605) 773-3215