NY Attorney General Reaches $1.1B Agreement with Three Opioid Distributors

New York Attorney General Letitia James announced an agreement with McKesson Corporation, Cardinal Health Inc. and Amerisource Bergen Drug Corporation that will deliver up to $1.1 billion to New York state to combat the ongoing opioid epidemic.

The $1.1 billion agreement is the largest monetary settlement ever negotiated by James. The agreement resolves claims made by James for the role of the three companies in helping to fuel the opioid epidemic and will remove the three distributors from New York’s ongoing opioid trial, currently underway in Suffolk County State Supreme Court.

“For more than two decades, the opioid epidemic has wreaked havoc on countless communities throughout New York and across the rest of the nation, killing hundreds of thousands of our friends and family members and addicting millions more,” said James in a press release issued by her office

As part of the agreement, McKesson, Cardinal Health and Amerisource Bergen will pay New York state a total of up to $1,179,251,066.68, of which more than $1 billion will go toward abatement. Payments will start in two months and will continue over the course of the next 17 years.

The majority of the $1.1 billion payment will be a guaranteed base payment with the remaining funds earmarked as incentive payments to be paid if New York maximally bars, resolves or releases current and future subdivision litigation.

Part of the payment includes New York’s share of a national pot that will be provided to states that did not hire outside counsel. Like most other funds announced, these funds will be used for abatement purposes and will not go toward the state’s general fund.

Finally, any national fund created to compensate private practice attorneys for lawyers’ fees will also be used to pay private attorneys used by New York’s political subdivisions, ensuring the more than $1 billion being announced for opioid abatement will not be allocated to anything else.

“While no amount of money will ever compensate for the millions of addictions, the hundreds of thousands of deaths or the countless communities decimated by opioids, this money will be vital in preventing any future devastation,” James said in the release.

In the context of an anticipated upcoming national settlement, James also negotiated for a change in the way information about opioid orders is collected and employed nationwide. Pursuant to that agreement, McKesson, Cardinal Health and Amerisource Bergen will implement a new process for collecting and analyzing data about opioid orders received by other companies through the creation of a clearinghouse operating under the oversight of an independent third-party monitor.

Specifically, this clearinghouse will pool data from the three distributors in order to allow consistent and aggregated data analysis, giving each distributor the ability to account for their own opioid shipments while simultaneously accounting for the shipments of the other distributors. Additionally, the clearinghouse will use the distributors’ collective data to establish pharmacy-specific opioid shipment limits that each distributor must follow.

The agreement would additionally resolve lawsuits against McKesson, Cardinal Health and Amerisource Bergen by Nassau and Suffolk counties if the county legislatures approve the agreement next month. In the meantime, James plans to make a motion to remove the three distributors from New York’s ongoing opioid trial in state court.

This agreement was negotiated in coordination with a larger global settlement that remains ongoing. While a global agreement still remains under negotiation, if an agreement is reached before July 1, 2022, New York will join that settlement and the terms of this agreement will be folded into that settlement, the press release said.

Source: New York State Office of the Attorney General