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Alabama reaches $276M settlement with 2 opioid makers, distributor

The State of Alabama has reached settlements with two drug makers and a drug distributor...
The State of Alabama has reached settlements with two drug makers and a drug distributor totaling approximately $276 million, according to Attorney General Steve Marshall’s office.(Source: WSFA)
Published: Apr. 19, 2022 at 1:40 PM EDT|Updated: Apr. 19, 2022 at 6:25 PM EDT
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MONTGOMERY, Ala. (WSFA) - The State of Alabama has reached settlements with two drug makers and a drug distributor totaling approximately $276 million, according to Attorney General Steve Marshall’s office.

The settlements will resolve Alabama’s claims against them for their role in exacerbating the state’s opioid crisis, the AG said in announcing the agreement.

“These three settlement agreements affirm my decision to decline participation in the national opioid settlements, which did not adequately acknowledge the unique harm that Alabamians have endured and would have redirected millions of dollars to bigger states that experienced a less severe impact,” Marshall said.

The AG’s office provided a breakdown of the settlements, which are included below:

  • Endo Pharmaceutical: The State of Alabama and its subdivisions will receive $25 million in 2022 in a lump-sum payment. By comparison, two similarly populated states and their subdivisions settled with Endo for 26% and 35% of the total that Alabama was able to secure. Pursuant to an agreement between Alabama and its litigating subdivisions, Alabama will receive $15 million, less attorneys’ fees, and its litigating subdivisions will receive $10 million.
  • Johnson & Johnson: The State of Alabama and its subdivisions will receive $70.3 million in 2022 in a lump-sum payment. While the State would have received this same amount in the national settlement, it would have been paid out over nine years. The settlement funds will be split 50/50 between the State and its subdivisions.
  • McKesson: The State of Alabama and its subdivisions will receive $141 million over nine years. Under the national settlement, the State would have received only $115.8 million, paid out over eighteen years. The settlement funds will be split 50/50 between the State and its subdivisions.

Terms of the settlement agreement mean the money will be used to remediate the harms caused by the opioid crisis in Alabama, with the state government’s share of each settlement going directly into the General Fund. The AG’s office said the state legislature will work to determine the best uses of the money, and appropriators will have the benefit of reviewing two-and-a-half years of diligent work by the Alabama Opioid Overdose and Addiction Council to determine Alabama’s greatest needs.

“I am grateful to each member of the Alabama Opioid Overdose and Addiction Council who has put in the time and energy to provide our legislators with a roadmap as they make critical decisions about the use of this money,” Marshall said. “We envisioned and developed a State plan long before there was any funding to make it a reality, and I am pleased that we can finally put our plan to good use.”

In addition to the funding for remediation, Alabama also recovered approximately $40 million in attorneys’ fees and costs for the State and its subdivisions.

“Having encountered the utter darkness of the opioid crisis at my own doorstep,” Marshall concluded, “this is one of my most meaningful accomplishments as your Attorney General.”

Alabama still has claims against other opioid makers, which include Purdue Pharma, Mallinckrodt, and Insys in each of their respective bankruptcy cases.

Physicians overprescribing opioids in Alabama has been an ongoing challenge for years. Statistics have shown that Alabama has had one of the highest prescribing rates in the country. The National Institute on Drug Abuse reports that in 2018, Alabama providers wrote 97.5 opioid prescriptions for every 100 people.

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