NEW YORK (BLOOMBERG) - Johnson & Johnson has offered to pay US$4 billion (S$5.5 billion) to settle all claims accusing the company of helping fuel the United States opioid epidemic as part of a potentially larger deal involving drugmakers and distributors that could top US$20 billion.
J&J's overture came on the heels of a proposal by distributors McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp to pay US$18 billion to wipe out all opioid suits against those companies, according to people familiar with the pitch. The Wall Street Journal first reported the distributors' offer on Tuesday (Oct 15). The money would be paid out in annual US$1 billion increments, according to the people, who asked not to be identified because the negotiations are private.
J&J and the distributors - which deliver the majority of prescription medications to US pharmacies - made the proposal in talks with a group of state attorneys general, the people said. The proposals came on the eve of the first federal trial in Cleveland over responsibility for the public-health crisis tied to opioids.
Teva Pharmaceutical Industries, another drug manufacturer targeted in the nationwide litigation, offered to give away more than US$15 billion in generic drugs, including those that help fight opioid overdoses, to resolve all of its cases, said the people. That agreement would run over 10 years, the people said.
If all the proposals are accepted, the Cleveland trial likely will be put off, given that the three distributors and Teva are the main defendants, the people said.
In the trial, two counties are seeking reimbursement for the hundreds of millions in tax dollars spent on the fallout from opioid addictions and overdoses.
"As we've stated previously, we remain open to viable options to resolve these cases, including through settlement," Mr Ernie Knewitz, a J&J spokesman, said in an e-mailed statement.
US-based Teva spokesman Kelley Dougherty declined to comment on the proposed deal. Spokesmen for AmerisourceBergen and Cardinal Health, Mr Gabriel Weissman and Ms Brandi Martin, respectively, also declined to comment. McKesson spokesman Sunny Rodriguez didn't respond to requests for comment.
Ms Samantha Fisher, a spokesman for Tennessee Attorney Herbert Slatery, didn't respond to an e-mailed request for comment, sent after regular business hours. Mr Slatery is one of the leaders of the negotiations.
It is the first time J&J has put serious money on the table to end its opioid liability, the people said. The drugmaker agreed earlier this month to pay US$20.4 million to two Ohio counties to avoid a federal trial, but that didn't extend to any other opioid claim. Some analysts say it may take as much as US$150 billion to resolve all the opioid cases on file.