Johnson & Johnson's Oklahoma Opioid Penalty Reduced to $465 Million

Date : 11/15/2019 @ 10:15PM
Source : Dow Jones News
Stock : AmerisourceBergen Corp (ABC)
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Johnson & Johnson's Oklahoma Opioid Penalty Reduced to $465 Million

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By Sara Randazzo 

An Oklahoma judge reduced a verdict against Johnson & Johnson by more than $100 million in a closely watched opioid case, an expected move that fell short of the amount the company requested.

State court Judge Thad Balkman said on Friday that Johnson & Johnson must pay $465 million to help alleviate the damage caused by opioid addiction in Oklahoma. Judge Balkman in August had ordered the drug company to pay $572 million after finding it contributed to an opioid-addiction crisis that has killed more than 6,000 Oklahomans since 2000.

In his ruling, the judge said the updated amount, which reflects a mathematical error he previously said he made, is an estimate of one year's worth of treatment and other programs. He rejected a request from Oklahoma to allocate money for 20 years or more of treatment.

Johnson & Johnson said it plans to appeal the ruling, saying it "is neither supported by the facts nor the law."

The opioid lawsuit filed by Oklahoma's attorney general was the first to go to trial out of thousands of similar cases brought by cities, counties and states that claimed drugmakers and distributors are responsible for fueling the opioid epidemic by marketing the drug too aggressively and not providing oversight. Johnson & Johnson became the lone defendant in that trial after two other drugmakers settled with the state.

A second highly anticipated opioid trial slated to take place in federal court in Ohio last month was called off after several drugmakers and distributors agreed to collectively pay more than $300 million to two Ohio counties.

Attention on the topic is next focused on settlement talks led by a bipartisan coalition of state attorneys general who aim to resolve the majority of the opioid lawsuits at once.

Johnson & Johnson has agreed to pay $4 billion as part of those broader talks, but finalizing the deal is still far from certain.

Dozens of attorneys general gathered in Washington this week to discuss the settlement framework, which also includes a proposed $18 billion to be paid over 18 years by three major drug distributors: McKesson Corp., AmerisourceBergen Corp. and Cardinal Health Inc. Another company involved in the talks, Israel-based drugmaker Teva Pharmaceutical Industries Ltd., has agreed to contribute billions of dollars of addiction-treatment drugs and $250 million in cash.

The attorneys general on Thursday spent several hours discussing how settlement money would be shared, according to people familiar with the day's events.

Two proposals that received widespread agreement, the people said, would divvy up the money by state based on factors including population, overdose death rates and the number of prescription painkillers that came into the communities. Just under 2% of the overall settlement amount would also be directed toward smaller states that have been hardest hit by opioid addiction, one of the people said.

One issue the attorneys general are grappling with is antitrust concerns that could surface from Teva donating billions of dollars worth of the generic version of Suboxone, an addiction treatment drug, the people said. Giving away the drug for free could undercut competitors that sell Suboxone and similar drugs, but antitrust specialists are working on a way to ensure the deal can go forward, the people said.

Another ongoing issue discussed Thursday was how much of the settlement would be directed toward paying private plaintiffs' attorneys that represent local municipalities and some states, the people said. The amount that could reach $1 billion.

Some cities and counties, meanwhile, say they feel cut out of the broader settlement talks and want more money out of the companies.

A group of nine large cities and counties, including New York, Phoenix, Houston, Chicago and San Diego, emailed a letter Thursday night to lawyers for the big three distributors expressing concerns with the settlement agreement and how it was reached.

"The current proposed settlement is too little, too late," the cities write in the letter, which was viewed by The Wall Street Journal. Spreading the money over 18 years "does not come quickly enough to make a meaningful contribution to confronting the epidemic we face today."

Cardinal and McKesson declined to comment. Representatives for AmerisourceBergen didn't respond to a request for comment Friday.


(END) Dow Jones Newswires

November 15, 2019 17:00 ET (22:00 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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