Colorado is expected to receive at least $300 million under a tentative settlement with major drug distributors and a manufacturer for their role in the opioid epidemic, if local governments sign on to the deal, state Attorney General Phil Weiser said Wednesday.
The funding from the settlement, worth $26 billion nationwide, would be paid out over 18 years, with up to $21 billion coming from pharmaceutical distributors Cardinal Health, McKesson and AmerisourceBergen. Johnson & Johnson, which manufactured and marketed opioids, will pay up to $5 billion over nine years, with $3.7 billion “frontloaded” to be paid in the first three years, Weiser said.
Combined with earlier settlements reached with pharmaceutical giant Purdue Pharma and others, the deal brings to nearly $400 million the sum expected to flow to Colorado through opioid-crisis litigation.
States have 30 days to decide whether to sign onto the deal, and the final settlement amounts depend on how many join.
Weiser called the epidemic a “Colorado tragedy” that has its “roots in the boardroom.” He said the state is facing a potentially transformative moment to help people struggling with addiction. Funding from the recently passed American Rescue Plan could supplement the effort.
“It took us 25 years to get into this hole, it will take us time to get out of it. We are giving notice now and we are working with our local government partners to start developing the plans and capacities to spend this money over time,” he said.
The settlement funding will go to support recovery, treatment and other initiatives meant to address the opioid crisis. Money will not go directly to families who have lost loved ones.
“I don’t know that we’re even going to meet the needs of those who are struggling today,” Weiser said. Colorado has about 30% of the drug treatment resources it needs, he said.
The distributors will also have to flag and prevent shipping suspicious opioid orders and create a clearinghouse to provide state regulators with aggregated data about where drugs are going, under the terms of the deal. Johnson & Johnson will be required to stop manufacturing and selling opioids for 10 years.
Michael Ullmann, executive vice president for Johnson & Johnson, said in a statement the company has “deep sympathy for everyone affected” and that the settlement will “directly support state and local efforts to make meaningful progress in addressing the opioid crisis.”
In a joint statement, the three distributors said the proposed settlement would resolve a “substantial majority of opioid lawsuits” filed by state and local governments. However, they “strongly dispute” the allegations in the lawsuits.
Colorado is also expected to receive at least $50 million from a proposed settlement with Purdue Pharma and the family that owns the bankrupt pharmaceutical company.
As part of the deal, Purdue Pharma will make public millions of documents — including its marketing tactics for powerful painkiller OxyContin and attorney-client privileged messages — related to its role in the opioid crisis, and the settlement money will be paid out to Colorado over nine years, the attorney general’s office said earlier this month. In exchange, the state and 14 others agreed to drop their opposition to a bankruptcy plan filed by Purdue Pharma.
Nine other states and the District of Columbia have not signed on to the settlement, which still needs approval from the federal judge overseeing the bankruptcy case.
Weiser said that $50 million would also be shared with local governments to support prevention, treatment recovery initiatives.
Colorado sued Purdue Pharma in 2018, alleging the company’s sales representatives encouraged and manipulated doctors to prescribe higher and higher doses of potentially deadly drugs, helping drive an opioid crisis that’s been tied to nearly half a million overdose deaths in the U.S. over two decades.
More than 7,600 Coloradans have died from an accidental opioid overdose in the past 20 years, the attorney general’s office said.
In 2020, the country saw a nearly 30% yearly increase in drug overdose deaths during the pandemic, according to the attorney general’s office and preliminary data from the Centers for Disease Control and Prevention.
Rural Colorado counties have been particularly affected by the opioid epidemic.
Nearly 21,000 opioid prescriptions were dispensed in Alamosa County in 2015, when the population was 16,700, according to one lawsuit filed by several counties. In Otero County, where the population was 18,300, there were more than 30,200 opioid prescriptions dispensed that year.