Opioid Crisis Crackdown: Johnson & Johnson to pay $230m to New York State

July 17, 2021

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2 min read

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What's going on here?

Johnson and Johnson (J&J) have agreed with the state of New York to pay $230m (£165m) to settle claims suggesting it helped fuel the opioid addiction crisis in New York.   

What does this mean?

Currently, there are more than 3,000 lawsuits across the US targeting opioid producers and distributors. The lawsuits are demanding that they take financial responsibility for their marketing role within the opioid epidemic which has resulted in nearly 500,000 overdoses in the US over the last two decades. Consequently, J&J, who make a fentanyl patch and a pill, did not acknowledge any liability nor wrongdoing but said that it would “provide… New York… with up to $263m in funding to address opioid-related issues, as well as reimbursement for attorney fees and costs”. 

As a result of this settlement, it will allow J&J to avoid a trial that was meant to begin on Tuesday 29 June 2021. This settlement is consistent with a previous J&J agreement to pay $5bn to settle US opioid cases. Moreover, the agreement effectively blocks J&J from producing and distributing opioids anywhere in New York. New York Attorney General Letitia James commented that despite J&J fuelling the opioid crisis, they are now “committing to leaving the opioid business – not only in New York but across the entire country”. 

What's the big picture effect?

This settlement is hugely significant when viewed in light of the reports that the US opioid epidemic has claimed nearly half a million people’s lives in the last two decades. It has the potential to pave the way for larger pharmaceutical companies to be held accountable for their aggressive marketing techniques, which have inevitably contributed to the opioid epidemic. 

The cost of lawsuits against pharmaceutical firms is only increasing. Therefore, alongside some of the largest US drug distributors (AmerisourceBergen, Cardinal Health and McKesson), J&J have suggested paying a combined $26bn to end opioid lawsuits against the firms. J&J’s agreement is part of a larger global settlement that is ongoing but which has the potential to “end litigation by thousands of additional entities, including all litigation pending by state attorneys general around the nation”. As a result, law firms should prepare themselves for an emerging trend that suggests pharmaceutical firms will attempt to settle out of court before risking liability

Overall, J&J’s out of court settlement could be deemed necessary in light of the rollout of their COVID-19 vaccine. At a time in which the public is already sceptical of big pharmaceutical companies, J&J are walking on a tightrope. Hence, J&J must put the consumer first and protect itself from damaging the reliability of its vaccine and its reputation any further.

Report written by Sofia Antipatis

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