Tribes Reach Landmark Opioid Deal with Johnson & Johnson, Drug Distributors for up to $665 Million

By Meryl Kornfield Washington Post

Hundreds of Native American tribes, devastated disproportionally in the opioid epidemic, tentatively agreed to settle with the country’s three major drug distributors and Johnson & Johnson for $665 million.

Read Article at Washington Post

McKesson, Cardinal Health and AmerisourceBergen would pay $515 million over seven years and Johnson & Johnson would contribute $150 million in two years to the federally recognized tribes, resolving litigation in dozens of states with tribal reservations, according to documents filed Tuesday in federal court in Cleveland. The tribes claim they were saturated by highly addictive painkillers manufactured by J&J and shipped by the distributors without regard for the clear signs of abuse and death. The companies deny wrongdoing, saying they complied with federal drug laws. The funds would be directed to addiction treatment and prevention programs.

The deal, similar to terms reached by the companies with states, counties and cities for $26 billion, also marks a first for Native American tribes that are ofen relegated to the sidelines in mass tort litigation, such as in the Big Tobacco litigation of the 1990s.

“This is epic,” said Lloyd Miller, one of the lead attorneys representing a third of the litigating tribes. “The need is just too great in Indian Country. This settlement is a real turning point in history.”

Johnson & Johnson said in a statement that its “actions relating to the marketing and promotion of important prescription opioid medications were appropriate and responsible,” adding that the drugmaker no longer sells prescription opioids in the United States. Cardinal Health declined to comment. The other two distributors did not immediately respond to requests for comment.

The settlement with distributors includes $75 million they agreed in September to pay the Cherokee Nation in Oklahoma.

The deal comes months before the first federal opioid trial for a Native American tribe, with the Cherokee Nation’s lawsuit against CVS, Walgreens and Walmart being heard in September in Oklahoma federal court. A bankruptcy plan for Purdue Pharma, which is under negotiation, would also set aside settlement money for tribes.

This resolution speeds up the process of getting funds, as the sprawling opioid litigation throughout the country has taken years to reach courtrooms. Overseen by a panel of tribal health experts, the money from this deal would go toward programs that aid drug users and their communities — a help to tribal governments bearing severe financial burdens for the health care, social services, child welfare and law enforcement resources expended during the opioid crisis. About 15 percent of funds will go toward attorneys’ fees.

Nationwide from 2006 to 2014, Native Americans were nearly 50 percent more likely to die of an opioid overdose than non-natives, according to a Washington Post analysis.

“American Indians have suffered the highest per capita rate of opioid overdose and are more likely than other group in the United States to die from drug-induced deaths,” Chairman Douglas Yankton of the Spirit Lake Nation in North Dakota said in a statement. “Given this, the dollars that will flow to Tribes under this initial settlement will help fund crucial, on-reservation, culturally appropriate opioid treatment services.”

“There is no amount of money that’s going to solve the generational issues that have been created from this,” Chairman Kristopher Klabsch Peters of the Squaxin Island Tribe in Washington state told The Post. “Our hope is that we can use these funds to help revitalize our culture and help heal our people.

Miller said that tribal leadership had to weigh possibly earning more money after years of trials and appeals against receiving the much-needed funds within a month of finalizing this deal.

“They’ve got tribal citizens who are suffering and need relief,” he said, “and that factors more than anything in the final calculus.”

For the tribes to receive the full amount from the companies, 95 percent of the litigating tribes must agree to settle, as well as at least 14 of the 17 non-litigating tribes of more than 5,000 members for the distributors’ deal.

A committee representing the litigating tribes will now be tasked with explaining the terms to tribes and their government officials, with the goal of maximizing participation, said Tim Purdon, one of the attorneys on the committee.

“Tribes, for the first time ever, stepped up, exercised their sovereignty, got a place at the table and negotiated a settlement here that is truly historic,” he said. “Now we have to go to our clients, present this deal, and they have to, as sovereign governments, sign off on this.”

Judge Dan Aaron Polster, who oversees the thousands of opioid cases that have consolidated in federal court, said Tuesday that it “was necessary to have separate parallel negotiations and ultimately separate settlement agreements with the three distributors and J&J with the tribes” because the tribes are sovereign nations.

“They had to negotiate separately,” he added.