Proposed Opioid Settlement Puts States in a Tough Spot
The $26 billion opioid settlement announced in late July appears at first glance to be a win-win for all parties involved. The deal, yet to be approved by the states, would end a portion of the sprawling, years-long litigation that involves the country’s biggest drug distributors and Johnson & Johnson, an opioid maker. It would also establish tighter controls over the distribution of prescription painkillers, and force Johnson & Johnson out of the opioid business entirely. Most importantly, it would provide a jolt of much-needed funding to the states parceled out over the next 18 years, allowing treatment providers to scale up and possibly expand services that were curtailed due to budget cuts during the COVID-19 pandemic.
Given the scope of the nation’s severe addiction crisis, even $26 billion is woefully inadequate. Over the past decade, more than 500,000 Americans have died of drug overdose, mostly opioid-related; in 2020 alone, there were a record 93,000 fatalities—a 30 percent increase over the previous year. Families and communities across the country have been devastated, and the economic losses are enormous. Today, the opioid epidemic is tearing through the Black and Hispanic populations and threatening inmates in prisons and jails. Deaths from methamphetamines and other stimulants, in addition to synthetic opioids such as fentanyl, have also reached record levels. At the same time, the four companies that agreed to the settlement have funneled a combined $100 billion to shareholders through stock buybacks and dividends.
Thousands of other still-unresolved opioid lawsuits against manufacturers and giant pharmacy chains could eventually boost the compensation package or possibly lead to a global settlement. As it stands, when the current deal is compared with the $206 billion tobacco company settlement in 1998, the multibillion-dollar opioid industry—which egregiously underplayed the addictiveness of its products while deploying devious tactics to encourage their use—appears to be getting off easy. Under the terms of the proposed agreement, no compensation is provided for victims’ families, and companies do not have to admit responsibility for their role in the epidemic. They are also shielded from any further prosecution and liabilities.
Opposition to the deal is growing. Arguing that the settlement amount is too little, and the nearly two-decade payout period is too long, West Virginia, Washington State, and the city of Philadelphia are saying no. It’s a tough spot for states: Faced with an escalating drug crisis, they desperately need more money, but also want to hold the industry accountable. If too many states back out, the amount could be reduced or the deal scuttled altogether, which would also be unfortunate. Now is the time for the federal government to step in and top off the settlement money with an appropriate amount of funding and other resources the massive scale of the crisis demand.