The settlement agreement came just days before opening arguments in a sweeping trial of several defendants, including the company.
Johnson & Johnson will pay New York State more than $230 million in a settlement that also ensures the company will permanently stay out of the opioid business in the United States, the state attorney general’s office announced on Saturday.
The settlement comes at a time when the opioid industry is facing over 3,000 lawsuits across the nation for its contribution to an epidemic of prescription and street opioid abuse that has killed more than 800,000 Americans in the last 20 years, according to the Centers for Disease Control and Prevention.
And it came just days before opening arguments in a sweeping New York trial in which the company was to be among the defendants. That trial will be the first of its kind to go before a jury, and the first to target the entire opioid supply chain, from the drugmakers who manufactured the pills to the distributors that supplied them to a pharmacy chain that filled prescriptions for them.
“The opioid epidemic has wreaked havoc on countless communities across New York State and the rest of the nation, leaving millions still addicted to dangerous and deadly opioids,” Attorney General Letitia James said in a statement. “Johnson & Johnson helped fuel this fire, but today they’re committing to leaving the opioid business — not only in New York, but across the entire country.”
In a statement, Johnson & Johnson said that the settlement was not an admission of liability or wrongdoing and that “the company’s actions relating to the marketing and promotion of important prescription pain medications were appropriate and responsible.”
It has not sold opioids in the United States since last year, when it ceased production of its last opioid product; and it stopped supplying opioid ingredients to other manufacturers in 2016.
Johnson & Johnson is the parent company of Janssen Pharmaceutical Companies, one of the defendants in the New York trial that will be removed from the case because of the settlement. The company will also pay an additional $33 million as reimbursement for New York’s attorney fees and costs. The payments for the total will be made over nine years.
The money is not intended to compensate people harmed by the opioid crisis, but rather for what is known as abatement, mitigating harm and preventing future crises with things like education and addiction treatment programs.
The funds will be distributed to the counties subject to an allocation agreement with the state that is currently being finalized, according to Jayne Conroy, lawyer with Simmons Hanly Conroy, who is representing Suffolk County in the case.
The sprawling opioid case about to begin in New York was filed by the attorney general and by Nassau and Suffolk Counties on Long Island, and is being argued jointly. It includes claims that the companies, like Janssen, misled the public by initially denying the drugs were highly addictive, and aggressively marketed them as such, ignoring warnings of abuse as they chased profits.
The drugs that Janssen developed included a fentanyl patch and a tablet that was crush-resistant, marketed under names like Duragesic and Nucynta, which, according to Johnson & Johnson, accounted for less than one percent of total opioid prescriptions in the United States. It stopped marketing its opioids in 2016 in the United States and later discontinued the fentanyl patch. In 2020, it ceased production of the pill in the United States as well.
For years, Johnson & Johnson had supplied 60 percent of the ingredients that make opioids to companies that used them to make drugs like Oxycodone, contracting with poppy growers in Tasmania. In 2016, they sold the business that supplied the materials.
Johnson & Johnson has struggled under waves of bad publicity. It suffered a defeat in an opioid trial in 2019 when an Oklahoma judge ordered it to pay the state $465 million for its role in the public nuisance created by opioid addiction. It has been ordered to pay millions in courts that have found products like its talcum powder and hip implants to be harmful. Most recently, its coronavirus vaccine has been plagued by a troubled rollout.
The one-shot vaccine was initially seen as a vital tool in combating Covid-19, the disease that causes the coronavirus. But a host of concerns with production and the drug itself has seen the company’s product account for just about 12 million of the more than 320 million doses administered in the United States so far, according to C.D.C. data.
In June, federal health officials paused use of the Johnson & Johnson vaccine after cases of a rare blood-clotting disorder emerged as a side effect. Earlier that month, a mix-up in a Baltimore factory resulted in the government ordering the disposal of 60 million potentially contaminated vaccine doses.
The exit of Johnson & Johnson from the New York case means that two of the country’s biggest drugmakers will now be absent from the trial when opening arguments begin on Tuesday. Purdue Pharma, the maker of OxyContin, owned by members of the billionaire Sackler family and the company most publicly linked to the opioid epidemic, is also no longer standing trial.
Though initially named in the case, as were some individual Sacklers, Purdue filed for bankruptcy nearly two years ago as it faced thousands of opioid-related lawsuits. The bankruptcy process has paused cases against the drugmaker and the Sacklers.
In addition, in the weeks before opening arguments were to be made before a six-person jury and a New York Supreme Court justice, Jerry Garguilo, three of the four pharmacy chains — Walmart Inc., Rite Aid Corp. and CVS — were severed from the case; one of them, CVS, confirmed it had reached a settlement agreement with the counties, the terms of which are not yet final and public. Walmart and Rite Aid did not respond to emails requesting comment.
Walgreens remains one of the defendants that will face a jury next week.
Ms. Conroy, who is representing Suffolk County, cautioned that Saturday’s announcement did not mark the end of the case. “While this settlement is good news, there still remains a crucially important trial starting next week,” she said in a statement.
“We remain focused on ensuring the other defendants who played a major role in creating the opioid crisis are held accountable for their actions,” she said.
Jan Hoffman contributed reporting.
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