Legal settlements paid out by defendant companies during the opioid epidemic have a value of nearly $30 billion in 2023 dollars, making the opioid payouts the second largest among all U.S. legal settlements, according to a legal funding company.
High Rise Financial reported that the initial value of the opioid settlements nationwide was $20 billion, but as a result of a 12% inflation rate in recent years, that value has ballooned to $29.1 billion. The payout is second only to the Tobacco Master Settlement, which is now valued at $383.4 billion in current dollars.
West Virginia, the epicenter of the epidemic, is set to receive about $1 billion in settlement funds, according to John Mangalonzo, spokesman for the West Virginia Attorney General’s office. Those funds will be divided up by the West Virginia First Foundation based on a memorandum of understanding developed in association with local governments.
“All opioid funds must be used in a manner consistent with the MOU’s definition of an ‘Approved Purpose,’ which includes things like employing evidence-based treatment strategies for substance-use disorders or addiction, substance-use prevention strategies, law enforcement efforts to curtail drug distribution, supporting addiction recovery programs, or decreasing the oversupply of licit and illicit opioids,” Mangalonzo said in an email to The West Virginia Record.
The opioid legal settlements involved four large U.S. corporations that settled a flurry of recent lawsuits. Legal actions against Johnson & Johnson, AmerisourceBergen, Cardinal Health and McKesson Corp. alleged the companies helped fuel the opioid crisis and led to tens of thousands of fatal overdoses.
J&J will contribute $5 billion over nine years to the settlement. Amerisourcebergen in 2018 agreed to pay $625 million over the repackaging of drugs, Cardinal Health paid $13 million in response to litigation involving False Claims Act allegations, and McKesson agreed to a settlement of $141 million in January in lawsuits alleging price fixing, according to High Rise Financial.
Many observers view the size of such settlements and the number of lawsuits filed against large corporations as evidence that the company’s legal bills are baked into their business models, High Rise Financial said.
In addition to the opioid settlements, J&J is also mentioned in connection with the eighth largest U.S. legal settlement, involving allegations of cancer links with talcum powder. That payout amounted to $6.6 billion in 2023 dollars, according to High Rise Financial.
“With the size of these settlements already seemingly unfathomable, it’s certainly interesting to learn their modern-day value,” a company spokesman said in a prepared statement. “This new perspective highlights the power of civil law in holding massive corporations to account and compensating victims.”