Johnson & Johnson (NYSE:JNJ) says it will pay out a total sum of $4 billion in settlement of all its lawsuits in the US. This is in line with an opioid addiction epidemic that has touched not only the company but others as well.
Details of the litigation settlement
The settlement of the deal will be the best thing to happen to the company this time around, according to one of its officials. It would mean that the 2000 lawsuits ahead of the company will be resolved with immediate effect.
The lawsuits pending before courts allege that the company’s pain-relieving drugs contributed a great deal to the opioid crisis. These drugs included the Nucyta and Duragesic. Back in 2015, this company decided to sell the Nucynta US rights to another company. However, Johnson & Johnson, to date, remains bound by the allegations.
Amounts to be paid out by the companies
The larger deal involves several drugmakers and distributors as well, and the overall payment is expected to be at about $20 billion.
Cardinal Health Inc, AmerisourceBergen Corp, and McKesson Corp were the first ones to decide upon a settlement deal. In their discussions, they thought it wise to pull down all the opioid suits against each of them. If all moves according to plan, they will pay out a total sum of $18 billion.
The parties have also agreed upon the payout strategy. According to sources, they will pay the amount with annual increments of $1 billion. The ongoing discussions are private.
J&J is the company that has been accused of delivering the largest chunk of the prescription medications to its US customers. These are mostly pharmacies. It is worth noting that the settlement deal is between the parties and the state attorneys general.
Drug manufacturer Teva Pharmaceutical Industries Ltd hasn’t been spared either in the ongoing controversy. In a bid to get itself off the hook, the company says it will give away about n $15 billion in the form of generic drugs. This will be a package of drugs that will assist in the fight against opioid overdoses. The agreement will span almost ten years.
The decision by the companies seems to be impacting stocks positively. For example, Teva’s shares have climbed higher by 6%. On the other hand, those of J&J rose by 2.2%.