SUMMARY OF PROPOSED OPIOID SETTLEMENTS
On July 21, 2021, Attorney General Daniel Cameron delivered on his promise to fight back against the opioid epidemic by announcing a historic $26 billion agreement with Cardinal, McKesson, and AmerisourceBergen – the nation’s three major pharmaceutical distributors – and Johnson & Johnson (J&J), which manufactured and marketed opioids, for the companies’ role in creating and fueling the opioid epidemic.
Kentucky, along with a broad coalition of states and subdivisions, has joined both settlement agreements with these companies to resolve these legal claims, one with opioid manufacturer Johnson & Johnson and another with the three pharmaceutical distributors: AmerisourceBergen, Cardinal Health, and McKesson.
The two settlement agreements require the distributors and J&J to pay billions of dollars to abate the opioid epidemic, totaling $26 billion over 18 years, with approximately $22.7 billion available for opioid abatement.
If approved, Kentucky's share amounts to more than $480 million and will be distributed pursuant to the terms of House Bill 427, which allocates 50 percent of all proceeds to local governments, with the Commonwealth receiving the other 50 percent. The Commonwealth’s portion will be managed by the Kentucky Opioid Abatement Advisory Commission. To review the details regarding the use and disposition of funds received by the settlements, please see KRS 15.291 and KRS 15.293.
Both agreements contain injunctive relief provisions that govern the marketing, sale, and distribution of opioids. The terms also require distributors to implement additional safeguards to prevent future diversion of prescription opioids, including the establishment of an independent monitor to prevent deliveries of opioids to pharmacies where diversion and misuse occur. The distributors will also be required to establish and fund an independent clearinghouse to track opioid distribution nationwide and flag suspicious orders. J&J will be prohibited from selling or promoting opioids.
These settlements require subdivisions to take affirmative steps to 'opt in' to the settlements. If subdivisions do not act, they will not receive settlement funds and will not contribute to reaching the participation thresholds that will deliver the maximum amount of abatement funds to Kentucky.
In the very near future, your subdivision will need to begin the process of deciding whether to participate in the proposed settlements. We encourage all subdivisions to confer with their attorneys,
review the materials outlined below, and work through this process well before
the January 2, 2022 deadline to join the settlements
as a participating subdivision.
Subdivisions interested in participating in the settlements need to:
Register on the national settlement website, https://nationalopioidsettlement.com/, to ensure your subdivision receives settlement documents.
Review the settlement agreement terms, allocation, and other documents related to the settlement and develop a list of questions for your subdivision's counsel or the Attorney General's Office.
Monitor your email for further communication including a participation agreement, release (if applicable), a model resolution, and instructions on executing using DocuSign.
Materials to Review
We encourage subdivisions to review the following materials:
If you have questions for the Attorney General's Office after reviewing these materials, please contact Blake Christopher at (502) 696-5300 or firstname.lastname@example.org. The terms of these settlements are complex and we want to be sure you have the information you need to make a decision regarding participation in the settlement.