Home » KY to receive $483 million from settlement with drug distributors

KY to receive $483 million from settlement with drug distributors

Settlement is second largest in U.S. history, will fund opioid abatement programs

FRANKFORT, Ky. — Attorney General Daniel Cameron announced the historic $26 billion settlement with opioid distributors and a manufacturer has been finalized and will return $483 million to the Commonwealth for programs to address the opioid epidemic.  The agreement settles claims with Cardinal Health, McKesson, AmerisourceBergen, and Johnson & Johnson for the companies’ roles in fueling the opioid epidemic.  The distributors are expected to start releasing funds to a national administrator in April, and money will begin to be distributed to Kentucky and local governments in the second quarter of 2022.

The agreement marks the culmination of years of negotiations to resolve more than 4,000 claims of state and local governments across the country. It is the second-largest multistate agreement in U.S. history, second only to the Tobacco Master Settlement Agreement.

Attorney-General Cameron announced the tentative settlement in July and, after careful review, signed on to the proposed deal on behalf of the Commonwealth in August. Attorney-General Cameron has worked closely with the General Assembly and local government officials to ensure the Commonwealth received maximum funding from the settlement. These efforts led to the passage of HB 427 in 2021.  As a result, the Commonwealth and its local governments will receive a maximum of $483 million over a period of 18 years.

Kentucky’s share of the settlement will be distributed according to the terms of House Bill 427, which provides that local governments will receive 50 percent of all proceeds from the settlement, and the Commonwealth will receive the remaining 50 percent.  The bill was sponsored by Representative Danny Bentley and passed with unanimous bipartisan support by the General Assembly last year. The Kentucky Association of Counties and the Kentucky League of Cities worked closely with the legislature and the Attorney General on the agreement.

The Commonwealth’s portion of the settlement will be overseen by the Opioid Abatement Advisory Commission.  The group is expected to establish a process for eligible opioid abatement programs to apply for settlement dollars.

In addition to the settlement funds, Cardinal Health, McKesson, and AmerisourceBergen will:

  • Establish a centralized independent clearinghouse to provide all three distributors and state regulators with aggregated data and analytics about where drugs are going and how often, eliminating blind spots in the current systems used by distributors.
  • Use data-driven systems to detect suspicious opioid orders from customer pharmacies.
  • Terminate customer pharmacies’ ability to receive shipments, and report those companies to state regulators, when they show certain signs of diversion.
  • Report and prohibit the shipping of suspicious opioid orders.
  • Prohibit sales staff from influencing decisions related to identifying suspicious opioid orders.
  • Require senior corporate officials to engage in regular oversight of anti-diversion efforts.

Johnson & Johnson is required to:

  • Stop selling opioids.
  • Not fund or provide grants to third parties for promoting opioids.
  • Not lobby on activities related to opioids.
  • Share clinical trial data under the Yale University Open Data Access Project.

Click here for more Kentucky business news.