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Minnesota state and local governments reach agreement on $300M opioid settlement

In order to maximize award money from a national settlement with drug distributors and Johnson & Johnson, state and local governments had to reach an agreement before Jan. 2 on how to divvy up funds.

Bottles of prescription painkiller OxyContin, 40mg pills, made by Purdue Pharma L.D. sit on a shelf at a local pharmacy in Provo
Bottles of prescription painkiller OxyContin made by Purdue Pharma sit on a shelf at a local pharmacy in Provo, Utah, on April 25, 2017. (REUTERS / George Frey / File Photo)
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ST. PAUL — Minnesota moved another step closer this week to unlocking roughly $300 million from a settlement with Johnson & Johnson and the three major U.S. drug distributors in connection to the nation’s opioid painkiller addiction crisis.

Attorney General Keith Ellison announced Monday, Dec. 6, that the state had reached an agreement with Minnesota counties and cities on how to distribute the state's share of a pending $26 billion national settlement agreement. The state and local governments had to reach an agreement by Jan. 2, 2022, in order to maximize the amount they receive from the national settlement.

Municipal governments will receive 75% of the settlement funds while the state will receive 25% to help pay for opioid addiction treatment and prevention. The most recent estimate from Ellison's office projects Minnesota state and local governments will receive $296 million over the next 18 years.

Minnesota Attorney General Keith Ellison

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The settlement agreement with Johnson & Johnson and the "big three" drug distributors — Cardinal, McKesson and AmerisourceBergen — is just one of several fronts in ongoing nationwide litigation against drug makers, marketers and wholesalers in connection to an epidemic of opioid painkiller addiction across the U.S.

The settlement stems from investigations by state attorneys general from across the U.S. into whether the distributors failed to screen and stop suspicious drug orders, and whether Johnson & Johnson misled patients and doctors about the addictive nature of opioid painkillers.

The Centers for Disease Control and Prevention estimates 38 people died a day in 2019 of prescription opioid overdoses, totaling about 14,000 deaths. Lawsuits filed against drug makers such as Purdue Pharma, the maker of OxyContin, estimate hundreds of thousands of Americans died of opioid painkiller overdoses between 1999 and 2015, while millions became addicted. About 5,500 Minnesotans died as a result of the addiction crisis, Ellison said.

In a statement issued with Ellison's announcement, Pat Baustian, president of the Coalition of Greater Minnesota Cities and mayor of Luverne, Minnesota, noted the addiction epidemic's "devastating impact on families and communities throughout Greater Minnesota," and expressed appreciation for the state's efforts to cooperate with local governments on distributing the funds.

"Although no amount of money can make up for the loss of life, the funding from these national settlement agreements will help our communities provide services and resources to address this crisis," Baustian said.

The state settlement fund will be overseen and distributed by the Opioid Epidemic Response Advisory Council, according to Ellison's office. Under current state law, the state opioid abatement fund distributes to local governments, but the agreement between the state and local governments requires the parties to change the law in the 2022 legislative session, according to Ellison's office.

The local government abatement fund created by the settlement money will be allocated to all counties that participated in the settlement. It will also include municipalities that have a population of 30,000 or more, have a public health department or filed a lawsuit against the defendants in the settlement.

Follow Alex Derosier on Twitter @xanderosier or email aderosier@forumcomm.com .

Alex Derosier covers Minnesota breaking news and state government for Forum News Service.
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