MONTGOMERY COUNTY – The Montgomery County Legislature Tuesday night will discuss signing onto New York state’s $230 million settlement agreement with opioid manufacturer Johnson & Johnson — a deal that will net the county at least $112,981.
County Attorney Meghan Manion said Montgomery County’s share of the settlement with Johnson & Johnson will range between $112,981 as the worst case scenario and up to $263,673 as the best case scenario.
“This is following the state’s negotiated settlement,” she said. “This is based on a range of things. They looked at what our costs are. We had to submit a number of things in discovery, what our costs from the opioid crisis have been.”
Montgomery County is one of many local governments that joined with New York state and other states in a class-action lawsuit against opioid manufacturers like Johnson & Johnson as well as Purdue Pharma L.P., the maker of OxyContin, one of the opioid drugs credited with sparking the opioid addiction and overdose crisis in the United States.
“J & J contributed to the opioid epidemic by falsely promoting prescription opioids it manufactured and sold and by falsely promoting the increased use of opioids directly and generally through various ‘front groups’ and failing to implement measures to prevent diversion of prescription opioids in connection with distribution of its products, all of which contributed to a public health crisis in Montgomery County,” reads the resolution authorizing the county to sign onto the settlement agreement.
Manion said the key factor in how large Montgomery County’s settlement will be is how many municipalities involved in the lawsuit agree to the terms negotiated by state Attorney General Letitia James. She said Johnson & Johnson’s lawyers negotiated an “incentive” with James to provide larger settlements to local governments based on how many of them agree to the terms of the settlement — the more local governments that agree to the deal, the more money they will all receive.
The Fulton County Board of Supervisors last week unanimously voted to approve signing onto the settlement agreement, with the same potential payout range of $112,981 to $263,673.
Manion said the settlement makes financial sense for Johnson & Johnson because it helps them avoid further litigation with any of the local governments that agree to the deal, and it makes sense for the local governments because it gains them revenue to help deal with the ongoing opioid crisis.
According to the federal U.S. Drug Enforcement Agency database known as the Automation of Reports and Consolidated Order System [ARCOS], between 2015 and 2017 the residents of Montgomery County had just over 800 opioid prescriptions for every 1,000 residents, the highest opioid prescription rate in the state, according to the state Department of Health. During that six-year period, over 13 million pain pills flowed into Montgomery County.
ARCOS reported that between 2015-2017 the worst hit states included parts of West Virginia, Kentucky and Tennessee, where more than 150 pills per person were distributed each year.
In New York state, Sullivan County marked the highest density of pain pills between 2006 and 2012, with the country average of 50 pain pills per resident distributed each year during that time period.
In the Capital Region, Fulton and Schoharie counties both averaged distribution of 32 pain pills per resident each year; Saratoga County averaged distribution of 27 pills per person each year; Schenectady County averaged 25 pills per person; and Albany County averaged 24 pills per person.
Manion said she’s not certain whether the settlement with Johnson & Johnson can make Montgomery County whole for money spent tackling the various costs associated with the opioid crisis, but she thinks the Legislature should accept the deal.
“I do think that it’s certainly worthwhile for the county to settle versus continuing to litigate,” she said. “This is a deal that was negotiated at a pretty high level, so I think the number we’re getting is nothing to sneeze at.”
Manion said the payout from the settlement will occur in annual payments over a 10-year period. She said under the best case scenario of a $263,673 settlement the county will receive the first three payments all at once in February 2022 in the amount of $139,986.
“That’s assuming all incentives are met, that’s the best case scenario,” she said.
Manion said the settlement with Johnson & Johnson does not include Purdue Pharma L.P., which is currently in trial in bankruptcy court to settle the lawsuit it faces from multiple states and local governments including Montgomery County.
Currently a multi-billion dollar settlement agreement with Purdue Pharma is on the table as part of the bankruptcy court action before U.S. Bankruptcy Judge Robert Drain in White Plains, New York.
Purdue Pharma has proposed a settlement plan to transform the business into a company whose profits will be used to fight the opioid crisis. Members of the Sackler family, who own the company, have agreed to give up not only the company but also control of $4.5 billion over time in a deal the company says could be worth $10 billion. The settlement has faced criticism for containing “third-party-releases” providing legal protection for the Sacklers, but Purdue Pharma has said the deal will come off the table without those protections.
The U.S. Department of Justice’s bankruptcy watchdog — the U.S. trustee — opposes the settlement, as does some states, local governments and some of the families of people who died from opioid overdoses they attribute to the reckless marketing of prescription painkillers. The bankruptcy trial proceeding is expected to conclude early next week.
Manion said Montgomery County will likely receive additional money at the conclusion of the Purdue Pharma litigation, whenever that occurs.
“We hope so,” Manion said of the Purdue Pharma litigation. She said the settlement now before the Legislature is only against Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica, Inc.
Information from The Associated Press was used in this story.