Coming off the heels of its high-profile opioid trial loss, this summer, drugmaker Johnson & Johnson has announced a deal to take a bye during the next trial. This news come only a matter of days after The Wall Street Journal reported that the company—and a half-dozen-or-so other drugmakers—have been developing an unusual strategy for dealing with opioid claims during the expanding litigation process. Effectively, it seems, they have been mounting the claims on the previous deal in which OxyContin maker Purdue Pharmaceuticals filed for bankruptcy, just a month ago.
The new settlement, though, helps give Johnson & Johnson a little room to move. For one, the WSJ story helped shore up shares, by 0.5 percent early on Tuesday and then 1.8 percent later in the day. Oddly enough, the deal helped to pump some life through Johnson & Johnson on a day when the rest of the entire Dow Jones Industrial Average finished the day down.
Specifically, the settlement will have the company pay out a total of $20.4 million to Cuyhoga and Summit counties, in Ohio. This includes $5 million in legal expenses. These two counties were chosen as representative plaintiffs for the “bellwether” trial, which was conducted as part of a bigger, federal multi-district proceeding encompassing approximately 2,000 opioid cases that have been brought forth by local governments.
Now, this “bellwether” trial is set to begin later in the month of October. It is the first trial in the multi-district proceeding and is intended to inform future settlement discussions. Actually, many other companies have already come to, albeit, narrow settlements with these counties, including Allergan (AGN), Endo International (ENDP), and Mallinckrodt (MNK).
Earlier this week, the company released a statement saying, “The settlement allows the company to avoid the resource demands and uncertainty of a trial as it continues to seek meaningful progress in addressing the nation’s opioid crisis. The Company recognized the opioid crisis is a complex public health challenge and is working collaboratively to help communities and people in need.”
In addition, the attorneys said, “This settlement also provides urgently-needed funds to these two counties to support life-saving programs like those treating babies born to mothers addicted to opioids.”
These funds bring the total settlement value brought to these two counties to more than $60 million. However, it should be noted that the settlement does not effectively clear the company of opioid-related litigation liability, so there may be much more to come.