The settlement ends thousands of lawsuits across the country and pay for addiction and prevention services, according to the New York Times, which broke the story.
Sources close to the settlement say that Johnson & Johnson, which made the opioid painkiller and supplied opium-based ingredients to drug manufacturers will pay back $3.7 billion in the first three years and $1.3 billion over the ensuing six years.
Alongside this, the companies will collectively pay $21 billion in 18 payments over 17 years.
This settlement comes amidst a flurry of recent settlements of the key companies involved in the Opioid drug supply chain, ranging from manufacturers to distributors and dispensers like pharmacies.
Anticipating the $26 billion settlement, McKesson Corp, Cardinal Health and AmerisourceBergen, key pharma distributors, agreed to a $1.1 billion settlement with New York State and two counties according to Reuters.
Johnson & Johnson recently settled a case with New York State and two associated counties, agreeing to pay $230 million.
This comes at a tough time for J&J, with the company also involved in more than 21,800 lawsuits against its talc powder products, which are adjudged to have caused woman users of the product to develop ovarian cancer. Lawsuits that will continue after the Supreme Court rejected an appeal by J&J to overturn the $2.1 billion damage payment.
15 U.S. states dropped their opposition to a bankruptcy plan by Purdue Pharma (though 10 states are still holding out), which would see the company pay back $4.3bn to settle cases relating to Opioids.
In this settlement, the Sackler family would pay an additional $50 million payment according to the BBC.
Purdue Pharma, entered a guilty plea in 2020 to criminal charges relating to its promotion of OxyContin, the drug it marketed despite knowing its addictive traits.
It was ordered by the Department of Justice to pay $8.3bn, resolving serious legal charges from the Opioids crisis but it still faced lawsuits from families and states.
500,000 people died from opioid overdoses in the U.S. from 1999 to 2019 according to the US Centers for Disease Control and Prevention (CDC). Furthermore, 74.7% or 69,710 of overdose fatalities in 2020 were related to Opioids.