Drug Distributors, Johnson & Johnson Formally Commit to $26 Billion Opioid Agreement

LANSING – Michigan Attorney General Dana Nessel announced today the final approval of the $26 billion opioid agreement with the nation’s three major pharmaceutical distributors – Cardinal, McKesson, and AmerisourceBergen – and Johnson & Johnson. Following successful state sign-on and subdivision sign-on periods, the defendants will start releasing funds to a national administrator on April 2, 2022. Money will start flowing to state and local governments in the second quarter of 2022.

The Department of Attorney General’s team assisting in the State’s portion of the settlements continues to work with participating eligible subdivisions to receive direct payments. Local municipalities will continue to receive information about the settlements as the process unfolds.

“This formal commitment by the distributors and Johnson & Johnson marks a historic day in this country,” Nessel said. “The settlements will equip communities across the nation to better address this crisis – resources that were not previously available but will be absolutely crucial in abatement efforts. Our team is hard at work to assist the registered Michigan subdivisions in this process, and we look forward to working with other stakeholders to maximize the positive impact these dollars will make in our state.”

This historic national agreement marks the culmination of three 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. State negotiations were led by Attorneys General Josh Stein (NC) and Herbert Slatery (TN) and the attorneys general from California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Massachusetts, New York, Ohio, Pennsylvania, and Texas.

Fifty-two states and territories have signed on to the agreement as well as thousands of local governments across the country. In addition to the funds, Cardinal, 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.
• Prohibit shipping of and report 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.

Additional information about the opioid settlements is available on the Department of Attorney General’s website.

Education Investments in the Governor’s proposed FY 2023 Budget: 

• $18.4 billion investment in education—the most in Michigan history.
• Highest ever per-student funding—$9,135 for every kid in every district to improve their classroom experience. More personalized learning, new textbooks and equipment, smaller class sizes, and more extracurriculars, AP, and honors classes.
• A $2,000 bonus for every school employee—teacher, aides, parapros, custodians, administration, bus drivers, cafeteria workers—this fall and another $2,000 bonus for staff that come back to their district in 2023.
• $11,000 in total bonuses for teachers and certified school staff including school social workers and nurses who stick with their districts for four years.

• $1 billion for school construction and renovations. Funds to improve air and water quality and build or refurbish classrooms, cafeterias, gyms, and more. Resources to improve classrooms for students to learn math, science, computer science, and technology.
• Grants to make schools safer for students and staff in the classroom.
• Enhanced support for special education, economically disadvantaged students, rural districts, and English language learners.
• Growing career and technical education to put more young Michiganders on paths to good-paying jobs.
• Free preschool under the Great Start Readiness Program for all eligible 4-year-olds

• Resources to hire and train 10,000 new teachers, hundreds of on-campus mental health professionals.
• Open 40 school-based health clinics to serve 20,000 students.

In July 2021, Governor Whitmer signed the School Aid budget into law which included $723 million to eliminate the gap between the minimum and maximum foundation allowance by setting both at $8,700 per pupil, an increase of $589 per pupil from the current year minimum amount and an increase of $171 per pupil from the current year target amount. In addition, intermediate school districts receive a 4% operational funding increase.

In December 2021, the Michigan Legislature passed a supplemental bill that invests nearly $1 billion in federal funds from the American Rescue Plan into Michigan’s families, communities, and small businesses. The investments made to schools include $150 million for COVID school testing to keep kids safe and learning in-person and $10 million to support teacher recruitment, training, development, and retention.