California’s Opioid Settlements and Bankruptcies
California’s Opioid Settlements
In late 2022, California cities and counties received the first round of payments from settlements with opioid manufacturer Janssen Pharmaceuticals, which is a parent company of Johnson & Johnson, and the “big three” distributors: McKesson, AmerisourceBergen, and Cardinal Health (the Distributors). In 2023, California also reached settlement agreements with Allergan and Teva Pharmaceuticals and Pharmacies CVS, Walgreens and Walmart in early 2024. Payments will be made to cities and counties that opted into these settlements.
Funds received from all of California’s opioid settlements will be distributed as follows:
- 15% allocated to the State of California to use for future opioid remediation activities (California State Fund).
- 70% allocated to cities and counties to use for future opioid remediation activities (Abatement Account Fund).
- 15% allocated to cities and counties who filed original lawsuits against opioid defendants, to use for future opioid remediation activities and to reimburse past opioid-related expenses (California Subdivision Fund).
California’s Opioid Bankruptcies
In early 2023, cities and counties in California received the first round of payments from Mallinckrodt Pharmaceuticals, a generic opioid manufacturer that filed for bankruptcy to address their opioid litigation with multiple states. Additional bankruptcies from other opioid manufacturers, including with Endo Pharmaceuticals and Purdue Pharmaceuticals L.P., are pending.
California’s allocation from the Mallinckrodt bankruptcy will be distributed as follows:
- 40% of funds will be awarded to the State of California to use for future remediation activities (National Opioid Abatement Trust II Fund – State Share).
- 60% of funds will be awarded to Local Governments to use for future opioid remediation activities (National Opioid Abatement Trust II Fund – Local Government Share).
