The proposed agreement, announced by state Attorney General Josh Kaul and the Wisconsin Counties Association on Wednesday, stems from a multistate investigation Kaul joined in March 2019 into the business practices of opioid distributors, as well as litigation brought by cities and counties across the country, including 71 of 72 Wisconsin counties and more than a dozen Wisconsin cities and villages.

The multistate investigation looked into whether opioid distributors fulfilled their legal obligation to refuse to ship opioids to pharmacies that submitted suspicious drug orders and whether Johnson & Johnson misled patients and doctors about the addictive nature of opioid drugs.

The agreement was reached with Cardinal, McKesson and AmerisourceBergen, the nation’s three major pharmaceutical distributors. It comes on the heels of a proposed $4.3 billion settlement agreement that Kaul and officials in 14 other states reached with the Sackler family and their company, opioid manufacturer Purdue Pharma, for prevention and recovery efforts that would direct about $65 million to Wisconsin.

The $26 billion proposed deal announced on Wednesday also includes a settlement with opioid manufacturer Johnson & Johnson, which manufactured and marketed opioids.

“A priority of mine and the Wisconsin Department of Justice in addressing the opioid epidemic is to hold the companies that engaged in unlawful conduct and contributed to the epidemic accountable for their role in the epidemic, both because that’s the right thing to do, but also because the companies made very significant profits in their conduct that contributed to the epidemic, and recovering those resources and getting them to communities in Wisconsin to fight the epidemic is going to help us support efforts to provide treatment and recovery and prevention programs,” Kaul said.

The agreement would resolve the claims of both states and local governments across the country, including the nearly 4,000 that have filed lawsuits in federal and state courts against the opioid distributors.

The agreement only represents one subset of defendants in the opioid litigation, and future settlement agreements with other companies involved in the opioid epidemic, such as pharmacies, are possible.

As part of the agreement, the three opioid distributors will collectively pay up to $21 billion over 18 years, and Johnson & Johnson will pay up to $5 billion over nine years, with up to $3.7 billion paid during the first three years. Wisconsin’s $400 million share, which may fluctuate slightly upon finalization, is determined by a formula that accounts for the state’s overdose deaths, people with substance abuse disorder, opioids prescribed and the population of the state.

The money is intended to be used on opioid treatment and prevention.

The agreement, if approved, would also require Cardinal, McKesson and AmerisourceBergen to provide state regulators with data about where drugs are distributed and how often; detect suspicious opioid orders from pharmacies; terminate pharmacies’ ability to receive shipments when they show signs of diversion; and prohibit shipping of and report suspicious opioid orders.

It would also force the distribution companies to prohibit sales staff from influencing decisions related to identifying suspicious opioid orders.

The 10-year agreement would force Johnson & Johnson to stop selling opioids, not fund or provide grants to third parties for promoting opioids, not lobby on activities related to opioids and share clinical trial data with the Yale University Open Data Access Project.

States have 30 days to decide whether to participate in the settlement. If enough states agree, then counties and cities can accept the terms.

If the agreement is accepted, Kaul and an attorney for the Wisconsin Counties Association said they believe the settlement funds would be distributed according to the terms set out in a law recently signed by Gov. Tony Evers.

Under the law, the state must work with counties on settlements to lawsuits they have filed separately against opioid manufacturers and distributors. The law requires 70% of any settlement to go to local governments and 30% to the state. And all of the money would have to be spent on opioid abuse, no other government programs.