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Opioid Firms Seeking to Claim Billions in Tax Deductions From Addiction Settlement With States

One plans to collect a $974 million cash refund from legal costs under a tax provision Congress included in last year’s coronavirus bailout package.

Four companies due to pay out some $26 billion in compensation for fueling the opioid crisis are planning to recoup around $1 billion each in tax benefits for agreeing to the settlements, regulatory filings show. Johnson & Johnson and three big drug distributors—McKesson, AmerisourceBergen, and Cardinal Health—all updated their financial projections to include large tax benefits stemming from the expected reparations deal. Cardinal Health said this month it planned to collect a $974 million cash refund because it claimed its opioid-related legal costs as a “net operating loss carryback”—a tax provision Congress included in last year’s coronavirus bailout package as a way of helping companies struggling during the pandemic. Prescription drugs kill tens of thousands of Americans every year and the companies stand accused of long ignoring signs they were being steered to people who abused them.