How Are States Administering Opioid Settlement Funds?
Millions of people in the United States misuse opioids, with the Department of Health and Human Services (HHS) estimating that more than 10 million people ages 12 or older struggled with opioid abuse within a recent year. Opioids accounted for two-thirds of drug overdose deaths in the U.S. in a recent year, as well.
Families of those who have succumbed to opiate addiction, local governments, and members of the medical community at large, have been attempting to hold major drug companies accountable for the manufacturing and sale of these addictive medications, citing deceptive marketing practices and improper distribution. A recent settlement among four large U.S. drug companies is a big step forward in making amends.
Here’s what you need to know about the opioid settlement and how states are administering opioid settlement funds.
What happened in the recent opioid settlement?
Four drug companies have recently agreed to pay a cumulative $26 billion to settle a rash of civil lawsuits that revolve around how their aggressive production and distribution of opiate medications—and their marketing of the medications as “non-addictive,” among other allegations—helped perpetuate the opiate crisis. Johnson & Johnson will pay $5 billion, AmerisourceBergen will pay $6.1 billion, Cardinal Health will pay $6 billion, and McKesson will pay $7.4 billion. According to reports, 46 states and 90 percent of local governments are involved in the settlement deal, which puts to rest thousands of lawsuits. The goal of the settlement is to help local communities recover from the damage of the epidemic, and start rebuilding.
Is there a precedent for the recent opioid settlement?
The national opioid settlement is the second-largest in the country’s history, trailing only the $246 billion multistate agreement that was reached with large tobacco companies in 1998. The goal of the settlement is to help states repair damage caused by the opiate crisis, and the terms stipulate that 85 percent of funds must be used to help manage the current crisis, as well as support prevention and educational programs.
How are states administering opioid settlement funds?
States have been allotted differing amounts of money as a result of the opioid settlement, and they are taking various approaches when it comes to allocating these funds. Here are a few examples.
Michigan’s approach to settlement funds
According to a recent press release from Michigan Attorney General Dana Nessel, settlement funds will become available on April 2, 2022 and will start arriving at state and local governments thereafter. The attorney general’s team is registering 277 subdivisions throughout the state to ensure their eligibility to receive funds, which total nearly $800 million. Each county in Michigan is included in the 277 subdivisions, as well as other municipalities that are currently in litigation against the four drug companies, or that have a population of 10,000 or more people. The grand majority of the money will be spent on opioid treatment and prevention.
The Texas approach to settlement funds
The Texas attorney general, Ken Paxton, has announced that his state will receive $1.167 billion in settlement funds to help with the devastation that has been caused by the opioid crisis. The money that the state receives will be distributed over time by a dedicated council, the Opiate Abatement Fund, and Council, to ensure that they are funneled to appropriate places. The people on the council aim to make sure that the money is used to provide treatment services for people with opiate addiction, as well as prevention programs and education.
The Wisconsin approach to settlement funds
Beyond subdivisions and legislative councils, there are other ways that funds are being distributed, too. Wisconsin has enacted legislation that directs funds to its Department of Health Services, which has set up listening sessions to make sure that the community has input on how to allocate its $420 million in funds.
How other states are approaching distribution of settlement funds
Different states have been impacted in different ways by the opioid epidemic, so it follows that each state is taking a slightly different approach when it comes to managing opiate settlement funds. To see how more states are acting, visit the National Academy for State Health Policy (NASHP) website.
How to learn more about the opioid settlement
A national website has been created to provide more information about the national opioid settlement, and how funds are being allocated to each state. Learn more by visiting the site, here.