By Corey Carlson
Most states participated in settlements with opioid manufacturers Johnson & Johnson, Teva Pharmaceutical Industries, and Allergan; pharmaceutical distributors AmerisourceBergen, Cardinal Health, and McKesson; and retail pharmacies Walmart, Walgreens, Kroger and CVS. The first national lawsuit was settled in 2021. The total settlement is $26 billion, with $21 billion coming from the distributors and $5 billion from the manufacturers.
Purdue Pharma, perhaps the best known of all the companies for its creation and marketing of OxyContin, had agreed to pay $6 billion as part of its bankruptcy proceedings. But the Biden administration objected to the deal. At its core is the question of whether it’s legal for the Sackler family to gain immunity from future civil cases about the opioid crisis under the company’s bankruptcy deal.
The Supreme Court has decided on the Purdue Pharma case. On June 27, 2024, the court ruled that the bankruptcy court did not have the authority to release the Sackler family from legal claims made by opioid victims. This decision leaves the Sackler’s vulnerable to future lawsuits, and places the $6 billion settlement from the original agreement in a state of uncertainty.
State and local governments are receiving approximately $1.5 billion annually in opioid settlement funds from over a dozen companies that manufactured, sold, or distributed prescription painkillers. These companies were sued for their role in exacerbating the opioid crisis. The current state of lawsuits, in addition to the national settlement has exceeded over $55 billion to be paid to state and local governments over the next 11–18 years.
The urgency of this crisis is underscored by the grim statistic: more than 100,000 Americans die each year from drug overdoses.
Guidelines for spending opioid settlement funds
The spending guidance for these funds is outlined in Exhibit E of the distributor settlement agreement. This document lists core strategies to guide project requests, though it is not exhaustive. Supporting first responders is mentioned 11 times as a priority area.
States are deploying settlement funds through diverse approaches aimed at addressing the opioid crisis and supporting affected communities. Key initiatives include:
- Treatment and recovery services: Expanding access to treatment programs, such as medication-assisted treatment (MAT), counseling, and recovery support services.
- Prevention programs: Implementing strategies to prevent opioid misuse, particularly among youth.
- Naloxone distribution: Increasing access to naloxone, a medication that reverses opioid overdoses, for first responders, community organizations, and the public.
- Harm reduction services: Funding syringe exchange programs and safe consumption sites to reduce infectious disease spread and prevent overdose deaths.
- Public awareness campaigns: Educating communities about the dangers of opioid misuse and available resources.
- Data collection and research: Investing in efforts to understand the crisis better and evaluate intervention outcomes.
- Support for families and communities: Offering counseling and financial assistance for families impacted by the crisis.
Challenges in allocating and monitoring settlement funds
- Lack of Transparency: Only 16 states have committed to publicly reporting the use of settlement funds. Meanwhile, 15 states have not pledged to provide any public disclosures. This lack of accountability hampers efforts to track progress.
- Diverse Spending Priorities: Many jurisdictions focus on treatment and overdose prevention, with some funds controversially supporting law enforcement initiatives like purchasing patrol cars or technology for cracking down on drug trafficking. While some advocate for these measures, others argue resources should prioritize prevention and treatment.
- Unintended Consequences of Industry Reforms: Settlement agreements include provisions to prevent further misuse of opioids, such as limits on marketing and stricter monitoring of pharmacy orders. However, these changes have also made it harder for patients to access necessary medications for chronic pain, anxiety, ADHD, and even opioid addiction treatment.
The path ahead: Addressing unspent funds and setting priorities
Some jurisdictions, such as Washington, D.C., are in the early stages of allocating funds. Other states have yet to spend their state-controlled funds, citing the need for clear spending guidelines. Advocates stress the importance of balancing immediate action with long-term planning to maximize the impact of these resources.
As Shelly Weizman, project director of Georgetown University’s addiction and public policy initiative, notes, “Setting up thoughtful processes now could pay off for years to come. It’s a trade-off between putting out current fires and preventing future ones.”
Enhancing EMS and first responder support
In cases where Narcan or similar medications fail to reverse an overdose, resuscitation equipment becomes essential for patient survival. A surge in funding for resuscitation equipment—such as AEDs, chest compression devices, cardiac monitor/defibrillators, ventilators and airway management tools—underscores the critical role of emergency medical services (EMS) in saving lives. Other EMS projects receiving funding include narcotic management systems and drug identification devices to enhance operational efficiency and safety. These investments are vital as communities grapple with the increasing frequency and lethality of overdoses.
Assistance available
Lexipol has invested and extensively researched the various pathways for requesting settlement funds to address EMS needs. Our team is equipped to guide you in identifying the key decision-makers overseeing the funds and in developing compelling, professional documentation that aligns with the specific guidelines established by your abatement task forces.
Looking to navigate the complexities of grants funding? Lexipol is your go-to resource for state-specific, fully-developed grants services that can help fund your needs. Find out more about our grants services here.