August Policy & Advocacy Update

New Jersey’s Reaction & Response to Opioid Settlement

James Curtin, MBA, LCADC

As New Jersey moves forward in addressing the opioid crisis, it’s essential that we learn from the past to avoid repeating the same mistakes, such as the handling of the tobacco settlement compensation. Getting ahead of and addressing these issues will hopefully allow for the right decisions to be made. According to a recent NJBIZ article, the state of New Jersey is poised to receive $110 million as a part of a settlement agreement that 15 states reached with OxyContin maker Purdue Pharmacy and its owners, the Sackler family. While the decision relies upon the courts next month, approval is definitely expected. The Sackler family plans to pay out $4.5 billion across the states involved in the aforementioned lawsuit.

Outgoing New Jersey Attorney General Gubrir Grewal’s office has alleged that the Sackler family knowingly omitted the truth about the addictive nature of their pain medications, targeted at-risk populations, and profited immensely without considering the repercussions. Grewal himself states, “With their reckless push to drive up profits by saturating society with highly-addictive opioid painkillers, the Sacklers and Purdue Pharma harmed millions of individuals and families in New Jersey and across the country…[T]hese defendants were morally bankrupt before they ever declared actual bankruptcy”.

Many people believe that the opioid epidemic is a relatively new issue, but it actually began in the mid-1990s. This inception was fueled by excessively prescribing opioid pain medication without considering the addictive ramifications. This led to a rapid spike in prescription drug misuse and eventually escalating to heroin use. The CDC reports on three waves of opioid overdose deaths, the overprescription of opioids in the 1990s, the rapid increase in fatal heroin overdoses in 2010, and the onset of fentanyl in 2013. From 1999 to 2019, 500,000 people died from an overdose involving any opioid, including prescription and illicit usage. Prior to the COVID-19 pandemic, we were beginning to see some leveling off of overdose deaths, however, experts expect major setbacks given the devastation many have faced as a result of the pandemic.

This situation feels all too familiar, reminiscent of tobacco settlements in the past. Tobacco settlement dollars were intended to compensate states for healthcare costs from treating smoking related illnesses. The Attorneys General of 46 states, the District of Columbia, and five U.S. territories signed a Master Settlement Agreement (MSA) in 1998. There were also other lawsuits in which all 50 states benefitted, making this a nationwide state of affairs. The MSA was huge: $206 billion was distributed over the first 25 years, but the majority of states did not and still continue not to use the payments as they were originally intended.

New Jersey securitized its future payments for New Jersey’s MSA with the tobacco industry. By securitizing the payments, NJ only received 10% of the full value of the payment stream, due to the state’s dire fiscal condition and wanting the a reduced sum of money upfront in the first years of the settlement. New Jersey was to receive approximately $7.2 billion from the settlement over the course of 20 years, but the State securitized the funds years ago and only received 10 cents on each dollar. The tobacco industry brought up many of the bonds that were securitized, in effect buying back their own future payments to the State, but for a fraction of the cost that they were to pay out over the 20+ years.

So, how do we avoid this same mistake? What must we do with the opioid dollars in New Jersey? The fact that Governor Murphy has just signed a legislative package containing six bills to address the opioid crisis, still running rampant during the pandemic, is a good sign that prevention, treatment, and recovery services are back on the main screen.

As New Jersey moves forward with the opioid settlement, we can hope to see:

  1. The Murphy administration should use any and all tobacco settlement dollars to do the same.
  2. A commission should be established with an eye on clearly not repeating the same mistakes made with the MSA.
  3. The commission should establish measurable goals in conjunction with NJ Department of Human Services leaders aimed at expanding prevention efforts, such as a “silencing the stigma” media program.
  4. Expand accessibility to all levels of treatment where evidence-based practices are consistently employed.
  5. Diversity, equity and inclusion (DEI) should be a top factor in deciding how this money gets spent.
  6. Proven approaches such as the MAT, Peer Recovery services, and the use of evidence-based practices in all levels of care should be at the forefront of using this money.
  7. A major effort is needed to reduce severe behavioral health workforce shortages that existed prior to the pandemic and have been exacerbated by the pandemic.

This opioid settlement is an opportunity for great strides to be made across the state in addressing the opioid crisis, recovery services, and behavioral health. We’ll continue to keep an eye on this situation as it unfolds, but we can only hope the money is used appropriately.

-James Curtin, Chief Business & Government Relations Officer

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