Opioid Settlement Dollars: Who Is Watching?
In 2021, all opioids litigation by government agencies against the major pharmaceutical distributors and manufacturers was settled. In late 2022, an additional settlement was reached with three pharmacy chains and two other manufacturers. All of these settlements require the defendants to pay significant sums of money to local and state governments. These entities are required to use the funds for projects aimed at abatement of the opioid epidemic. The money has already started to flow into government coffers.
Uses of the Opioid Settlement Fund
The various government entities are allowed to choose how they use their settlement money, but they are required to select various options from a list of abatement strategies. The core abatement strategies that are supposed to be prioritized are:
- Improve access to naloxone
- Provide medication-assisted treatment for opioid addiction
- Expand recovery services to individuals in treatment
- Develop and implement opioid addiction prevention programs
- Expand clean syringe programs
- Collect and analyze data to determine the effectiveness of the state’s abatement programs
However, there is little to no oversight of how government entities will actually use these funds. The descriptions of approved abatement activities are broad in scope and lacking in detail. A government agency might be tempted to divert the funds to another purpose and claim that purpose does fall within the approved abatement activities.
The Tobacco Settlement Fund
There are precedents for such diversions. For example, in 1998, a settlement was reached between several tobacco companies and 46 U.S. states. The tobacco companies agreed to pay money to the states to cover the costs associated with tobacco-related illnesses and to fund tobacco control and public health initiatives. The specific terms of the settlement varied by state, but in general, it involved annual payments to the state over a period of several years. These funds were intended to be used for tobacco-related programs, public health efforts, and other initiatives aimed at reducing smoking rates and addressing the health impacts of tobacco use.
In most states, these funds were not used to mitigate smoking harms. Instead, they were diverted to fill budget gaps and for other uses. Some states actually used the money to support the tobacco industry. For example, North Carolina used 75% of its Tobacco Settlement Fund to benefit the tobacco industry, and South Carolina gave 15% of its Tobacco Settlement Fund to compensate tobacco farmers for a decline in the price of tobacco. Misuse of the Tobacco Settlement Fund by most states continues to this day.
Given this and other precedents, many individuals and organizations are concerned about the lack of any oversight of how the Opioid Settlement funds will be used. The setup of the Opioid Settlement is very similar to that of the Tobacco Settlement, namely, the states are supposed to use the funds for specific purposes but there is no oversight mechanism. There is also no mechanism in place to force the states to comply with the terms of the agreement. Essentially, once they get their hands on the money, they can and will do whatever they want.
In conclusion, New Jersey Senator, Troy Singleton, deserves commendation for championing a groundbreaking bill that has now become law. This significant legislation mandates the establishment of the Opioid Recovery and Remediation Fund, which directs proceeds from opioid settlements towards crucial substance use disorder prevention and treatment programs.
As a testament to their commitment to transparency and inclusivity, the New Jersey Opioid Recovery and Remediation Fund Advisory Council is actively seeking public input through listening sessions to determine the most effective allocation of these funds. Other states would do well to take inspiration from New Jersey’s approach to ensuring rigorous oversight and accountability over these vital resources. Together, we can make a profound impact on the path to recovery and healing.