June 16, 2024
Opioid Settlements

The Year in Opioid Settlements: Key Insights for 2023

State and local governments across the United States have received approximately $1.5 billion in settlements this year from more than a dozen companies involved in the manufacturing, sale, or distribution of prescription painkillers. These settlements are a result of lawsuits filed against these companies for their contribution to the opioid crisis. The funds from these settlements have become a vital resource in addressing addiction and its impact on communities, with more than $50 billion expected to be paid over the course of nearly two decades.

However, it is important to note that while these settlements are a significant step towards addressing the opioid crisis, the number of drug overdoses in the country has continued to rise, with over 100,000 deaths annually. As we approach the end of the year, here are five key insights to keep in mind:

The total amount of settlement money received by state and local governments is subject to change as settlements continue to evolve. At the beginning of the year, national settlements had already been reached with five companies, and several other settlements were in their final stages. Currently, most states are involved in settlements with major manufacturers such as Johnson & Johnson, Teva Pharmaceutical Industries, and Allergan, as well as distributors like AmerisourceBergen, Cardinal Health, and McKesson, and retail pharmacies including Walmart, Walgreens, CVS, and Kroger.

However, there have been disruptions and setbacks in some of these settlements. Mallinckrodt Pharmaceuticals, for example, originally agreed to pay $1.7 billion, but due to a second bankruptcy filing, $1 billion was slashed from that amount. Similarly, the settlement with Purdue Pharma, known for their creation and marketing of OxyContin, is facing legal challenges. The question of whether the Sackler family, who owns Purdue Pharma, can gain immunity from future civil cases related to the opioid crisis under the company’s bankruptcy deal, is currently before the Supreme Court.

Transparency and oversight regarding the use of settlement funds have been a point of contention. In Ohio, a local advocacy group sued the OneOhio Recovery Foundation for violating public records and open-meeting laws. Although the judge ruled in favor of the group, the state passed a budget exempting the foundation from these requirements. Similarly, the Department of Health and Human Services in Michigan faced criticism for not publicly reporting how settlement funds were being spent. Concerns have also been raised at the national level, with a dozen Democratic lawmakers calling for greater transparency and oversight in the use of these funds.
While there is no national data on how settlement dollars are being spent, several common areas of allocation have emerged. Treatment programs have been a major focus, with many jurisdictions investing in residential rehab facilities, expanding access to care for uninsured individuals, and increasing the number of clinicians prescribing medications for opioid use disorder. Another area of allocation is naloxone, a medication used to reverse opioid overdoses, with Wisconsin and Kentucky dedicating millions of dollars to this effort. However, there have been debates and controversies surrounding the use of funds for law enforcement tools and school-based prevention programs. Some argue that these investments are essential, while others believe they do not directly address the ongoing crisis.

The settlements have also led to unintended consequences. As part of the settlements, companies agreed to change their business practices, such as limiting the sale and promotion of opioids. However, these changes have had broader effects, with stricter limits being placed on the sale of other potentially addictive medications. This has resulted in increased cancellations of prescriptions and difficulties in accessing medications for chronic pain and addiction treatment.

Many states and local governments have yet to decide how to allocate the settlement funds. Some states, including Montana and Hawaii, have not yet spent any of the funds, while others are still in the process of identifying priorities and developing processes for awarding grants. This slow pace has frustrated advocates who emphasize the urgent need for action. However, others argue that taking the time to establish thoughtful processes now will have long-term benefits in preventing future crises.

Overall, while the opioid settlements have provided much-needed funding for addiction prevention and treatment, there are still challenges to overcome. Transparency and oversight are critical to ensuring the proper use of these funds, and careful consideration is needed to allocate resources in ways that effectively address the ongoing opioid crisis. As we look towards the future, it is important to strike a balance between immediate action and long-term prevention to create lasting change.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it