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How Not to Spend an Opioid Settlement

  • 1Bloomberg School of Public Health, Johns Hopkins University, Baltimore, Maryland
  • 2Institutes for Behavior Resources Inc, Baltimore, Maryland

With fatal overdose numbers remaining unacceptably high in 2019, an important story in 2020 will be the outcome of litigation against opioid manufacturers and distributors. Signs point to settlements in lawsuits brought by cities, counties, and states as well as to distributions from the bankruptcy case of Purdue Pharma. Billions of dollars are at stake.

Two decades ago, state litigation against tobacco manufacturers concluded with a $200 billion settlement. In the ensuing years, however, less than 10% of this funding found its way to tobacco control efforts. Instead, states paid debts, paved roads, and reduced taxes. This time around, it is expected that courts and litigants will try to limit the use of the funds to purposes related to opioids and addiction. Even if they succeed, there are 5 mistakes to avoid in how settlement funds are used.

Mistake 1: Permit the Use of Settlement Funds to Repay Past Spending or Replace Current Funds

Given strained budgets for social services, police overtime, crowded jails, and exhausted coroners, it is no secret why governments are suing companies whose greed—and, in a number of cases, illegal activity—paved the way for the recent addiction crisis. As part of the litigation, plaintiff’s attorneys have asked their clients to estimate the costs they have borne and are bearing as a result of the alleged misdeeds. Some see a settlement as payback.

Such an approach, however, would leave the overdose crisis largely intact. The US Centers for Disease Control and Prevention is reporting that the death toll from all substances has stabilized at around 67 000 per year over the last several years (about two-thirds related to opioids), with the total number estimated to decline just 1.4% in 2019. Settlement funds should be used to bend the curve.

Mistake 2: Spend the Settlement Funds Right Away

After the tobacco settlement, some states turned to financial firms for up-front funds worth a fraction of the total payout. These states turned around and spent their entire settlement immediately, squandering the chance to invest in programs for the long-term.

The same danger exists with the opioid litigation. Even if the settlements impose requirements for new spending, states might seek to take what they can get up front and spend it now for maximum immediate effect. What this approach misunderstands is that many of the harms of the epidemic do not have quick fixes. Addiction is a chronic illness, and effective treatment is often required for many years.

Similarly, at-risk families need comprehensive support for years, and efforts to build resilience and change the environment for youth will be more effective the longer they are sustained. A smart move would be for litigants to reserve a major share, say at least one-third to half, for prevention efforts needed over the next decade or more.

A portion of these funds should be reserved for efforts to reduce the stigma of addiction and encourage young people at risk to seek help sooner.

Mistake 3: Spend the Settlement Funds on Programs That Are Ineffective

A major challenge with the opioid epidemic is that some people advocate in good faith for solutions that evidence demonstrates are more likely to cause harm than to help. For example, detoxification programs reduce opioid tolerance and leave individuals at higher risk for overdose. The market for residential treatment is rife with expensive programs that fail to offer access to medications, including methadone and buprenorphine, which reduce the risk of death substantially. Enhanced enforcement efforts aimed at people who use drugs have little evidence to support them and may drive the problem underground. Using settlement funds for these purposes will backfire.

More generally, leaving decisions on a settlement to a popularity contest is a risky proposition. A better approach is to establish a strong public process to bring together evidence of what works with experience from those most affected by the crisis.

Political leaders should consider empowering a small group led by public health experts to set out options (and the evidence for each), seek public comment, produce a draft set of recommendations, seek more public comment, make additional changes, and then release a plan. Such an approach has been helpful to the development of effective opioid strategies in just a few months at the state and local levels.

Public vetting of spending options should pay special attention to urgently needed but often less-understood investments. At the top of this list is support for individuals who are injecting drugs and are at the highest risk for overdose and major medical complications. Programs to distribute naloxone, identify fentanyl, provide sterile syringes, and connect people to decent housing will have an immediate effect on overdose rates and the harm that drug use is causing communities around the country. Outreach and overdose prevention programs that offer a rapid on-ramp to treatment with effective medications, such as those available in other nations, are especially promising.

Other promising ideas include expanding and strengthening the Medicaid program, enforcing parity rules on private insurance payment, and building quality systems for addiction services for the long run.

The funds can be used to spark systems to change for the better. For example, instead of just sending funds to an emergency department to hire peer recovery workers, a jurisdiction can require that the emergency department offer immediate access to treatment as a condition of receiving funds for peer recovery workers.

Mistake 4: Ignore Communities of Color That Have Been Deeply Harmed by the “War on Drugs”

It is no secret that the nation paid more attention to the recent opioid crisis as it became clear that those affected included suburban, rural, and white families. Minority communities have experienced drug crises for decades, with the predominant response being criminalization.

It may seem logical to allocate funding from the pharmaceutical settlements to areas of the country with the highest prescribing rates for opioids. Such an approach, however, would ignore the fact that diverted pills often found their way to urban centers, and the rise in opioid addiction led to rapid growth in the market for heroin and other illicit drugs. In the city of Baltimore, for example, heroin overdoses had fallen dramatically as a result of treatment expansions before spiking upward during the recent crisis. Equitable distributions of resources should support all communities affected by opioids, particularly those that had limited access for many years to new resources for prevention, treatment, and community development.

Mistake 5: Spend the Settlement Funds Without Evaluation or Monitoring

Even the best-run process may yield a set of investments that fall short. The reasons for failure could include rapid changes to the epidemic itself (such as the recent rise in methamphetamine overdoses), inadequate attention to implementation or equity, misguided policies, or misjudgments in the kinds of programs that will have an effect in specific communities.

The essence of a public health approach is not letting go of a problem until it is solved. Core to public health is a commitment to revisit a problem with clear-eyed assessments and evaluations of what is happening on the ground, what is working, and what is not.

Some states and localities have already set up systems to oversee the response to the opioid crisis and are better positioned to make use of new funding. Others should stand up and support management efforts committed not just to projects, but to progress.

States and localities will get one chance to use settlement funds wisely. Avoiding these mistakes is a good place to start.

Article Information

Open Access: This is an open access article distributed under the terms of the CC-BY License.

Corresponding Author: Joshua M. Sharfstein, MD, Bloomberg School of Public Health, Johns Hopkins University, 615 N Wolfe St, Baltimore, MD 21205 (

Conflict of Interest Disclosures: Dr Sharfstein reported serving as an unpaid expert witness in Baltimore City’s lawsuit against opioid manufacturers. Dr Olsen reported serving as vice president of the American Society of Addiction Medicine (ASAM); receiving an honorarium from ASAM and Providers’ Clinical Support System for providing trainings on addiction treatment; and receiving salary support for treating patients with opioid use disorder. Drs Sharfstein and Olsen are coauthors of, and receive royalties from Oxford University Press for, The Opioid Epidemic: What Everyone Needs to Know (2019).

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