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Movement on opioid litigation settlements

by José Antonio Esquibel, Director, Colorado Consortium for Prescription Drug Abuse Prevention

Published Nov. 20, 2019

There is good news.

Settlement agreements were recently reached with several opioid distributors and two manufacturers, signaling important steps forward in resolving several significant lawsuits and the prospect of settlement funds being distributed to local and state governments.

Prescription drug distributors McKesson, Cardinal Health and AmeriSource Bergen agreed to a settlement of $21 billion and drug maker Johnson & Johnson agreed to pay $5 billion to settle about 3,200 lawsuits.

Also, legal representatives of local governments recently agreed to a proposed $1.6 billion settlement from drug manufacturer Mallinckrodt.

It is expected that funds from these settlements will go into a national abatement fund and be paid out yearly to local governments for as long as 18 years. There are yet no specific details about when the funds would become available or how much would be received by state and local governments in Colorado.

A settlement with PurduePharma, the manufacturer of Oxycontin, was recently reached with the federal government for $8.3 billion. One provision of this settlement is reorganizing the company as a public trust and using profits to fund opioid and other substance use disorder treatment and recovery services as managed by and distributed through the federal government to states and local governments and organizations.

In preparation for the receipt of settlement funds, Colorado Counties, Inc., and the Colorado Municipal League convened elected officials and their legal representatives for the purpose of preparing a proposed plan for distribution of settlement funds. Their plan is posted online on the Colorado Fair Allocation Plan website.

This plan recommends a distribution of 35% of Colorado settlement funds to go to local governments, 40% of funds to go to shared regional abatement efforts, 10% of funds to go to agreed upon local and state efforts, and 15% direct allocation to state government.

At the same time, the Office of the Attorney General is also working on a proposed plan for distribution of funds with 15% to go to local governments, 35% to go to shared regional abatement efforts, 35% for agreed upon local and state efforts, and 15% direct allocation to state government.

 As local and state elected officials negotiate details for distribution of funds, it is a good time for local organizations and coalitions that are addressing the opioid to inform their local officials about current efforts in addressing the opioids crisis that need to be sustained or expanded with settlement funds, as well as about gaps in services and programs.

Since funds will be available for as long as 18 years, there is the opportunity for long-term planning and support for implementing programs and services to mitigate and reverse the opioid crisis at the local and state levels. A useful planning tool is found in the Colorado Opioid Response Blueprint: A Guide for Opioid Settlement Investments (March 2020).