Court cases against opioid manufacturers are starting to make big bucks for the nation’s hardest-hit states. With potentially billions of dollars coming in, advocates for victims and their families want to make sure the money goes to help the people who need it most.
Opioid makers are dumping hundreds of millions of dollars in state coffers.
The opioid crisis took a toll on many sectors of society. Law enforcement, justice systems, emergency responders, healthcare providers, and treatment facilities had to hire additional staff and find resources to manage exploding numbers of opioid addicts in recent years. Opioids played a role in about 68 percent of the more than 70,200 drug overdose deaths in the United States in 2017, according to the Centers for Disease Control and Prevention.
State attorneys general have gone to court, pledging to hold drugmakers accountable for deceptive marketing and business practices they said contributed to the problem. In the first state opioid case to go to trial, an Oklahoma judge ruled on Aug. 26 that Johnson & Johnson helped fuel the opioid crisis and ordered the company to pay $572 million to the state. Before the trial, two other defendants—Purdue Pharma and Teva Pharmaceutical Industries—settled with Oklahoma for $270 million and $85 million, respectively.
Many similar lawsuits are still unfolding. In Ohio, U.S. District Judge Dan Polster is overseeing the consolidated federal trial of about 2,000 cases from state and local governments against opioid makers. And recent news reports said the Sackler family, which owns Purdue Pharma, is willing to give up control of their business, file bankruptcy, and allow it to become a public beneficiary trust to settle all the lawsuits pending against the company.
Settlements like these don’t have the best track record.
Many news outlets are drawing comparisons to the 1998 settlement 46 states reached with five major tobacco companies. The states wanted reimbursement for the harm tobacco use had caused, and the consolidated case awarded them annual payments from the companies. In December 2018, the nonprofit Campaign for Tobacco-Free Kids reported that in 2019, settlement money and tobacco taxes totaling $27.3 billion will go to state governments, but the states will spend only 2.4 percent of the money on smoking prevention and treatment programs.
“The lesson from the tobacco settlements is that unless the state attorneys general structure the settlements in a way that mandates the money be spent to address the opioid problem, it won’t happen,” said Matthew Myers, president of the Campaign for Tobacco-Free Kids.
His concern seems valid. West Virginia used money from a 2004 settlement with Purdue Pharma to build and remodel gymnasium facilities for its state police academy, and then-Gov. Joe Manchin, now a Democratic U.S. senator, requested $3 million in settlement money for a governor’s helicopter (which he did not get).
Rebecca Haffajee, a professor of health management and policy at the University of Michigan, said opioid settlements are increasingly earmarked with specificity at the outset. That’s a good thing, she told me, “so long as the initial allocations are wise ones that directly improve public health outcomes.” Haffajee noted the opioid crisis cost society massively—from $75 billion in 2013 to almost $100 billion in 2017: “The settlement funds will not cover all of these costs but can make some dent in them.”
So far, states are promising to spend the money helping addicts and those who treat them.
When Purdue Pharma settled with Oklahoma in March, the state’s attorney general, Mike Hunter, announced most of the $270 million would go to Oklahoma State University’s Center for Wellness and Recovery, which works to treat the epidemic. Purdue Pharma will pay $60 million toward litigation costs, and another $12.5 million will fund city and county efforts to recover from the crisis.
Former Ohio Gov. John Kasich recently announced the creation of a nonprofit organization to advocate for settlement funds to go to hospitals instead of state governments. “I don’t want the money to go to fill potholes or to fill a budget gap or something like that,” he said. “I want the money to go to the people who are on the front lines, because they are right up against the wall.”