State, local governments will split settlement with opioid makers

Published 10:13 pm Tuesday, May 11, 2021

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Kentucky Health News

When a global settlement with opioid manufacturers and distributors is settled, Kentucky will allocate half of any proceeds to the state and the other half to local governments – and all of it must be spent to fight the opioid epidemic, under a new law.

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“It’s a victory against the opioid crisis epidemic,” Rep. Danny Bentley, R-Russell, sponsor of the legislation, told Kentucky Health News. “The bill gets the money to people who need it the most.”

This victory is much needed. Preliminary federal data shows drug-overdose deaths in Kentucky rose 50% in 2020, the third highest rate of increase in the nation.

More than 100 Kentucky counties and some Kentucky cities have brought litigation against opioid manufacturers and distributors, as has the state, Bentley said in presenting the bill to a committee in February.

Bentley’s bill lays out the details of the plan. It passed without opposition in the last legislative session and had an emergency clause, so it took effect when Gov. Andy Beshear signed it March 24.

Attorney General Daniel Cameron said the deal, “speaks volumes about what can happen when we put egos aside, when we put our party affiliation aside and say, ‘How we can we best, or how can we be a good neighbor in the midst of these challenges to make sure that we get the dollars and the help that’s necessary to ease this affliction and pain that has plagued our people for too long?’”

Cameron mentioned the bill to Salena Zito of the Washington Examiner in a long interview that touched on many topics. He said it was the result of a collaboration between his office, Senate President Robert Stivers, House Speaker David Osborne, prosecutors, county judge-executives, mayors, and others. “It took some work for us to get together and organize,” he said.

Cameron’s spokesperson said the attorney general’s office started working with stakeholders on the concept for this legislation soon after Cameron took office in mid-December 2019.

The bill places management of any Kentucky settlement in a new Kentucky Opioid Abatement Advisory Commission, comprised of nine volunteer members representing, among others, victims of the opioid crisis, representatives from the treatment and prevention community, and law enforcement.

The bill includes a list of 29 ways the money can be spent, all of them related to either opioid use disorders, a co-occurring substance-use disorder, or mental-health issues related to substance-use disorder. Cameron told Zito that the state plans to maximize any money it gets from the settlement with other federal avenues that exist.

Recipients of the money will be required to submit an annual report that certifies the funds were used consistently with the established criteria, as a way to minimize fraud and abuse, said Bentley

The companies involved in the settlement negotiations are Johnson & Johnson, McKesson Corp., AmerisourceBergen Drug Corp. and Cardinal Health Inc, and possible affiliates or subsidiaries.

The companies are proposing a $26 billion settlement of all opioid suits against them. The deal, which is yet to be finalized, would also give each of the companies about $1 billion each in tax breaks, The Wall Street Journal reported in February.

Cameron told Zito that a requirement of the settlement would be that states, counties and cities that have filed specific lawsuits against the opioid distributors and manufacturers will be asked to give up those claims in exchange for settlement money.

Some states and localities in West Virginia have chosen to opt out of the tentative settlement, including Huntington and Cabell County in West Virginia, where a federal-court trial of the city’s and county’s suit against McKesson, Cardinal Health and AmerisourceBergen began May 3.

“Cabell County’s lawyer, Paul Farrell, has said West Virginia’s portion of the “global” settlement wasn’t nearly enough. The Mountain State’s potential share has yet to be disclosed to the public,” Eric Eyre and Lauren Peace report for Mountain State Spotlight.