As a possible $26 billion settlement with opioid producers looms, some public health experts are citing the 1998 agreement with tobacco companies as a cautionary tale of runaway government spending and missed opportunities for saving more lives.
Mere fractions of the $200 billion-plus tobacco settlement have gone toward preventing smoking and helping people quit in many states. Instead, much of the money has helped to balance state budgets, lay fiber-optic cable and repair roads.
And while the settlement was a success in many ways — smoking rates have dropped significantly — cigarettes are still blamed for more than 480,000 American deaths a year.
“We saw a lot of those dollars being spent in ways that didn’t help the population that had been harmed by tobacco,” said Bradley D. Stein, director of the RAND Corporation’s Opioid Policy Center. “And I think it’s critical that the opioid settlement dollars are spent wisely.”
A group of state attorneys general and the companies involved laid out key details of the settlement on Wednesday, a day after lawyers representing local governments nationwide said they were on the verge of settling.
The deal calls for the drugmaker Johnson & Johnson to pay up to $5 billion, in addition to billions more from the major national drug distribution companies. AmerisourceBergen and Cardinal Health are each to contribute $6.4 billion. McKesson is to pay $7.9 billion.
States — except West Virginia, which has already settled with the companies — will have 30 days to approve the agreements. After that, local governments will have four months to sign on. Each company will decide whether enough jurisdictions agree to the deal to move ahead with it.
“While the companies strongly dispute the allegations made in these lawsuits, they believe the proposed settlement agreement and settlement process it establishes … are important steps toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities across the United States,” the distribution companies said in a statement.
Connecticut Attorney General William Tong said it would be the second-biggest cash settlement of its kind U.S. history behind the tobacco deal in the 1990s.
North Carolina Attorney General Josh Stein said the opioid agreement requires state and local governments to use the vast majority of the money on abatement — and that will be subject to a court order. Stein said there’s a strong will to comply because of the devastation from opioids.
“We all are experiencing the consequences in communities across North Carolina, across the country,” Stein said at a video news conference Wednesday.
The deal would be part of the ongoing effort to address the nationwide opioid addiction and overdose crisis. Prescription drugs and illegal ones like heroin and illicitly produced fentanyl have been linked to more than 500,000 deaths in the U.S. since 2000. The number of cases reached a record high in 2020.
If approved, the settlement will likely be the largest of many in the opioid litigation playing out nationwide. It’s expected to bring more than $23 billion to abatement and mitigation efforts to help get treatment for people who are addicted along with other programs to address the crisis. The money would come in 18 annual payments, with the biggest amounts in the next several years.
A group of advocacy organizations, public health experts and others are pushing for governments to sign on to a set of principles for how settlement money should be used. They include establishing a dedicated fund for combating the epidemic with the settlement money and making sure that it doesn’t just replace other funding streams in the budget.
The group has pointed out that many state and local governments have already made cuts to substance use and behavioral health programs because of economic downturn wrought by the coronavirus pandemic. And government officials may be tempted to fill holes in budgets with the money.
Joshua Sharfstein, a vice dean at the Johns Hopkins Bloomberg School of Public Health, said it’s crucial that the money is spent to combat the opioid scourge because the overdose epidemic is raging.
Last year, there were a record 93,000 fatal overdoses from all drugs in the U.S. The majority of them involved fentanyl, a potent synthetic opioid that has medical uses but is also produced illicitly.
“Everybody is both excited and a little worried,” Sharfstein said of the expected funds, “a little worried that they may be squandered.”
Stein, of the RAND Corporation, said it’s important to spend the money on efforts that are proven to be effective, including treating addictions and using drugs to stop overdoses.
“We know treatment works,” he said. “We know naloxone appears to be very important in preventing overdose deaths. … There’s not going to be a silver bullet. It may vary, community by community.”
Looking back to the tobacco settlement, Stein said guiderails were not in place to make sure all of the money was used as it was intended.
“I think, or at least hope, that we have learned from history,” Stein said. “But I think it would be naive to think that, if we took our eye off the ball, that it couldn’t happen again.”