Billions of dollars will be flowing to states and localities from opioid lawsuit settlements and court rulings. They need to set up a framework for dedicating the money to programs that save lives.
In a year in which the world’s attention has been fixed on the coronavirus, opioid overdoses and fatalities in the U.S. have continued to increase. The country’s overdose deaths from all drugs exceeded 87,000 in the 12 months ending in September 2020, a 27 percent increase from the previous 12 months that was largely driven by opioids. No state or region has been spared.
However, in the coming months and years, states, cities, and counties will begin receiving funds from settlements and court rulings resulting from numerous lawsuits brought by those governments against drug companies, distributors, and pharmacies over their role in the overdose crisis. It’s money that can — and should — be channeled to programs and services that have proved to reduce overdose deaths and help people with opioid use disorder achieve recovery. While the total amount of the settlements is unknown as cases are still pending, some estimate that state and local governments could receive tens of billions of dollars.
While the settlements will present a valuable opportunity, history provides a lesson about the importance of adopting safeguards to preserve the money for its intended use before it arrives. States received billions of dollars annually as a result of the historic settlement with tobacco companies in 1998. But in the absence of strong requirements that the funds be spent on tobacco use prevention and cessation programs, as originally envisioned, only a small percentage has been used for these purposes.
In the case of opioid settlements, policymakers can prevent a similar diversion by adopting clear policies and plans for use of the funds. As a first step, many decision-makers are considering setting aside their jurisdiction’s settlement money in a dedicated fund. That’s a start, but by itself it’s not enough to ensure that current and future leaders will use the money to make meaningful and sustained progress on opioid use disorder.
Here are three guidelines for policymakers setting up dedicated funds:
- Give priority to evidence-based programs and services proved to work. Through a public, transparent process, policymakers should identify and fund prevention, harm reduction, treatment, and recovery programs that are supported by evidence. Once those programs are set up, officials need to fund and implement a plan to collect detailed data — by geography, race and ethnicity, and other characteristics — to track progress and assess whether the programs are accomplishing their objectives.
- Develop a multiyear budget. Although the number, timing, amount, and duration of payments from the numerous ongoing lawsuits is difficult to predict, one thing is certain: While the money eventually will run out, the prevention, harm reduction, treatment, and recovery programs will need to continue for many years. This means policymakers should take special care to ensure that settlement funds are sustainably allocated. For example, they could use these limited resources for one-time investments, such as telehealth upgrades that could improve care coordination, rather than ongoing expenses.
Furthermore, because the money will be a temporary resource, state and local leaders cannot rely on it as the sole source of funding. Nor should the temporary influx of settlement dollars be offset by reductions or reallocations of current opioid-related spending; otherwise, progress on fighting the overdose epidemic will be impeded. A long-term budgeting process can help with all these challenges by distinguishing between one-time and ongoing expenses and by coordinating and tracking multiple funding streams over many years.
- Publicly track and report spending. To help ensure that settlement money is being used to enhance rather than replace existing funding, officials should disclose opioid-related spending from all local, state and federal sources. This tracking should begin with coordination among agencies at all levels of government to establish a baseline spending level before the settlement money is distributed. That way, policymakers and the public can determine whether year-over-year spending is or is not increasing. In addition to the expenditure figures, officials should also report key metrics related to progress in reaching specific prevention, harm reduction, treatment, and recovery goals. This will provide context and enhance accountability around spending decisions. Online data dashboards and reports are a great way to publicly disseminate this information.
If managed effectively, the settlement payouts could prove to be a big win in the fight to mitigate the opioid overdose crisis. But for that to happen, state and local policymakers need to take advantage of the new money by adopting a framework to invest in evidence-based programs, follow a long-range budget plan and frequently measure spending and results.
Jeff Chapman is a director with The Pew Charitable Trusts’ state fiscal health initiative, and Beth Connolly is a project director with Pew’s substance use prevention and treatment initiative. The guidelines presented here are reflective of the “Principles for the Use of Funds from the Opioid Litigation,” published and endorsed by a coalition of 51 organizations including Pew.
This piece was originally published by Governing on May 7, 2021.