Opioid Settlement: An Introduction
In part three of our continuing series of articles detailing some of the lesser known or understood funding sources we find invaluable for our clients, we’re introducing you to relatively new funding source, the Opioid Settlement.
Understanding the Opioid Settlement
The opioid crisis in the United States is a public health emergency that has claimed hundreds of thousands of lives due to overdoses from prescription and illicit opioids. In response to this devastating epidemic, a series of lawsuits were filed against pharmaceutical companies, distributors, and retailers. Similar to the Tobacco Settlement we wrote about in our last article, these lawsuits allege that these entities contributed to the opioid crisis by engaging in misleading marketing practices, failing to monitor suspicious orders, and prioritizing profits over public safety. The culmination of these legal battles is what's known as the "opioid settlement."
The Opioid Epidemic
Before delving into the settlement, it's crucial to understand the scope of the opioid epidemic. Beginning in the late 1990s, there was a significant increase in the prescription of opioid pain relievers, fueled by reassurances from pharmaceutical companies to the medical community that patients would not become addicted to these medications. As a result, widespread misuse of both prescription and non-prescription opioids ensued, leading to a surge in addiction rates and overdose deaths.
The Legal Battles
The lawsuits against opioid manufacturers, distributors, and retailers are numerous and complex. They involve multiple states, counties, cities, Native American tribes, and private plaintiffs who claim these companies played a significant role in creating and prolonging the opioid crisis. The central accusation is that these companies engaged in deceptive marketing strategies that downplayed the risks of addiction and overstated the benefits of opioids for pain
management. Additionally, distributors are accused of ignoring red flags indicating that opioids were being diverted to illicit channels.
The Settlements
The term "opioid settlement" refers to various agreements reached between the plaintiffs and the accused companies. These settlements aim to provide billions of dollars in compensation to affected parties and to fund efforts to combat the opioid epidemic, such as addiction treatment and prevention programs. Here are some key points about the opioid settlements:
The Parties Involved
The settlements involve some of the largest pharmaceutical manufacturers like Purdue Pharma, the maker of OxyContin, and Johnson & Johnson. Major distributors such as McKesson, Cardinal Health, and AmerisourceBergen are also part of these settlements, along with national pharmacy chains.
The Financial Aspect
The settlements involve substantial financial compensation. For example, Purdue Pharma filed for bankruptcy and agreed to a settlement that could provide more than $10 billion to address the crisis. Johnson & Johnson and three major distributors reached a $26 billion settlement to resolve thousands of opioid-related lawsuits. These funds are allocated to the plaintiffs to support opioid abatement efforts. In total, the Opioid Settlement exceeds $50 billion.
The Distribution of Funds
The distribution of settlement funds is a complex process that involves determining how much each state, local government, or other entity will receive. The allocations are typically based on the impact of the opioid crisis in each area, considering factors like the number of opioid-related deaths and the extent of opioid prescribing.
Controversies and Challenges
The settlements are not without controversy and challenges. Some argue that the amounts agreed upon are insufficient compared to the damage caused by the opioid crisis. Others express concern that the money may not be used effectively to combat the epidemic. Additionally, there are disputes among states and local governments over the allocation of funds, and some believe that the companies responsible should face stricter consequences.
Stay Tuned
The opioid settlements represent a significant step in addressing the immense public health challenge posed by the opioid crisis. And, a substantial portion of these funds will flow in the form of grants, but many of these programs are in their infancy. We are monitoring these funds closely and will continue to update you on opportunities as these funds become available. The funds from the settlements are intended to provide much-needed resources for recovery and prevention initiatives. Keeping up with which entities are receiving settlements and how the funds are being granted is proving to be extremely complex. We are focusing a lot of our resources on this effort and will continue to educate our community about this topic.