For groups fighting U.S. opioid crisis, settlement money can be hard to come by

By Brendan Pierson and Disha Raychaudhuri

(Reuters) – Companies accused of fueling the U.S. opioid crisis have so far paid out more than $3 billion to compensate states, but has any of the money reached the people who need it? It depends where you live. Yes, if you’re in Massachusetts; no, in Texas.

A series of landmark settlements since 2021 with top drug distributors, pharmacies and drugmakers including Johnson & Johnson (NYSE:) set compensation at a total of more than $50 billion nationwide.

More than 900,000 people have died of drug overdoses in the United States since 1999, with opioids playing an outsized role, according to data from the U.S. Centers for Disease Control and Prevention. State and local officials have touted the settlements as providing desperately needed relief to communities hit hard by the crisis.

But when the money will be paid out, and who will get it, remains far from clear, Reuters has found. And many of those who have been working with opioid addiction for years, through a patchwork of non-profit treatment and aid organizations around the country, say they are still in the dark about how, and whether, their work will benefit, according to a series of interviews over the last several months.

Reuters reached out to all 50 states and the District of Columbia to ask whether they had a process for non-governmental organizations to apply for funding from the settlements. It also looked for information available online about funding applications.

Reuters received responses, or was able to locate information online, for 40 states and the District of Columbia. Of those, the news agency could only confirm that 16 had central, state-wide, publicly available processes for organizations to apply for funding.

Some of the remaining states, including Maryland and Illinois, said they planned to open an application process soon. Others offered no specific details about future plans. Arkansas has adopted a unique model; although the state does not have a funding application process, two thirds of its settlement money is going to a partnership of state and local governments, which does have such a process.

Among the states where money is already reaching organizations on the ground are Massachusetts, Kentucky and Arizona.

“The need to get this money out the door and start making a dent in the crisis has never been greater,” said Brandon Marshall, a professor of epidemiology at the Brown University School of Public Health who serves as an advisor to the committee overseeing Rhode Island’s settlement. “I don’t quite understand why some states and jurisdictions are taking so long to even create a process.” (Rhode Island is disbursing settlement funds through a rolling series of application processes targeted at specific kinds of interventions.)

In Massachusetts, which according to data from the state has received more than $129 million as of this month, funds have already begun flowing, some through a public grant application process.

According to a public summary released after a December meeting of the advisory council overseeing the state’s settlement, the state has allocated $3.4 million toward purchasing the overdose reversal drug naloxone, $1.2 million toward methadone treatment programs and $5 million toward organizations that provide long-term housing to people struggling with addiction. The state has also pledged $15 million to repay student loans for health care workers who deal with addiction treatment, and continues to evaluate additional grant applications.

“I think Massachusetts is doing an outstanding job,” said Julie Burns, CEO of RIZE Massachusetts, a non-profit that funds efforts to combat the opioid epidemic “Their process has been very open.” (RIZE itself has not received settlement funding.)

The fate of Texas’s share, more than $270 million received to date beginning in December 2021, is less clear. The state legislature this year appropriated about $22 million for government agencies for 2024 and 2025, and has posted an online form for organizations to register as potential funding recipients.

But the state said it does not expect to open up grant applications until later this year or early next year.

“Texas spends funds wisely, not quickly,” Chris Bryan, a spokesperson for the office of Texas Comptroller of Public Accounts Glenn Hegar, said in an email, adding that the state was seeking to avoid fraud and abuse of the money. He also noted that the state legislature, which only meets every other year, was not in session in 2022, pushing decisions on spending into this year.

Lisa Ruzicka, a coordinator at Kansas-based addiction recovery non-profit Valley Hope Foundation, said that tracks her experience. While Valley Hope, which operates in seven states, has successfully obtained a grant from Arizona and been in touch with other states, it “has been really hard to figure out” how Texas’s grant process works, Ruzicka said.

“I’ve had a call in to the Texas attorney general for some time, and you just can’t get anybody to give you answers,” she said. The attorney general’s office did not respond to a request for comment.

DIFFERENT STATES, DIFFERENT STRUCTURES

The opioid settlements stem from thousands of lawsuits brought by state and local governments around the country, beginning in 2017, against drug manufacturers, distributors and pharmacies – the largest such mass litigation on behalf of the public since states sued tobacco giants in the 1990s.

Most of the settlements were nationwide agreements, though some state and local governments opted out and struck their own separate deals. The settling companies include the three largest U.S. drug wholesalers, drugmakers Johnson & Johnson and pharmacy operators Walgreens Boots Alliance (NASDAQ:) Inc.

Most states share a significant portion of their total settlement funds with their city and county governments, which make their own independent decisions about how to spend.

The lack of clarity, so far, about how the money will be spent is reflected in the experiences of more than a dozen advocates and workers dealing with opioid addiction who spoke to Reuters for this story.

North Carolina has been widely praised for its transparency around opioid settlement funds, of which it has so far received more than $93 million, thanks to stringent requirements for local governments, which will receive 85% of the money, to report their spending decisions and an online dashboard where the public can track them. The state’s Department of Health and Human Services has already awarded more than $15 million in grants through a competitive application process.

Even there, however, the current state of settlement spending plans is not always clear. Associate director Lauren Kestner of the Charlotte-based Center for Prevention Services, which has been awarded an $800,000 state grant, praised the state’s approach overall but said some counties have yet to reveal much about their plans, and that organizations like hers have had to rely on established relationships with officials for information.

“Those of us who have been able to get to the table have had to work” to get there, she said.

Tricia Christensen, director of policy at Community Education Group, a regional organization covering Appalachia, also commended states like Massachusetts and North Carolina but said that in others – she named Mississippi and Alabama – addiction treatment workers on the ground have “no idea what’s happening.”

A spokesperson for the Alabama Attorney General’s office said the state’s spending was up to the legislature, and that all of the funds would be used to fight the opioid crisis. Mississippi officials did not respond to Reuters inquiries for this article.

Mississippi – uniquely among the states – has pledged fully 70% of its $203 million share of the distributor and J&J settlement to a single recipient, the University of Mississippi Medical Center. It did not respond to a request for comment about how it planned to spend the money.

Another crucial part of the story is that settlement funds can be used for so-called harm reduction, such as providing clean syringes and test kits for fentanyl, which has not been allowed for federal government funding in the past. Even some conservative states, where harm reduction has been controversial, are becoming more open to the approach.

Harm reduction groups see the settlements as a chance to move from the margins to the mainstream, but in some parts of the country they may face an uphill battle.

“For the first time we’re being told, you can do syringe services and you can use this money to do it,” Marc Burrows of Challenges Inc, South Carolina’s only harm reduction organization providing syringes, told Reuters in March.

But in May, the board overseeing the state’s opioid settlement denied a joint application by Challenges and a county health department to fund harm reduction efforts, without explaining its decision. The board did not respond to a request for comment.