Pa. opioid settlement money: What you need to know

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Billions of dollars are expected to come to Pennsylvania to help the state respond to the opioid epidemic, but tracking how counties and other local governments plan to spend that money isn’t easy.

“A lot of the decisions that are happening now are really going to set the tone for: What are we prioritizing?” said Alejandro Alves, who works on overdose prevention issues for the international public health nonprofit Vital Strategies.

Those decisions could have an impact for years to come because once counties start funding programs, it can be hard to eliminate or reduce them later — or switch to another initiative. Here’s what you need to know about the money, the process for deciding how it will be spent, and how you can influence it.

How much money will Pennsylvania receive from opioid lawsuit settlements?

The attorney general’s office has said the state is “set to receive more than $2.2 billion” from various investigations and cases. An office spokesperson declined to provide a detailed breakdown of how the office reached that number. There are several different sources of money, and the attorney general’s office has described them as coming in waves.

Pennsylvania expects to receive up to $1.07 billion over 18 years from a national deal with Johnson & Johnson and three major drug distributors — Cardinal Health, McKesson, and AmerisourceBergen. All 67 counties in Pennsylvania joined that agreement, the attorney general’s office announced in January 2022.

The state received about $130 million last year from that deal, according to Tom VanKirk, chair of the state’s opioid trust.

During a public meeting in late March, the state attorney general’s office described a second wave of opioid settlements, saying that agreements with five companies could bring over $770 million more to Pennsylvania. The list consisted of drug manufacturers Allergan and Teva and retailers Walmart, CVS, and Walgreens.

Brett Hambright, a spokesperson for the attorney general’s office, on May 12 declined to say how many counties and municipalities signed on to those second-wave settlements, writing that the deadline to do so was pushed back to May 10 and “we do not have all of the figures/info in yet.” That second wave did not include all opioid cases.

VanKirk told Spotlight PA and WESA in April that the trust received an additional $7 million in February from an opioid case in bankruptcy court that’s separate from the first- or second-wave figures.

Who’s in charge of spending opioid settlement money?

County government officials will have the most control.

The distribution plan in Pennsylvania says 15% of funds go to the state legislature to decide how to spend. Another 70% goes to county governments based on a formula that factors in opioid-related harm that occurred while also guaranteeing a minimum of $1 million for each county, and 15% goes to local governments that had initiated their own litigation. The latter includes some counties.

Separately, some opioid settlement money pays for attorney fees and expenses related to litigation, as well as management costs for the trust, according to court documents.

How can local governments spend the opioid settlement money?

Settlement documents describe a list of approved and recommended opioid remediation uses.

That list — known as Exhibit E — includes drugs that reverse opioid overdoses, medication-assisted treatment, support for pregnant and postpartum women, recovery services, prevention programs, regional planning, and media campaigns.

But that list doesn’t cover every possibility, and local governments will have some discretion.

Who ensures local governments spend the settlement money appropriately?

The 13-member Pennsylvania Opioid Misuse and Addiction Abatement Trust is primarily responsible for oversight of how counties and local governments spend their money.

Local governments don’t need permission from the trust before they spend money, according to the court order that created the trust and defined its powers. Once a year, counties must report to the trust on settlement expenditures, but the trust hasn’t provided information on how much detail will be required.

The trust can withhold future payments if locals spend the money in a way that “is not in accordance with the requirements of Exhibit E.” Local governments will have up to three months to fix the misspending and still receive their full payment.

But if they don’t resolve the issue, the trust can cut or withhold money going forward.

“Hopefully, we’ll never come to that,” VanKirk said at the trust’s first public meeting in March.

Who’s serving on the trust?

The governor has the power to appoint two members: the chairperson and a secretary of a state health and human services agency. Four legislative leaders also got to each appoint a member.

The remaining seven members represent regions of the state, with Philadelphia’s mayor and the Allegheny County executive each getting to appoint a member. Other regional representatives are selected based on votes from county leaders. There’s a complete list of members here.

What are the best ways to spend the opioid settlement money?

Johns Hopkins Bloomberg School of Public Health has shared a set of five principles to help guide states and local governments: spend the money to save lives, use evidence to direct spending, invest in youth prevention, focus on racial equity, and develop a fair and transparent process for deciding how to spend the funds.

Experts say the experience of a previous major public health-related settlement — a master agreement to resolve claims against tobacco companies — has shaped the opioid settlements.

“It was diverted for a number of reasons to other basic needs of governance that didn’t have anything to do with tobacco,” said Alves of Vital Strategies. “… No one wants to repeat that experience.”

But there’s still wide disagreement about the best way to respond to the opioid crisis. As Spotlight PA and WESA reported in April, an early point of contention is whether counties can and should spend the money to boost drug task forces, hire more police officers, and pay for guns and vests.

What if members of the trust and local governments disagree?

The order creating the trust gives the state Commonwealth Court the power to settle disputes. And if counties want to spend money on “an item of abatement not contained in Exhibit E,” they can petition the Commonwealth Court to allow them to do so.

The order states the spending will be allowed if the Commonwealth Court determines it will “reduce incidence or rate of opioid addiction and overdose deaths.”

How can people track opioid settlement spending by local governments?

In Pennsylvania, there’s currently no single resource for people to see where the money is going. Requesting information from your local government under Pennsylvania’s Right-to-Know Law can help. Spotlight PA has guides on filing public records requests and tips for appealing if an agency denies your request.

Staffers with Community Education Group, an advocacy organization focused on public health issues, have been scouring meeting minutes, county government websites, and local news articles to track different discussions and plans. Tricia Christensen, director of policy for the organization, said these funding decisions are “fundamentally a political process.”

There are ways to influence that process. Jordan Scott, regional field organizer for the Pennsylvania Harm Reduction Network, encourages people to try to serve on local task forces, research what their communities’ needs are, and attend local meetings where the decisions happen.

“It’s much harder to dismiss a group of 20 versus one person,” Scott said.

Some advocates are pushing for more community involvement in the process.

“We lived it,” Marianne Sinisi, whose son Shawn died from a drug overdose in 2018, told Spotlight PA and WESA. “So it shouldn’t be decided by government officials or somebody that just thinks they have all the answers. … It should be the victims that are at that table.”

When must counties report their settlement spending to the trust?

Their deadline is March 15 of each year. But the trust waived that requirement for this year. The order creating the trust does not specifically say other local governments that received money because of their role in litigation have to submit an annual report by that same deadline. But another section of the order says those other local governments can be penalized if they misspend money or don’t file an annual report.

The order does not require the state legislature to submit such a report to the trust on its spending.

How can people participate in trust meetings?

The trust is scheduled to meet publicly three more times this year: May 18, Sept. 7, and Nov. 30. Each meeting will begin at 2:45 p.m. and is planned to be virtual. No physical location is listed for the public to attend. At the trust’s first public meeting, members of the public did not have a chance to speak. People can submit questions through its website.

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