Opioid settlement update

It’s been a while since we’ve updated you on the opioid distributor, pharmacy, and manufacturer settlements. Let’s dive in!

Opioid distributors settlement (announced October 2022)

Cities that signed on to the opioid distributors settlement should have received their first payment in December 2022. Second payments are due to begin this summer (we’ll update you when we have a date) and are reflected in this sheet.

Attorney fees for the distributor opioid settlement with AmerisourceBergen, Cardinal Health, and McKesson are currently being calculated by a third party appointed by the MDL fee panel, as provided in the allocation agreement (Section 11.G). The MDL Fee Panel retained the services of Joseph Tann, Esq. as authorized in the order referenced in the agreement. Mr. Tann has calculated the amounts due to the four firms that represent the litigating local governments in Washington (Keller Rohrback, Huck Goldfarb, Hagens Berman, and Napoli Shkolnik).

These fees are being paid from funds that were allocated in the settlement to the government fee fund and held by the settlement administrator for this purpose.

Now that this calculation is complete, the amount local governments will receive will be $203.3 million from the distributor settlement after attorneys’ fees. This is higher than the preliminary calculation of $194 million that was previously communicated.

More information on this settlement can be found on the Attorney General’s Distributors Washington Settlement website.

Opioid pharmacy & manufacturer settlements (announced December 2022)

All local governments that were eligible signed on to the five settlements by the April 18 deadline.

The Attorney General’s Office estimates that these five settlements could total $434.4 million for Washington state:

• CVS: $110.6 million over 10 years;
• Walgreens: $120.3 million over 15 years;
• Walmart: $62.6 million and 97% of that paid in the first year;
• Teva: $90.7 million over the next 13 years; and
• Allergan: $50 million over the next seven years.

The pharmacy and manufacturer settlement payments are expected to begin late this summer or fall. More information on these five settlements can be found on the Attorney General’s Opioid Pharmacy & Manufacturer Settlement website.

Opioid abatement councils

Eligible local governments were also supposed to have their Opioid Abatement Councils (OAC) set up before the next annual payments from last year’s distributor settlement. As provided in the One Washington MOU, the regional OACs are a condition of the settlement agreements.

One of the key duties of the OAC is to develop and maintain a website that lists settlement fund spending by local governments in the region, updated annually. The OAC may be a preexisting regional body or may be a new body created for purposes of executing the obligations of the settlement. OAC membership is outlined in the One Washington MOU and includes representatives from participating cities and counties in the region who have work or educational experience in one of the approved opioid abatement uses under the agreement. The process for determining representation will be determined by the participating local governments, and regions may wish to build on existing regional public health structures to oversee the settlement allocations and reporting requirements. Several have been formed already if your region needs a model.

State of Washington’s portion of the settlement

The state has also received its portion of the first distribution and has begun to allocate the funds for opioid abatement purposes. $63.3 million was appropriated in the 2023-25 operating budget, including:

• $54.4 million to the Health Care Authority’s (HCA) community behavioral health program for:
  • $300k for recovery residences and an additional $6 million in grants to help staff those residences;
  • $18 million for prevention, treatment, and recovery support services to address and remediate the opioid epidemic;
  • $2 million to develop and implement a health promotion and education campaign;
  • $3.5 to support new and established clubhouses;
  • $5 million for law enforcement assisted diversion programs (LEAD) outside of King County;
• $7.4 million to the Department of Health (DOH) for prevention, treatment, and recovery support services including $5 million for naloxone distribution.
• $2.3 million to the Department of Children, Youth, and Families (DCYF) Children and Families Services Program.
• $250,000 to the Department of Labor and Industries (LNI) to analyze patients who are maintained on chronic opioids.

You can find more detailed descriptions of the funded programs in the recommendations for the State’s portion of the opioid settlement distribution submitted by the Health Care Authority (HCA) and Department of Health (DOH) in December. These were recommended budget appropriations and do not reflect the final numbers that the legislature enacted in the 2023-25 operating budget.

To learn more about what the Legislature did on behavioral health this session, check out AWC’s recap or check out AWC’s summary of the 2023-25 budget.

Resources

More information on the first settlement can be found on the Attorney General’s Distributors Washington Settlement website and information on the recent five settlements with opioid pharmacies and manufacturers can be found on the Attorney General’s Opioid Pharmacy & Manufacturer Settlement website.

If you have questions about the settlements, please contact Jeff Rupert, the Division Chief for the AGO’s Complex Litigation Division, at jeffery.rupert@atg.wa.gov and comopioidscases@atg.wa.gov.

More information and documents regarding the settlements can be found on the national settlement website.

The State Auditor’s Office (SAO) published this helpful guide on accounting for revenue received from the opioid lawsuits.

Please note that AWC is facilitating the sharing of information between the AGO and cities. The information contained in these materials is for informational purposes and should not be considered legal advice.