Arkansas receives first payment in $26 billion national opioid settlement
Arkansas has received more than $2.5 million from three opioid distributors as part of a national $26 billion settlement.
The payment is the first of $216 million the state will receive under the agreement through annual payments over 18 years.
State and local officials still must develop plans for how to spend the settlement funds, which have restrictions on the type of programs they can target.
Arkansas Attorney General Leslie Rutledge announced the settlement with three major pharmaceutical distributors — AmerisourceBergen, Cardinal Health and McKesson — and manufacturer Johnson & Johnson in July 2021. In all, 46 states, Washington D.C. and five territories signed on to the settlement, making it one of the largest multi-state agreements, second only to the Tobacco Master Settlement Agreement.
The opioid settlement received final approval in February 2022 and marked the culmination of three years of negotiations to resolve thousands of claims by state and local governments across the country.
As much as I’m in a hurry to get the money out to really help people that need it, I want to make sure that we do things right.
Arkansas will receive annual payments for nearly two decades, but the state has not yet received a payment from Janssen Pharmaceuticals, Inc., said Amanda Priest, communications director for the Arkansas Attorney General’s office. Janssen is owned by Johnson & Johnson.
“The distribution schedule is set by each national agreement,” Priest said. “Even after a state has qualified for a payment, there may be certain details that must be completed before payments can be distributed. For example, the Janssen settlement requires information about the population of fire protection districts in order to qualify for certain incentive payments.”
A memorandum of understanding signed in October 2021 formalized an agreement to split opioid settlement funds evenly between cities, counties and the state “when that resolution has been jointly entered into” by these three entities. In the national opioid settlement, for example, one-third goes to the state, one-third to counties and one-third to cities.
Former state drug director Kirk Lane is overseeing the disbursal of funding to counties and cities as the director of the Arkansas Opioid Recovery Partnership. The Association of Arkansas Counties and the Arkansas Municipal League formed the organization and Lane began his new role Aug. 22.
“I’m looking forward to doing this, and I’m also looking forward to working with the state and what they’re doing so we can combine our abilities to really help people in the state that need help,” he said. Feb. 5, 2021 —Arkansas’ attorney general announced a $573 million, multi-state settlement with McKinsey & Company, a firm that promoted marketing schemes and consulting services to manufacturers like OxyContin maker Purdue Pharma. Arkansas was awarded $5.4 million in the settlement.
Other opioid settlements
Mar. 3, 2022 — Purdue Pharma reached a nationwide settlement. The Sackler family members who own the company increased their cash contribution to as much as $6 billion in the deal, which could be worth more than $10 billion over time, according to the Associated Press.
Feb. 5, 2021 —Arkansas’ attorney general announced a $573 million, multi-state settlement with McKinsey & Company, a firm that promoted marketing schemes and consulting services to manufacturers like OxyContin maker Purdue Pharma. Arkansas was awarded $5.4 million in the settlement.
Lane is currently focused on setting up the Arkansas Opioid Recovery Partnership’s mission statement, website for transparency and organizing an advisory board that will consist of six to 15 members from diverse backgrounds.
He is also helping develop a process through which cities and counties will apply for funding to support programs and projects in their jurisdictions aimed at addressing the opioid epidemic. The goal is to have the application process up and running by the first of the year.
There are restrictions on how the money can be spent, so Lane said he wants to take the time to ensure the application and review processes are set up correctly. For example, the national settlement requires that 85% of funds to be used for programs that provide opioid treatment, education or prevention.
“As much as I’m in a hurry to get the money out to really help people that need it, I want to make sure that we do things right,” he said. “So everything that we’re doing is vetted by the legal team.”
Approximately 75% of all drug overdose deaths in the United States in 2000 involved an opioid, according to the U.S. Centers for Disease Control and Prevention. Arkansas reported 546 overdose deaths in 2020, the most recent data readily available from the CDC. That same year, Arkansas also had the second highest opioid dispensing rate in the nation, just behind Alabama.
Opioid overdoses have increased dramatically during the last year due to stressors associated with the pandemic, said Craig Wilson, health policy director at the Arkansas Center for Health Improvement. The issue has also been exacerbated by the availability of high-powered synthetic opioids that sometimes cause an overdose or death at first ingestion.
“We’re seeing a different animal here, and how we address it is going to have to be different as well,” Wilson said. “Hopefully, these funds can be used to support some of those efforts in the changing environment and the battle against this crisis.”
Opioid-related deaths increased from 180 in 2019 to 261 in 2020 and 371 in 2021, according to the Arkansas Opioid Response Dashboard.
Drawing on principles adopted by multiple organizations, Wilson published a whitepaper in August with suggestions for how to spend the opioid settlement funds. Recommendations include not spending the settlement money all at once, funding programs that are backed by research, investing in youth prevention efforts, focusing on racial equity and developing a fair, transparent process for deciding how to spend the settlement funds.
Both Wilson and Lane agreed on the importance of involving the community in the conversation about how the money is spent as well as making sure the supported initiatives aren’t duplicating existing programs.
“We’d like to parallel what the state is doing and to get programs going that the state couldn’t fund, and working in the rural areas and working with the cities and counties,” Lane said. “Empower them to fight this opioid epidemic.”
In 2019, Lane helped launch the nARcansas app, a free resource that contains tools to help someone administer the drug naloxone in the event of an opioid overdose. The app was created in partnership with the Arkansas Drug Director’s Office, Criminal Justice Institute, Department of Human Services and Team SI.
Today the nARcansas website provides a variety of educational resources including contact information for state-funded prevention centers and treatment centers located throughout Arkansas.
While the national settlement money will support the creation of more programs and have “a substantial impact” on the current opioid crisis, Wilson said it’s also important to be forward thinking.
“Hopefully some of these funds can be used for monitoring of what’s going on in the health care system and what’s going on in the environment to better understand what the next new crisis is going to be,” he said.
In addition to the opioid distributor funds, the state also received $4.5 million in July and August from a settlement with pharmaceutical company Endo. That settlement is governed by the MOU so outside counsel has distributed the settlement lump sum funds by giving one-third to the state, one-third to cities and one-third to counties, Priest said.