Businesses are pitching local governments to give them money from the national opioid settlement; Ky. advisers say to go slow

By Heather Close Published December 19, 2023 DRUGS, FEATURED, HEALTH BUSINESS, HEALTH POLICY, YOUR HEALTH

Information for this story was also gathered by Kentucky Health News.

The pitches are bold and arriving fast: Invest opioid settlement dollars in a lasso-like device to help police detain people without Tasers or pepper spray. Pour money into psychedelics, electrical stimulation devices, and other experimental treatments for addiction.

Opioid manufacturers and distributors are paying more than $54 billion in restitution to settle lawsuits about their role in the overdose epidemic, with little oversight on how the money is spent. KFF Health News and Kentucky Health News are tracking how state and local governments use or misuse the cash.

The marketing pitches land daily in the inboxes of state and local officials in charge of distributing money from the settlements in opioid lawsuits over the next two decades or more. Kentucky is getting $900 million, split evenly between the state and local governments.

The money is coming from an array of companies that made, sold, or distributed prescription painkillers, including Johnson & Johnson, AmerisourceBergen and Walgreens. Thousands of state and local governments sued the companies for aggressively promoting and distributing opioid medications, fueling an epidemic that progressed to heroin and fentanyl and has killed more than half a million Americans. The settlement money, arriving over nearly two decades, is meant to remediate the effects of that corporate behavior.

But as the dollars land in government coffers — more than $4.3 billion as of early November — a swarm of private, public, nonprofit, and for-profit entities are eyeing the gold rush. Some people fear that corporations, in particular — with their flashy products, robust marketing budgets, and hunger for profits — will now gobble up the windfall meant to rectify it.

“They see a cash cow,” said JK Costello, director of behavioral health consulting for the Steadman Group, a firm that is being paid to help local governments administer the settlements in Colorado, Kansas, Oregon, and Virginia. “Everyone is interested.”

Officials of the Kentucky Association of Counties and the Kentucky League of Cities told Kentucky Health News that they are advising cities and counties to not rush to spend the funds, because they don’t expire and might be used more effectively if they are allowed to accumulate.

Morgain Patterson, the cities league’s law director, said it is encouraging the state’s 149 elibigle cities to form partnerships “to build more of an infrastructure” for things like job training for people in recovery. She noted that Ashland, which is getting about $100,000 a year from settlements, issued a request for propopals from people and groups interested in the funds.

Tim Sturgill, general counsel for the counties association, said it has hired a new employee, starting Jan. 4, who will help county officials understand both what they can and should do with the money.

The key to deciding how to spend the settlement money, public-health and policy experts told KFF Health News, is to critically evaluate products or services to see if they are necessary, evidence-based, and sustainable, instead of flocking to companies with the best marketing. Otherwise, “you end up with lots of shiny objects,” Costello said. And, ultimately, failure to do due diligence could leave some jurisdictions holding an empty bag.