Local governments mulling ways to use opioid settlement funds

State governments across the country have been tasked with stewarding a portion of funds acquired through regional and national opioid settlements with companies including Johnson & Johnson, McKesson and CVS. The settlements stem from multiple nationwide lawsuits against the firms for their role in fueling the opioid epidemic.

According to the Centers for Disease Control and Prevention, around 75% of drug overdose deaths were connected with opioids in 2022. That accounts for the deaths of more than 81,000 Americans that year. Kentucky’s Justice and Public Safety Cabinet said in its 2022 Overdose Fatality Report that a little over 1,500 people who died from overdoses in the state were found to have fentanyl in their system.

State governments and localities are using the settlement funds to try to heal communities affected by the opioid crisis and prevent others from being affected.

Kentucky has secured around $900 million from the settlements. Those funds have been split into two pools, with half earmarked for a state commission and half divvied up among the state’s county and city governments. The state sent the first installments to local governments in December 2022. Payments are expected to continue until 2038, with no deadline for when funds must be spent.

Lauren Carr. opioid-settlement adviser for the Kentucky Association of Counties, helps county officials follow the best practices and reporting guidelines for the settlement funds.

“You can’t take these funds and use it for a program that was already being funded. You can’t take these funds and supplant. These funds are supposed to be to supplement,” Carr said. “Either integrate a new program or supplement the existing programs that you have – seeing where barriers are – and providing those services.”

(However, Morgain Patterson, director of municipal law with the Kentucky League of Cities, told Kentucky Health News that while some states prohibit opioid settlement dollars from being used to fund existing programs, called supplanting, Kentucky’s statute does not, “so they could be used for current programs . . . as long as they relate back to opioid-use disorder or co-occurring substance-use disorder and mental health issues.” For example, she said settlement money could be used to purchase Narcan, even if the city or county is already paying for it. That said, Johns Hopkins University has put together a document of principles it supports that says, ‘Jurisdictions should use the funds to supplement rather than replace existing spending.’ This document is posted on KACo’s website.)

The law creating the state opioid commission has a list of 29 possible uses for the funds. Carr said the list provides pathways for localities but doesn’t expressly limit their use.

The Paducah Police Department is using some of the city’s settlement dollars to staff a new position focused on lowering recidivism for the people with substance-use disorder. Police Chief Brian Laird said hiring a deflection specialist has been a long-term goal for his department.

“We encounter folks regularly that are homeless, folks that have mental health issues, folks that have drug abuse issues,” Laird said. “Instead of the officers continuing to respond over and over to these folks, we have somebody that can follow up with these individuals and try to get them some help.”

Deflection is a relatively new philosophy in law enforcement that focuses on keeping individuals with substance-use disorder from entering or re-entering the court system by avoiding interactions with police. Laird said that he’s aware of other social-work positions in police departments in Kentucky but believes Paducah may be the first in the state to hire a deflection specialist.

The position will be paid partly by the department’s budget, but most of the funding comes directly from settlement money. Applications for the position closed in April, and Laird hopes the specialist to be on board by August.

Other county and city governments in far western Kentucky are still trying to figure out how to spend their portion of settlement funds.

Murray officials formed a work group before the first payments were received to investigate possible uses of the funding. City Administrator Jim Osborne said the city is still working with the state Attorney General’s office, which oversees the opioid commission, but that no official plans have been made.

“The goal would be using the money to not necessarily just in one area of but could combine areas that are approved uses,” Osborne said. “I think the key is finding a happy medium of where best it would be used … something that’s legal, transparent and would help the community.”

Similarly, Marshall County Judge-Executive Kevin Spraggs said he wants to make sure settlement funds are used in the most efficient way possible.

“We want to make sure wherever this money goes, ultimately, it’s put to the best possible use,” Spraggs said. “We don’t want to jump into something without doing a lot of research, and we’d like to do something with a proven track record, percentage wise, where the most people are being helped.”

For Carr, addressing the opioid epidemic has two major components – prevention and harm reduction. She said that many localities focus on prevention, with programs like “Just Say No” to kepe people from becoming substance users in the first place. Harm reduction focuses on helping individuals who are already using drugs.

The list of 29 potential uses include programs for intervention, treatment and recovery services for substance users. The funds could also be used to educate the general public and provide training to health care providers, recovery specialists or law enforcement.

The list also includes things like drug take-back and disposal programs and expenss for naloxone, branded as Narcan, that can block opioid overdoses. Carr said that increasing accessibility to the medication and teaching the public about its use could help to prevent deaths.

“At the end of the day, a dead person doesn’t recover,” Carr said. “We all can be first responders. Whether it’s at a basketball game, at the library or at a Walmart, you never know when you may be a first responder, and so being prepared is something that will help save lives for individuals that are in active addiction right now.”