The Opioid Settlements: Where Are We Now?

The Maryland General Assembly passed, and Governor Larry Hogan has signed, House Bill 1086/Senate Bill  419 – Opioid Restitution Fund – Appropriation of Settlement Funds and Grant Program, which codifies a division of funds agreement between the state and local subdivisions (counties and municipalities) regarding several recent opioid settlements.

In November of 2021, MACo, The Maryland Municipal League, and Attorney General Brian Frosh’s Office began work on the agreement controlling approximately $395 million in settlement funds to be received from Johnson and Johnson, McKesson, AmeriSourceBergen, and Cardinal Health. Counties and municipalities will receive approximately $269 million of the settlement total. As mentioned in previous Conduit Street coverage:

The settlement agreements will provide funds for opioid remediation to the State and its subdivisions over 18 years, including an infusion of funds that will become available in the coming months. Accompanying the settlement is a statewide allocation agreement that requires proceeds to be spent on opioid abatement. The agreement, while preserving local autonomy, provides for continued coordination of opioid-related spending throughout the state.

Under the agreement, counties were required to create “local abatement funds” to which settlement proceeds would be deposited. Local Abatement Funds should have been established by March 22, 2022, or 60 days from the date of the agreement. In communications regarding said funds with counties and municipalities, the Attorney General’s Office noted, “the State has been agreeing to reasonable extension requests, on a subdivision by subdivision basis, of the deadline.”

Several conversations with the AG’s Office suggest Local Abatement Funds need only be discrete accounts holding funds exclusively for opioid abatement purposes. They need not be established through ordinance or resolution. With the division of funds agreement now incorporated into state law, the Attorney General’s Office had anticipated the first round of settlement proceeds to be distributed in late April/early May. Possible delays may take place as local subdivisions continue to establish their Local Abatement Funds and request extensions.

As Maryland navigates the current round of opioid settlements, additional funds are anticipated in the near future. In March of this year, Attorney General Frosh announced an estimated $121.9 to $132.2 million settlement with the Sackler family concerning its role in the production and distribution of the opioid Oxycontin. Litigation is still pending against several other opioid manufacturers, including Teva and Endo, as well as retailers, including CVS, Walgreens, and Walmart.

Read previous Conduit Street coverage of the opioid settlement here.

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