The Opioid Settlements: What is Opioid Remediation?

Through several opioid-related settlements, Maryland is set to receive hundreds of millions of dollars for “opioid remediation” – raising questions about what this term means and how this money is best spent.

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When nearly all of Maryland’s counties signed on to a Memorandum of Understanding (MOU) concerning how settlement funds will be distributed, they agreed to conditions governing how those funds would be expended. Specifically, a qualifying county may spend its allocation toward “any [prospective] use permitted by the National Settlement Agreement and Section 7-331(f) of the State Finance and Procurement Article.” The Johnson and Johnson settlement agreement permits funds to be used for “opioid remediation,” which it defines broadly:

“Opioid Remediation” means care, treatment, and other programs and expenditures (including reimbursement for past such programs or expenditures except where this Agreement restricts the use of funds solely to future Opioid Remediation) designed to (1) address the misuse and abuse of opioid products, (2) treat or mitigate opioid use or related disorders, or (3) mitigate other alleged effects of the opioid abuse crisis, including on those injured as a result of the opioid abuse crisis. Exhibit E provides a non-exhaustive list of expenditures that qualify as being paid for Opioid Remediation. Qualifying expenditures may include reasonable related administrative expenses.

As referenced above, Exhibit E of the settlement agreement outlines “core abatement strategies” and a subset of “approved uses.” The former includes the following priorities:

  • Naloxone or other FDA-approved drug to reverse opioid overdose
  • medication-assisted treatment (“MAT”) distribution and other opioid-related treatment
  • pregnant & postpartum women
  • expanding treatment for neonatal abstinence syndrome (“NAS”)
  • expansion of warm hand-off programs and recovery services
  • treatment for incarcerated population prevention programs
  • expanding syringe service programs
  • evidence-based data collection and research analyzing the effectiveness of the abatement strategies within the state

“Approved uses” include three broad categories:

  • Treatment
    • treat opioid use disorder
    • support people in treatment and recovery
    • connections to care
    • address the needs of criminal justice-involved persons
    • address the needs of pregnant or parenting women and their families, including babies with neonatal abstinence syndrome
  • Prevention
    • prevent over-prescribing and ensure appropriate prescribing and dispensing of opioids
    • prevent misuse of opioids
    • harm reduction
  • Other Strategies
    • first responders
    • leadership, planning and coordination
    • training
    • research

With the many funding opportunities enabled by the Johnson and Johnson and opioid medication distributors settlement agreements, Route Fifty recently examined how several counties across the country face pressure to tackle “prevention and recovery.” Citing the 1998 master settlement agreement that arose from several state-led tobacco lawsuits, public health advocates fear inadequate funding to address opioid-related issues, knowing that “only a fraction of [the 1998 settlement] money went toward actually defraying the public health costs of smoking.” In 2007, the United States Government Accountability Office reported that “states allocated about 23% [of tobacco master settlement funds] just to balance budgets and cover deficits.”

However, the recent opioid settlements appear to depart from the tobacco model, especially since the settlements, as mentioned above, specify approved uses. This recent departure seems to be a trend in all opioid settlement negotiations, as reflected in an example provided by Route Fifty:

[A] Memorandum of Understanding earlier this year between McKinsey & Co. and West Virginia mandates that nearly one-quarter of the state’s portion of the $570 million national settlement go to local governments. It also calls for 73% to be used to create a foundation to receive, manage and disburse the funds; help facilitate collaboration between local governments; and provide guidance on the strategic responses outlined in the MOU.

Many counties across the country are diverting settlement funds toward amplifying and expanding existing responses to the opioid epidemic. For example, in Lake County, Ohio, funds are being allocated toward “prevention, harm reduction and after care,” including “a quick response team” that visits “a household where there has been an overdose to check in with that person and talk to them about their options for getting help.” As a first step, the County “plans to create a small steering group of front line workers, including representatives from public safety, first responders, the addiction and mental health services board, and the county department of child and family services.”

For counties still determining which programs and services to prioritize, the Johns Hopkins Bloomberg School of Public Health has constructed a guide – Principles for the Use of Funds from the Opioid Litigation. The document seeks to “encourage practices like developing a multi-year budget plan, focusing on racial equity, spending on evidenced-based treatment and prevention programs, and transparency in reporting.” Maryland’s counties, which are required to create five-year opioid abatement plans under their MOU (Section IV(a)(2)(B)) with the state, will undoubtedly find this guide helpful.

Considering the last major hurdle to opioid settlement monies making their way to Maryland’s counties has been cleared, Maryland may finally have the tools and resources needed to end the nearly decade-long opioid epidemic.

Read the full Route Fifty article.

Read previous Conduit Street opioid settlement coverage.