"We’re wasting this opportunity to use these funds to turn the epidemic around." – Alexis Pleus, a mother who lost her son to an overdose, voices a critical concern as billions intended to combat the opioid crisis are being misallocated due to a lack of oversight and clear guidance, raising questions about the true impact of these landmark settlements.
Companies that profited from the aggressive marketing and distribution of prescription opioid painkillers are now facing a reckoning, with approximately $58 billion allocated to settle lawsuits related to their role in the devastating addiction crisis. This substantial financial pool, intended as a form of restitution, has become a focal point for a diverse array of stakeholders. Addiction treatment providers see it as a lifeline for expanding critical services, companies developing innovative opioid-related products view it as a source of funding, and government officials, grappling with strained budgets, are eager to tap into this unexpected revenue stream. However, the intended beneficiaries—individuals and communities ravaged by the opioid epidemic—are increasingly concerned that this crucial funding may not reach its intended purpose, highlighting a significant gap between the punitive intent of the settlements and their practical application.
A significant portion, nearly half of the total settlement money, is directed to local governments, empowering county commissioners and city councilors to decide its allocation. The rationale behind this decentralized approach is that local leaders possess the most intimate understanding of their communities’ needs, allowing them to ensure these payouts, often tragically referred to as "blood money" by those who have lost loved ones to overdoses, are used justly. Yet, a critical challenge emerges: many local officials lack specialized training in addiction policy and may not have robust local health departments or established policy guardrails to guide their decisions.
This deficit in expertise and infrastructure has led to spending choices that clinicians, researchers, and addiction recovery advocates argue are unlikely to effectively save lives or address substance use disorders. In New York, for instance, where approximately 46% of the opioid settlement funds are directly managed by local governments, public records reveal concerning expenditures. The nonprofit advocacy group Legal Action Center, in collaboration with KFF Health News, uncovered instances where counties have allocated tens of thousands of dollars to items such as surveillance cameras, technology to aid police in accessing data from locked cellphones, and even goggles that simulate intoxication. While these purchases may be legally permissible, they are widely perceived as a deeply insensitive and inappropriate use of funds intended for victims of the opioid crisis, failing to directly assist those struggling with addiction or their families.
Jasmine Budnella, director of drug policy at VOCAL-NY, an organization dedicated to serving individuals affected by the war on drugs, warns that without adequate oversight, counties possess the autonomy to "go rogue" with these funds. When advocates and families of overdose victims attempt to raise concerns with state agencies that theoretically possess accountability powers, they often encounter a frustrating cycle of inter-agency deflection. Budnella likens this dynamic to the popular "Spider-Man pointing at Spider-Man" meme, where responsibility seems to be passed around endlessly. "Somebody needs to be able to have the stick and slam their hand on the table and be like, ‘You’re doing this wrong and this is the consequence,’" she asserts, emphasizing the urgent need for a clear authority to enforce accountability.
The experiences in New York serve as a potent microcosm of a broader national trend, where regulatory bodies appear to be evading oversight responsibilities while various interests compete for this substantial financial windfall. Years of data meticulously collected by KFF Health News, the Johns Hopkins Bloomberg School of Public Health, and the addiction nonprofit Shatterproof have consistently revealed patterns of settlement money being diverted to law enforcement equipment, such as night-vision goggles and bulletproof vests. Furthermore, funds have been allocated to unproven prevention initiatives, like hiring drug-awareness magicians for children, and even to plug general budget gaps in local governments.
The question of who is responsible for scrutinizing and taking action against these questionable expenditures remains nebulous. The settlement agreements themselves mandate that the majority of the funds be used for "opioid remediation," with an extensive list of over 100 suggested expenditures. However, this list is broad and open to wide interpretation. Compounding this issue, many states, including New York, designate a portion of the settlement dollars as unrestricted, granting local governments considerable latitude in their spending. The federal government, meanwhile, has played a minimal role in the multi-district litigation that led to these settlements, leaving the onus of oversight primarily on state and local entities.
The persistent threat of federal budget cuts to addiction-related services, coupled with the ongoing demand for funding, intensifies the pressure on these settlement funds. Despite a recent decrease in overdose deaths from their 2022 peak, the crisis remains dire, with an estimated 186 lives lost daily. Alexis Pleus, a Binghamton, New York resident whose son Jeff Dugon died of a heroin overdose in 2014, powerfully articulates the sentiment of many: "We really are wasting this opportunity to use these funds to turn the epidemic around." Pleus, who now runs a nonprofit that receives opioid settlement cash to support individuals who use drugs and provide family support groups, believes that the funds could offer solace if they spare other families the profound heartache she has endured. She champions the critical need for robust oversight, underscoring that "We need oversight."
In New York, the responsibility for this oversight appears to be contested among three primary entities: the Office of Addiction Services and Supports (OASAS), the Attorney General’s office, and the Comptroller’s office. OASAS, designated as the "lead state agency" in the opioid settlement documents, distributes a portion of settlement dollars through grants recommended by the state’s Opioid Settlement Fund Advisory Board. The agency also possesses the authority to "engage in oversight and audits of projects and programs" funded by settlement cash and can "withhold future funds" from non-compliant local governments. Jerry Gretzinger, a spokesperson for OASAS, stated that while the office has not yet exercised its power to withhold funds, it recognizes its oversight role and is committed to ensuring responsible and strategic use of these funds to create lasting impact. Currently, OASAS is auditing 19 local governments’ use of the money to ensure compliance with reporting and recordkeeping requirements. However, this audit scope may not extend to the broader question of whether the money was spent on appropriate uses, a key concern for many advocates.
The current approach by OASAS has drawn criticism for its perceived narrowness. While a provision in last year’s state budget mandated local governments to publicly report their settlement fund expenditures, OASAS merely collects links to these reports without reviewing their accuracy or detail, relying instead on the information provided by localities. Christine Khaikin, a deputy director at the Legal Action Center, which obtained public records on local spending in New York, finds this approach insufficient, stating, "That doesn’t feel like oversight." Members of the state’s Opioid Settlement Fund Advisory Board have also urged OASAS to provide more comprehensive data and evaluation of fund utilization. However, at a recent meeting, OASAS Commissioner Chinazo Cunningham appeared to deflect responsibility for funds directly allocated to counties and cities, stating, "OASAS has no oversight over these portions of dollars."
Local Spending That’s Fueling Calls for Oversight in New York
The Legal Action Center’s investigation into how opioid settlement cash is being spent in New York revealed a mixed bag of expenditures. While many counties directed funds towards addiction treatment, recovery, and prevention initiatives that align with expert recommendations, others displayed questionable spending patterns. For example, Cortland County records showed $150,000 in settlement cash allocated to "Sheriff Jail" with no further clarification, and the county did not provide additional details despite repeated inquiries. Sullivan County spent over $30,000 on Cellebrite technology for data extraction from cellphones and more than $37,000 on Tasers, justifying these purchases as coming from unrestricted funds.
These justifications, particularly the use of funds for law enforcement technology and equipment, deeply trouble families affected by the crisis. Alexis Pleus reiterates that "Anything that is not directly tied to people who are struggling with opioid addiction or the loss of someone is a poor use of funds." Many jurisdictions also have a significant portion of their settlement money unspent, a pattern observed in other states as well. Local officials often cite the need for thoughtful planning, but some advocates suspect that the interest generated by these unspent millions could be an ulterior motive. A concerning incident in Nassau County, where nearly $14 million in accrued interest from unused opioid settlement funds was initially transferred to the county’s general fund before being moved back after public outcry, highlights the potential for financial impropriety. Advocates fear such attempts are occurring elsewhere, making constant vigilance by organizers, advocates, and service providers essential, a situation described as "frustrating" by Jasmine Budnella of VOCAL-NY.
The Top Law Enforcement Officer
New York Attorney General Letitia James has been a prominent national figure in prosecuting pharmaceutical companies involved in the opioid crisis, with her office frequently issuing press releases touting their success in securing billions in settlement funds. However, when questioned about her office’s role in ensuring the appropriate expenditure of these funds, her office deferred to other agencies. Spokesperson Grant Fox stated, "While our partners in state and local governments distribute and oversee these funds, we will continue our work to hold accountable the companies responsible for fueling the spread of addictions and overdoses." This stance contrasts with the expectations of many, including state Senator Nathalia Fernandez, who chairs the committee on alcoholism and substance use disorders. Senator Fernandez, along with other advocates, believes the Attorney General’s office should play a key enforcement role, asserting, "The money is here because of their efforts… I believe it is under the Office of the Attorney General to enforce." Jasmine Budnella echoes this sentiment, stating, "It would be a shame for all of their work that they have done to secure all this funding for it to be misspent."
While James’s office has not issued specific guidance on how opioid settlement funds can be spent, other states, such as Michigan and Kansas, have taken a more active role by providing lists of expenditures that are prohibited. These lists often include many law enforcement-related expenditures that have sparked concern among advocates in New York. The New York Attorney General’s office did not respond to inquiries about whether they would consider creating a similar list.
The Fiscal Watchdog
The role of the state comptroller as a steward of New York’s finances has also been suggested as a potential avenue for oversight, possibly through conducting or requiring audits. The Reason Foundation, a libertarian think tank, proposed a model law requiring recipients of more than $1 million in opioid settlements to undergo independent financial reviews, while smaller grantees would submit unaudited accountings. Mariana Trujillo, a co-author of the Reason Foundation plan, clarifies that the model "is not telling states what is and what isn’t an appropriate use… We’re simply trying to ensure recipients follow through with their promises."
While no state has yet adopted this model law, the office of New York Comptroller Thomas DiNapoli has confirmed it is currently conducting an audit. This audit, initiated in February, will examine OASAS’s oversight of opioid settlement money, encompassing funds controlled by both state and local governments. Spokesperson Mary Mueller indicated that any future enforcement actions will be contingent on the audit’s findings and ongoing monitoring. This initiative aligns with similar actions taken by comptrollers and auditors in New Jersey, Missouri, and Nashville, Tennessee, who have addressed settlement cash expenditures.
These initial steps toward greater accountability offer a glimmer of hope for the future of opioid settlement dollars, which are expected to be disbursed over more than a decade. Layal Bou Harfouch, another co-author of the Reason Foundation’s model law, expresses a sense of urgency, noting the "craziest stories" of funds being used for concerts and police shooting ranges. She believes that with focused efforts, it is "not too late" to ensure these funds are utilized more effectively to combat the opioid epidemic.
