"Nearly $58 billion in opioid settlement funds, intended to combat a devastating addiction crisis, are increasingly being eyed for diverse purposes, raising concerns about accountability and the effective allocation of resources meant to save lives."
The staggering sum of approximately $58 billion, secured through lawsuits against companies accused of irresponsibly marketing prescription opioid painkillers, represents a critical, yet contentious, financial lifeline. While addiction treatment providers, innovators in opioid-related product development, and government entities grappling with budget deficits are all keenly interested in this substantial settlement pot, a significant portion of the funds—nearly half—is being channeled to local governments. This decentralization, based on the principle that local leaders best understand their communities’ needs, is intended to ensure justice for payouts often described as "blood money" by those who have endured the profound loss of loved ones to overdose. However, a critical gap in expertise and infrastructure at the local level is leading to spending decisions that many clinicians, researchers, and addiction recovery advocates argue are unlikely to effectively address substance use disorders or prevent further tragedies.
The challenges in effectively deploying these vast sums are starkly illustrated in New York. According to public records obtained by the nonprofit advocacy group Legal Action Center and shared with KFF Health News, counties in New York are directly controlling about 46% of the state’s opioid settlement money. A review of expenditures reveals concerning allocations, including tens of thousands of dollars spent on surveillance cameras, technology for police to access data from locked cellphones, and even goggles that simulate intoxication. While these purchases may be legally permissible, they are widely perceived by those most affected by the opioid crisis as a profound misstep, failing to directly support individuals battling addiction or their grieving families. Jasmine Budnella, director of drug policy at VOCAL-NY, an organization dedicated to serving those impacted by the "war on drugs," highlights this issue, stating that without robust oversight, counties are prone to "go rogue" with these funds. When advocates and families attempt to raise concerns with state agencies, they often encounter a frustrating cycle of inter-agency deflection, a phenomenon Budnella likens to the "Spider-Man meme," where accountability is perpetually passed along. The lack of a clear authority to enforce consequences for inappropriate spending leaves a critical void in ensuring these funds achieve their intended purpose.
This situation in New York serves as a 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, in collaboration with the Johns Hopkins Bloomberg School of Public Health and the addiction nonprofit Shatterproof, reveal a pattern of settlement money being diverted towards law enforcement equipment, such as night-vision goggles and bulletproof vests, unproven prevention initiatives like drug-awareness magicians for children, and even to plug general budget gaps in local governments. The question of who is responsible for taking action on these expenditures, which many individuals harmed by the crisis deem inappropriate, remains largely unanswered.
The fragmented control of these settlement funds across various entities within each state creates a significant leadership vacuum. The federal government, which played a minimal role in the multi-district litigation that resulted in these settlements, has largely disengaged from overseeing their distribution. Advocates and families, despite their profound personal stake, possess limited power to enforce accountability. While a few states have enacted new legislation, the pace of change is slow and inconsistent. The settlement agreements themselves mandate that the majority of funds be allocated to "opioid remediation," with an extensive list of over 100 suggested expenditures. However, the broad nature of this list permits wide interpretation, and further complicates matters, many states, including New York, designate a portion of these dollars as unrestricted, allowing for general budgetary use.
Compounding these challenges, federal budget cuts have jeopardized addiction-related services and exacerbated the demand for funding, creating a critical need for these settlement dollars to be strategically deployed. While overdose deaths have seen a slight decrease from their peak in 2022, they still claim an alarming average of 186 lives per day. Alexis Pleus, a resident of Binghamton, New York, who lost her 28-year-old son, Jeff Dugon, to a heroin overdose in 2014, eloquently expresses the sentiment of many: "We really are wasting this opportunity to use these funds to turn the epidemic around." Pleus, now running a nonprofit that receives opioid settlement cash from her county to support people who use drugs and provide family support groups, emphasizes the urgent need for oversight. She believes that if these funds can spare other families the heartache she has endured, it would offer a measure of solace.
In New York, the responsibility for oversight is theoretically distributed among three key entities: the Office of Addiction Services and Supports (OASAS), the Attorney General’s office, and the Comptroller’s office. However, the effectiveness and willingness of these bodies to assert their oversight roles are subjects of significant debate.
The Lead State Agency: A Limited Mandate
New York’s opioid settlement documents designate the Office of Addiction Services and Supports (OASAS) as the "lead state agency." This agency distributes a portion of settlement dollars through grants, guided by recommendations from the state’s Opioid Settlement Fund Advisory Board. OASAS also possesses the authority to "engage in oversight and audits of projects and programs" funded by settlement cash and can "withhold future funds" from local governments that fail to comply with specific requirements. Despite this authority, agency spokesperson Jerry Gretzinger indicated that OASAS has not yet exercised its power to withhold funds, though he affirmed the office’s understanding of its oversight duties. "OASAS has a duty to ensure these funds are used responsibly and strategically to build programs that will have a lasting impact in reversing this crisis," Gretzinger stated.
Currently, the office is auditing the use of funds by 19 local governments to ensure compliance with "reporting and recordkeeping requirements." However, this auditing process may not extend to the more critical question of whether the money was spent on appropriate and effective uses, a concern paramount to many advocates. Frustration arises from what is perceived as OASAS’s narrowly defined role. For instance, language included in last year’s state budget mandated local governments to publicly report their settlement fund expenditures for the first time. While OASAS collects links to these reports on its website, it does not review their accuracy or detail, relying solely on "the information as it is provided" by the localities, according to Gretzinger. Christine Khaikin, a deputy director at the Legal Action Center, which obtained public records on local spending in New York, finds this approach inadequate: "That doesn’t feel like oversight." Members of the state’s Opioid Settlement Fund Advisory Board have also urged OASAS to provide more data and evaluations on how the funds are being utilized. Yet, during a February 2025 meeting, OASAS Commissioner Chinazo Cunningham deflected these concerns, stating, "OASAS has no oversight over these portions of dollars," referring to the 46% of settlement money directly allocated to counties and cities. She further added, "In terms of what kind of data each county collects, we cannot dictate exactly what that information is."
Examples of Spending Decisions Fueling Calls for Oversight in New York
The Legal Action Center’s investigation into local spending in New York revealed a mixed bag of expenditures. While many counties directed funds towards addiction treatment, recovery, and prevention initiatives, others exhibited questionable allocations. Cortland County, for example, records show $150,000 in settlement cash earmarked for "Sheriff Jail" with no further clarification. Sullivan County allocated over $30,000 for Cellebrite technology, used for data extraction from cellphones, and over $37,000 for Tasers, with county records attributing these purchases to unrestricted funds. These justifications are deeply troubling to families affected by the crisis, who argue that even without explicit legal restrictions, moral considerations should guide spending. Alexis Pleus reiterates this sentiment: "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." Furthermore, many jurisdictions have yet to spend significant portions of their allocated funds, a pattern observed in other states. Local officials attribute this to the need for thoughtful planning, but some advocates suspect that the interest generated by large sums held in bank accounts might be a contributing factor. In Nassau County, nearly $14 million in accrued interest from unused opioid settlement funds was initially transferred to the county’s general fund, only to be moved back after public outcry. Advocates believe similar maneuvers may be occurring elsewhere, obscured within complex budgeting documents. Jasmine Budnella of VOCAL-NY voices the ongoing frustration: "It feels like it’s up to us all—the organizers, the advocates, the service providers—to be constantly watching."
The Top Law Enforcement Officer: A Stance of Non-Intervention
New York Attorney General Letitia James has been a prominent national figure in prosecuting pharmaceutical companies implicated in fueling the overdose crisis, with her office frequently issuing press releases highlighting their role in securing billions in opioid settlement funds for the state. However, when questioned about the Attorney General’s role in ensuring the appropriate distribution of these funds, her office deferred responsibility to other agencies. "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," stated spokesperson Grant Fox. This stance contrasts sharply 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, views the Attorney General’s office as a crucial enforcement entity. "The money is here because of their efforts," she remarked, adding, "I believe it is under the Office of the Attorney General to enforce." Budnella echoes this sentiment, emphasizing that it "would be a shame for all of their work that they have done to secure all this funding for it to be misspent."
In contrast to New York’s approach, Attorneys General in Michigan and Kansas have adopted more active roles, issuing lists of prohibited expenditures that include many law enforcement items that have raised concerns among New York advocates. The New York Attorney General’s office did not respond to specific inquiries regarding whether they would consider creating a similar list.
The Fiscal Watchdog: A Potential for Audits
The possibility of the state comptroller playing a more active oversight role has also been raised, potentially through conducting or requiring audits. Earlier this year, the Reason Foundation, a libertarian think tank, proposed model legislation that would mandate audit requirements for recipients of settlement funds. Their blueprint suggests that organizations receiving over $1 million in opioid settlements should undergo independent financial statement reviews and transaction testing to verify the appropriate use of funds. Smaller grantees, receiving less than $1 million, would be required to provide an unaudited accounting. Mariana Trujillo, a co-author of the Reason Foundation plan, clarifies, "It’s 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 process, initiated in February, "is looking at OASAS’s oversight" of the opioid settlement money, encompassing both state and local allocations, according to spokesperson Mary Mueller. Mueller stated that any future enforcement actions "will depend on the results of our current work and our ongoing monitoring." The Comptroller’s office is following the precedent set by similar actions taken by comptrollers and auditors in New Jersey, Missouri, and Nashville, Tennessee, regarding settlement funds. These initial steps offer a glimmer of hope for advocates and researchers, particularly as opioid settlement funds are expected to continue flowing for over a decade. Layal Bou Harfouch, a co-author of the Reason Foundation’s model law, points to egregious past examples, such as funds being used for concerts or police shooting ranges, and expresses optimism: "If we can prevent that at least a little and have these funds be a bit more focused, I don’t think it’s too late."
