"A staggering $58 billion in opioid settlement funds, intended to combat the addiction crisis, is being eyed by various entities, but concerns are mounting that these crucial resources are being diverted from their intended purpose due to a lack of oversight and expertise at the local level."
The vast financial settlement, reached with pharmaceutical companies accused of fueling the opioid epidemic, represents a critical opportunity to address the devastating consequences of addiction. While intended to fund treatment, prevention, and recovery initiatives, a significant portion of this money is being distributed to local governments, which often lack the specialized knowledge and infrastructure to manage these funds effectively. This has led to reports of questionable spending, raising alarms among addiction experts, patient advocates, and families who have lost loved ones to overdose, suggesting a potential squandering of a once-in-a-generation chance to turn the tide against the ongoing crisis.
The scale of the opioid settlement is unprecedented, with approximately $58 billion allocated to address the multifaceted fallout of the addiction crisis. This colossal sum is a direct result of legal actions against companies that manufactured and aggressively marketed prescription opioid painkillers, leading to widespread addiction and devastating loss of life. The funds are seen as a vital lifeline by a range of stakeholders, from addiction treatment providers striving to expand their services to government officials grappling with strained public budgets. However, the distribution and oversight of these funds have become a significant point of contention, highlighting systemic challenges in ensuring that money meant for healing is used effectively.
A substantial portion of these settlement funds, close to half, is being channeled directly to local governments, empowering county commissioners and city councilors with the authority to decide how the money is spent within their communities. The rationale behind this decentralization of funds is rooted in the belief that local leaders possess the most intimate understanding of their constituents’ needs and can thus administer these payouts with greater efficacy. These funds are often described by those who have experienced profound loss due to the opioid crisis as "blood money," underscoring the deep emotional weight and the expectation of direct, life-saving impact associated with every dollar.
Despite the intentions, a critical gap in expertise has emerged. Many local officials tasked with managing these substantial funds lack specialized training in addiction policy. Furthermore, robust local health departments and established policy guardrails that could guide decision-making are often underdeveloped or insufficient. This deficiency in expertise and infrastructure has, in numerous instances, led to spending decisions that clinicians, researchers, and addiction recovery advocates argue are unlikely to yield tangible results in saving lives or effectively treating substance use disorders.
Evidence from New York illustrates these concerns vividly. Public records obtained by the nonprofit advocacy group Legal Action Center reveal that nearly half of the state’s opioid settlement money is under the direct control of local governments. Some counties have allocated tens of thousands of dollars towards expenditures such as surveillance cameras, technology to aid police in accessing data from locked cell phones, and even goggles that simulate intoxication. While these purchases may be legally permissible, they are widely perceived by those directly affected by the crisis as a profound misstep, failing to address the immediate needs of individuals struggling with addiction or their families.
Jasmine Budnella, director of drug policy at VOCAL-NY, an organization dedicated to supporting individuals impacted by the war on drugs, emphasizes the potential for "going rogue" with these funds in the absence of adequate oversight. She notes a frustrating pattern where advocates and families seeking accountability often find themselves navigating a bureaucratic maze, with various state agencies deflecting responsibility. "It feels like the Spider-Man meme, where it’s like everybody’s pointing at each other," Budnella stated, calling for a clear authority to intervene and enforce proper usage. "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.’"
The experiences in New York serve as a microcosm of a broader national challenge, where regulatory bodies appear to be evading direct oversight responsibility while diverse interests compete for the financial windfall. Years of data compiled by KFF Health News, in collaboration with the Johns Hopkins Bloomberg School of Public Health and the addiction nonprofit Shatterproof, have documented a disturbing trend of settlement money being allocated to law enforcement equipment, such as night-vision goggles and bulletproof vests. Furthermore, funds have been used for unproven prevention initiatives, like hiring a drug-awareness magician for children, and even to plug general budget deficits in local governments. The ambiguity surrounding accountability for these expenditures leaves many, particularly those harmed by the opioid crisis, questioning the ultimate beneficiaries of these funds.
The fragmented control of settlement money across various entities within each state creates a leadership vacuum, leaving little room for decisive action. The federal government, which did not actively participate in the litigation that led to these settlements, plays a minimal role in their oversight. Advocates and families, despite their relentless efforts to demand accountability, possess limited power to effect change. While a few states have enacted new legislation to address these issues, progress remains slow and inconsistent.
The settlement agreements stipulate that the majority of the funds must be dedicated to "opioid remediation," a broad category that encompasses over 100 suggested expenditures. However, the wide-ranging nature of these suggestions allows for considerable interpretation. Compounding this issue, many states, including New York, designate a portion of the settlement dollars as unrestricted, granting local governments broad discretion in their spending. This lack of specific guidance, coupled with the pressure of strained budgets and the ongoing demand for addiction services exacerbated by federal funding cuts, creates a fertile ground for misallocation. Despite a recent decrease in overdose deaths from their 2022 peak, the crisis remains acute, with approximately 186 lives still being lost daily.
Alexis Pleus, whose son Jeff Dugon died of a heroin overdose in 2014, expressed profound disappointment, stating, "We really are wasting this opportunity to use these funds to turn the epidemic around." Pleus, now running a nonprofit that utilizes opioid settlement funds to support individuals who use drugs and provide resources for families, believes that any expenditure not directly tied to helping those struggling with addiction or grieving their loss is a misuse of funds. The desire for such funds to spare other families the heartache she has endured fuels her advocacy for robust oversight.
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. OASAS is designated as the "lead state agency" for opioid settlement funds. It disburses a portion of these dollars through grants, guided by recommendations from 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 these settlements and can "withhold future funds" from non-compliant local governments. While OASAS has stated its commitment to ensuring responsible and strategic use of these funds, its current auditing efforts focus primarily on "reporting and recordkeeping requirements," which may not adequately address the appropriateness of expenditures.
Christine Khaikin, deputy director at the Legal Action Center, a group that has been instrumental in uncovering questionable local spending, argues that the current approach falls short of true oversight. While the state budget now mandates public reporting of settlement expenditures by local governments, OASAS merely collects links to these reports without reviewing their accuracy or detail. This reliance on self-reported data leaves many, including members of the state’s Opioid Settlement Fund Advisory Board, frustrated with the agency’s narrow interpretation of its oversight role.
The Attorney General’s office, led by Letitia James, has been a prominent national figure in holding pharmaceutical companies accountable for their role in the opioid crisis. Her office has frequently publicized its efforts in securing billions in settlement funds for the state. However, when questioned about the office’s role in ensuring the appropriate expenditure of these funds, spokespersons indicated that oversight responsibilities lie with state and local partners, a stance that contrasts with the expectations of many who view the Attorney General’s office as a key enforcement entity. Senator Nathalia Fernandez, who chairs the Senate Committee on Alcoholism and Substance Use Disorders, believes the Attorney General’s office should play a more active role in enforcing the proper use of these funds, arguing that it would be a "shame for all of their work… to be misspent."
In contrast to New York’s Attorney General, officials in states like Michigan and Kansas have taken more proactive measures, issuing guidance lists that specify expenditures prohibited under settlement agreements. These lists often include law enforcement-related purchases that have drawn criticism from advocates in New York. The New York Attorney General’s office has not indicated whether it plans to adopt similar measures.
The role of the state Comptroller as a fiscal watchdog has also been suggested as a potential avenue for oversight. The Reason Foundation, a libertarian think tank, has proposed model legislation that would mandate independent financial reviews and transaction testing for recipients of substantial settlement funds, aiming to ensure compliance with intended purposes. While no state has yet adopted this model, New York’s Office of the Comptroller, Thomas DiNapoli, has confirmed it is conducting an audit focused on OASAS’s oversight of both state and local opioid settlement funds. This audit, along with similar actions taken by comptrollers and auditors in other states, offers a glimmer of hope for more focused and responsible allocation of these critical resources.
The ongoing management of these funds, which are expected to flow for more than a decade, presents a persistent challenge. Advocates and researchers express concern over reports of funds being used for seemingly unrelated purposes, such as financing concerts or constructing police shooting ranges. As Layal Bou Harfouch, a co-author of the Reason Foundation’s model law, notes, "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." The urgent need for stronger oversight and clearer guidelines is paramount to ensure that the legacy of the opioid settlement is one of genuine recovery and healing, rather than a missed opportunity.
