January 27, 2023
On February 3, 2022, Attorney General Raoul announced that the State of Illinois and local governments that signed on to the agreement will receive a total of $760 million of the $26 billion national opioid settlement with Johnson & Johnson and three opioid distributors over the next 18 years. The Attorney General has since announced a number of other settlements reached, in coalition with other attorneys general around the country, with pharmacies and other opioid manufacturers. Illinois’ share of those settlements has yet to be announced. This blog will discuss in detail the national opioid settlement and the State of Illinois’ plan for using the $760 million as well as future additional settlement funds to address and mitigate the opioid crisis in Illinois’ communities.
The National Opioid Settlement
The opioid crisis in the United States has caused half a million deaths and resulted in multiple states investigating opioid manufacturers and distributors. Those investigations have focused on marketing practices and monitoring distributors’ orders. Over the last several years, across the country state attorneys general and local governments, including in Illinois, filed over 3,000 lawsuits against these manufacturers and distributors for their part in the opioid epidemic. The defendants in the lawsuits offered a $26 billion settlement, with states needing to convince their local governments to join the settlement to access the full payout.[1]
On February 25, 2022, the National Prescription Opiate Litigation Plaintiffs’ Executive Committee confirmed the participation of over 90% of litigating local governments nationwide in the $26 billion opioid settlement that was finalized with drug distributors. The drug distributors included AmerisourceBergen, Cardinal Health, McKesson and opioid manufacturer Johnson & Johnson. The settlements require 85% of funds to be allocated to programs that will help address the ongoing opioid crisis through treatment, education and prevention efforts. A total of 48 states, plus the District of Columbia and 5 U.S. Territories, have agreed to the Distributor Settlement Agreement.[2] This settlement, according to the plaintiff’s settlement group, is “the first of its kind to administer resources directly to the state and local governments specifically for relief programs to help rebuild the devastation caused by the opioid epidemic.”[3] The distribution of funds was based on population size and adjusted by the proportionate share of the opioid epidemic’s impact, which includes:
- the amount of opioids shipped to the state;
- the number of opioid-related deaths that occurred in the state; and
- the number of people who suffer opioid use disorder in the state.[4]
Initial deposits of settlement funds were dispersed to state and local governments as early as May 2022. The National Academy for State Health Policy (NASHP) has begun tracking state approaches to distribution of funds and includes details regarding each individual state’s laws, agreements and processes for allocating funds. Out of the 48 states receiving funds from the national settlement, California will receive the largest amount, $2.05 billion, and Wyoming will receive the smallest amount, $44.3 million. Illinois is one of eleven states to receive between $500 million and $1 billion worth of opioid settlement funds. Of those eleven states, Ohio received the largest amount at $808 million.
State of Illinois
The State of Illinois will receive $760 million in opioid settlement funds. The State plans to distribute these funds to overdose abatement programs. The programs include intervention services, medication-assisted addiction treatments, rehab centers, prevention programs, and buying and supplying Narcan, a medication that reverses overdoses. Twenty percent of the $760 million allocation will go directly to the State and another 25% will be split among counties and eligible municipalities. The 20% directly allocated to the State will be distributed by the Illinois Department of Human Services (IDHS) based on recommendations from an advisory board.[5] Local governments, according to the allocation agreement, must also use the funds they receive to support opioid remediation programs. The remaining 55% of funds were designated for the Illinois Remediation Fund to be used “exclusively for programs and purposes that address the opioid crisis in Illinois.” In order to administer the Illinois Remediation Fund, Governor Pritzker created through executive order in July 2022 the Office of Opioid Settlement Administration within the Illinois Department of Human Services. The executive order also created the Illinois Opioid Remediation Advisory Board within the Office of Opioid Settlement Administration to make advisory recommendations regarding the use of the funds in the remediation fund.[6]
The Advisory Board members were appointed by the Illinois Attorney General’s Office in consultation with the Illinois Department of Human Services (IDHS) and represent the state and local governments. The board members range from public health officials to behavioral health experts, including individuals from the Illinois Department of Public Health. Many of the Advisory Board members are working to ensure which organizations, such as rehab centers and local health departments, will receive allocations of the settlement funds.[7]
In 2022, the State received $30 million of the total $760 million allocation and used $2.7 million to expand community intervention services. The State is also expected to disperse an additional $15 million in 2023.[8] The State could also receive additional funds from recent settlements with pharmacy companies. The companies agreed to pay more than $13 billion for state and local government lawsuits that accused pharmacy owners of mishandling opioid painkillers. However, the settlements won’t be finalized until enough states and local governments agree to them.
Illinois is also expected to receive settlement funds from another national opioid settlement with pharmaceutical companies Mallinckrodt, Endo, Teva and Allergan for their role in manufacturing and aggressively selling opioids. At an Advisory Board meeting in September 2022, Advisory Board members revealed that Illinois will receive approximately $36 million from Mallinckrodt Pharmaceuticals over the next nine years.[9]
State Opioid Action Plan
Illinois released its first State Opioid Action Plan (SOAP) on September 6, 2017, based on three pillars of prevention. The three pillars are preventing the further spread of the opioid epidemic, providing evidence-based treatment and recovery services, and averting overdose deaths. Implementation of the Plan’s strategies began in the same year with the expectation that it would continue through 2020 and beyond. In 2020, the Council submitted 85 recommendations for the 2022 SOAP, which was reviewed by the Division of Substance Use Prevention and Recovery and the Illinois Department of Public Health. The recommendations were then assigned to various State agencies that could best address one of the three pillars of prevention issues.
The Illinois Opioid Remediation Advisory Board is scheduled to meet on a quarterly basis, including a meeting on January 12, 2023, where the members met to discuss key opioid abatement strategies, which include increasing access to Narcan and expanding the Illinois Prescription Monitoring Program (ILPMP). The Civic Federation will continue to monitor the national opioid settlement and the Office of Opioid Settlement Administration as funds are disbursed and plans are implemented to best serve Illinois communities most affected by the opioid crisis.
[1] See NACO, “Brief History of the $26 Billion Settlement,” available at https://www.naco.org/sites/default/files/documents/OSC_Timeline_20221102_0.pdf. See also Opioid Settlement Tracker and FAQs, available at https://www.opioidsettlementtracker.com/faq.
[2] National Overdose Prevention Network, “Opioid Settlement Dollars: A Breakdown of the Process and What it Means for Your Work in Overdose Prevention”, September 7, 2022, Available at https://www.opioidsettlementtracker.com/faq/#thebasics
[3] National Opioid Settlement, “Thousands of U.S. communities to receive opioid recovery funds from $26 billion global settlements as soon as May 2022”, February 25, 2022, Available at https://nationalopioidsettlement.com/wp-content/uploads/2022/02/Opioids_release_20220225.pdf
[4] National Opioid Settlement, “Thousands of U.S. communities to receive opioid recovery funds from $26 billion global settlements as soon as May 2022”, February 25, 2022, Available at https://nationalopioidsettlement.com/wp-content/uploads/2022/02/Opioids_release_20220225.pdf
[5] Press Release, Governor Pritzker and Attorney General Raoul Announce Next Steps in Combatting Opioid Epidemic, July 29, 2022, Available at https://www.illinois.gov/news/press-release.25240.html
[6] Executive Order 2022-19, Order Regarding The Administration of Settlement Proceeds Received from Illinois’ Opioid Litigation and Creating The Illinois Opioid Remediation Advisory Board and The Office Of Opioid Settlement Administration, August 30, 2022. Available at https://www.illinois.gov/government/executive-orders/executive-order.executive-order-number-19.2022.html
[7] Crain’s Business Chicago, “How will Illinois spend its opioid settlement windfall?”, January 5, 2023. Available at https://www.chicagobusiness.com/government/illinois-opioid-settlement-money-spending
[8] Crain’s Business Chicago, “How will Illinois spend its opioid settlement windfall?”, January 5, 2023. Available at https://www.chicagobusiness.com/government/illinois-opioid-settlement-money-spending
[9] Illinois Department of Human Services, Illinois Opioid Remediation Advisory Board Meeting, National Opioid Settlements Overview, p. 4, September 30, 2022. Available at https://www.dhs.state.il.us/OneNetLibrary/27897/documents/SUPR/OpioidAdvisoryBoardAGOPresentationfor9-30Meeting.pdf