The Daunting Task of Allocating Opioid Settlement Funds

The Daunting Task of Allocating Opioid Settlement Funds

Local and state decision-makers across America, specifically those charged with allocating national opioid settlement dollars, face a daunting task: They must determine how to meaningfully spend the $54 billion in opioid settlement funds now flowing over 18 years. The funds are a result of legal agreements with the 14 major pharmaceutical opioid manufacturers, distributors, and retailers for their role in the addiction crisis. 

While most of the settlements specify that states must spend at least 85% of the payouts to address the epidemic, the actual allocation of funds varies by locale and has little oversight, recently prompting members of Congress to demand federal involvement. State and local governments have already received more than $3 billion combined, and no two states will spend the money in the same way. 

The stakes are high, not only because the funds are in the billions of dollars. Countless people stand to benefit from smart allocation decisions, especially over time. Every U.S. community has been touched by the opioid epidemic in some way; in 2022 alone, nearly 110,000 Americans died from drug overdoses, according to the Centers for Disease Control and Prevention. 

Still, best practices, as well as common pitfalls, for opioid settlement allocations have started to emerge. These best practices help to ensure a strong return on investment, which ultimately translates to saving lives. They complement the list of approved uses for remediation funds attached to the settlements.  

Navigating this complicated process is no small feat, especially because it ventures into unchartered territory. It differs from the Big Tobacco settlement of 1998 when state governments reached a 25-year, $246 billion deal with the country’s largest tobacco companies. That staggering sum was intended to hold the industry accountable for the lethal effects of smoking and provide support for anti-tobacco programs but instead was often spent on products and services completely unrelated to mitigating smoking’s harm, according to The Harvard Gazette

To help decision-makers in the United States learn how to most effectively allocate opioid settlement funds to address the ravages of addiction in their diverse communities, CHESS Health has developed a free, online resource, Opioid Settlement Fund Allocation Guide.

Best practices include a focus on evidence-based solutions; ongoing state and local coordination and discussion; asset mapping of existing funds; timely and accurate data systems; and determining how to fund opioid abatement programs and initiatives to continue sustainably over time, after the settlement funds have been disbursed. 

At the same time, pitfalls in the allocation process have surfaced, according to the RAND organization. They include using settlement funds to repay debts or replace current funds; spending funds immediately; turning to ineffective programs; ignoring equitable resource distribution; and disbursing settlement funds without evaluation or monitoring.  

To be clear, some of the best practices will vary due to demographics, while others are more universal. A focus on evidence-based solutions, for instance, makes sense because it reduces some of the guesswork in critical decision-making. 

CHESS Health, for one, provides evidence-based digital health solutions to address the individual and societal crisis of substance use disorder (SUD). Its comprehensive approach, which weds technological and human solutions, and offers linkages to care, prevention, and recovery support for SUD, is cited in peer-reviewed journal articles. Clinical studies have also validated CHESS Health’s innovative services; a study of its recovery app revealed a 31% reduction in patient relapse, a 71% reduction in re-hospitalizations, and a 20% higher likelihood of completing treatment. 

Moreover, state and local governments, health plans and payers, and behavioral health providers routinely partner with CHESS Health to offer support to communities ravaged by the opioid crisis. CHESS Health has multiyear, statewide implementations in Oklahoma, West Virginia, New Mexico, and North Carolina, among other public sector partnerships. 

Read more about Navigating the Opioid Settlement Funds. Access the free Opioid Settlement Fund Allocation Guide.