Opioid Settlements Mean More Money for SUD Treatment Providers — But Amount, Timeline Unclear

Earlier this summer, Johnson & Johnson and the country’s three major drug distributors reached a $26 billion settlement in a deal with the attorneys general of several states for their role in the opioid epidemic, which has killed hundreds of thousands Americans and left many more on the wrong side of debilitating addictions and other illnesses.

That settlement money — and more generated from similar lawsuits — will go to states, local governments and communities across the country who have been affected by the opioid crisis. The billions of dollars will primarily be used for addiction treatment and prevention services, with the intention being to support behavioral health providers and give them resources to help those affected by the public health crisis.

Although it’s still unclear when the money will come and exactly where it will go, substance use disorder (SUD) treatment providers, rehabilitation centers and other behavioral health providers should expect proper support, experts say.


“Ideally, the opioid settlement funds will be allocated in a way that puts addiction treatment and prevention in the forefront,” Lawrence Weinstein, chief medical officer of American Addiction Centers (AAC), told Behavioral Health Business . “With so many influential people being of the same mind, it is likely that that will be the case.”

AAC is a ​​nationwide network of addiction rehab facilities that provides treatment for substance use disorder (SUD) and mental health disorders.

Weinstein told Behavioral Health Business that advocates have long been pushing for opioid settlement funds to be used to bolster behavioral healthcare and “other ancillary ventures to help communities heal from the decades-long opioid epidemic that is now primarily driven by fentanyl.” He hopes that thought will soon become a reality.


“Ideally, the opioid settlements will mean that behavioral healthcare providers will be able to offer their services and expertise to a greater number of people and aid in addiction treatment and prevention at a greater rate,” Weinstein said. “But the true course of action remains to be seen.”

With the settlement money, Weinstein said providers could improve accessibility for patients and increase salaries for addiction treatment professionals to help with retention and recruitment. Plus, it could help fund a greater investment in substance use prevention, establish medication-assisted treatment services in correctional facilities and finance a number of other programs and “endeavors that will provide some reprieve for hard-hit areas.”

Legal experts and behavioral health providers are still unsure about how much an addiction treatment facility or similar provider should expect when the drug distributors and Johnson & Johnson eventually pay up, but one thing is clear: No one wants a repeat of the 1998 tobacco settlement, where only a small fraction of the $246 billion has been spent on prevention and cessation programs.

A report released in 2018 found that in fiscal year 2019, states were expected to collect $27.3 billion in revenue from the 1998 tobacco settlement and tobacco taxes, but only 2.4% of it — or $655 million — was scheduled to be spent on prevention and cessation programs.

To avoid repeating history, it’s important that states not be able to securitize payments from opioid settlement money the way they could for the tobacco settlement, Robin Wilson, the director of the Institute of Government and Public Affairs at the University of Illinois, told BHB.

“Some of them at the end, they took a whole bunch of upfront cash and it looks like they filled in their own revenue holes with it,” Wilson said. “Then later, by the time they got all those, they were selling tobacco bonds. It’s kind of like borrowing money for your house, right? By the time it’s paid back, you pay five or ten times the amount of the house.”

Wilson, who also co-directs the College of Law’s Epstein Health Law and Policy Program, said it would be “deeply problematic” if states were able to sell off the stream of payments for the opioid settlement like they were able to with tobacco after 1998.

“This money is for people whose lives were destroyed,” Wilson said. “It can help with all kinds of things like medication assisted therapy. That stuff’s expensive and that’s for life. We’re talking about a really long time.”

Meanwhile, Weinstein is hopeful the settlement money will be used as it was intended, not to pad state budgets.

“All involved want to make sure that these funds aren’t used in a manner they were never intended,” he said. “The tobacco settlement funds went to states’ general funds and were used to fill potholes in some instances — this is something that many entities are working diligently to avoid.”

Mark Dunn — the director of public policy for the National Association of Addiction Treatment Providers (NAATP) — echoed Weinstein’s comments. He said that the industry learned a lot from the 1998 tobacco settlement and the focus will be on not repeating those mistakes.

“There are a lot of moving parts to this whole thing,” Dunn said. “But the positives, from my standpoint, is that the money is being directed in most cases to actually go to help people who were impacted by opioids. The money is not going to be used for other purposes, supposedly, and it’s not supposed to be used to supplant something that had already been appropriated. It should be new money to go out and help people to have access to treatment.”

The National Alliance for Model State Drug Laws is currently drafting a law that would ensure that if funds are dispersed in a certain state, the settlement money would be earmarked only for new programs and enhancements in the way providers are able to help existing and future patients.

Dunn said it’s “pretty impossible” to know how much each state involved in the settlement will get in return and how that money will be divided up. Nonetheless, it should be substantial and will make a difference for providers, he said.

“Many of these programs struggle to get paid or they get paid a very low rate that barely covers costs,” Dunn said. “We’re hopeful that they’ll actually get paid for the services they provide. And it will allow patients who don’t have any funds or means to get treatment the ability to make that happen, right? Because at the end of the day, it’s the people who suffer through this.”

Written by Patrick Filbin

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