'Local Officials Grapple With How to Spend Opioid Settlement Dollars' Transcript

November 17, 2022


Note: This transcript has been created with a combination of machine ears and human eyes. There may be small differences between this document and the audio version, which is one of many reasons we encourage you to listen to the episode!

Dan Gorenstein: For years now, there’s been a steady drum beat of these headlines.

News clip montage: “A milestone in an ongoing legal battle tonight to get drug companies to pay for their part in the nation’s opioid epidemic…. The nation’s two largest pharmacy chains CVS and Walgreens…Johnson & Johnson and three major US drug distributors…agreed today to pay $26 billion to settle claims that they helped fuel the opioid crisis. “

DG: Thousands of states, counties and local governments have won more than $50 billion dollars in settlements from opioid makers, prescription drug distributors and pharmacies for their role in the crisis.

But now these governments face the daunting task of figuring out how best to use those dollars to blunt an epidemic of drug addiction that has killed more than half a million people.

Today, how all that money is are forcing officials to reckon with long held beliefs and judgements about addiction.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.


DG: After years of court battles, states and local governments are now starting to get money to help their communities to try and recover from the devastation of opioids.

$50 billion dollars is a lot of cash.

But divided across 3,000 communities over two decades. Some places will just get a few thousand dollars each year.

To help us understand the challenges local officials are facing as they decide how to channel their money, we’re joined by producer Alex Olgin.

DG: Hey Alex.

Alex Olgin: Hi Dan.

DG: So, first question Alex, can governments spend the money any way they want?

AO: No, is the short answer. There are limits.

There are several settlements, Dan. But I want us to focus on the biggest one, a $26 billion-dollar deal between 46 states and Johnson and Johnson, and three prescription drug distributors, AmerisourceBergen, Cardinal Health and McKesson.

DG: And just to be clear – these companies are paying this money because of their aggressive marketing of opioids during the epidemic. And because of their tactics, these companies made a lot of money selling opioids to doctors and hospitals.

AO: That’s right. And the $26 billion will be disbursed over 18 years. 85% of it has to go to programs that help prevent opioid abuse or help those struggling with addiction.

You asked about controls on how the money is spent. The reason there are restrictions written into this deal is because of another deal back in 1998.

News clip: Today is a milestone in the long struggle to protect our children from tobacco.

Here’s President Bill Clinton announcing the $246 billion-dollar tobacco settlement.

News clip: This settlement between the state attorney’s general is clearly an important step in the right direction for our country.

AO: But actually Dan, those dollars flowed into the state’s general budget and much of it ended up not targeting tobacco smoking. Instead many of the settlement dollars plugged general state budget holes, built roads and in North Carolina some cash even went to subsidize tobacco farmers.

The Campaign for Tobacco Free Kids estimates less than 3% of the money earmarked to solve this problem has been spent on prevention and helping people quit smoking.

DG: Got it. So, it sounds like people who are trying to learn from the mistakes of the past, put a few guardrails in.

With less room for manipulation, how are state and local officials spending opioid settlement money, at least so far?

AO: The officials charged with that job have been asking Sara Whaley the best way to do it.

Sara studies opioid policy at the Johns Hopkins Bloomberg School of Public Health.

Sara told me that having control over some of this money is forcing officials to make difficult choices about what actually is helpful.

To do that they have to confront their own beliefs and ideas about opioid use.

Sara Whaley: States could take the dollars and put them into what they’ve been putting them into for years…. a larger jail… more police…Or, you know, states are getting this money. They could take this time to reflect and they could say, okay, we’ve been doing this is not working. 

AO: Sara has been advising seven states over the last few years providing technical assistance as part of a program called the Bloomberg Overdose Prevention Initiative.

And she says there’s a group of people who still have the view that drug use is a criminal justice problem. Sara’s advocating just the opposite. She encourages officials to focus their funds on keeping people who use drugs safe and alive, a philosophy known as harm reduction.

SW: The goal is not necessarily to keep people off of drugs, but to keep people alive and to prevent people from dying from drug use.

DG: Two clearly divergent views addiction as crime or addiction as illness

We’ve wrestled with this opioid epidemic for at least twenty years.

Alex, does one approach have more data behind it than another?

AO: Well, three treatment and harm reduction approaches have some very strong evidence behind them.

One, the gold standard treatment is prescribing medications like methadone and buprenorphine along with therapy or counseling.

And Dan, there are now dozens of papers that show it reduces the likelihood of overdoses, and people stick with this kind of therapy longer.

Two, the drug naloxone, which can reverse opioid overdoses, has done just that at least 200,000 times.

And three, giving people clean needles has been shown in dozens of studies over the last 30 years to be cost effective, reduce the likelihood of someone contracting HIV and Hepatitis C, and increase the likelihood someone will start treatment.

DG: And what about that other camp, Alex, addressing this as a law enforcement issue? What’s the evidence there?

AO: The US government pursued the war on drugs for about 40 years.

Arresting, prosecuting and imprisoning people for drug use.

Today, about half of federal inmates are incarcerated for drug related charges.

But reviews show this approach has not led lower rates of drug use, arrests, or overdose deaths.

DG: It sounds like there’s more convincing data behind the harm reduction approach. So how much of the settlement money is going there?

AO: Well Sara says it depends. It’s often up to state or local officials who are allocated the money.

SW: So it’s not as easy as just putting the money towards evidence-based programs. There’s this layer to it that that some of this stuff is political and personal and has a moral layer as well.

AO: Sara’s point, is that people’s opinions or judgements about addiction, more than evidence and data, are driving some officials to put dollars towards that criminal justice approach. Arguably these less effective methods. 

DG: Thanks, Alex.

After the break, how one local official met his assumptions about addiction head-on and the role transparency plays in these settlement agreements.


DG: Welcome Back.

We’re talking today about the $50 plus billion dollars coming to state and local governments as a result of the opioid settlement agreements with drug makers, prescription drug distributors and pharmacies.

Before the break Alex, you were talking about how this money gets spent can depend on how officials philosophically view addiction.

AO: Exactly, Dan one interesting piece to all this is that the settlement, having money to spend, is forcing state and local officials to reckon with how they view solutions to the crisis.

And that’s where Dave Baker comes in.

Dave Baker: I am a small business owner here out in western Minnesota…I just won my fifth election a couple of days ago. So, I’ll be entering my fifth term.

AO: Dave is a Republican state representative from Kandiyohi County about 100 miles west of Minneapolis.

He also chairs the state’s Opioid Epidemic Response Advisory Council, which distributes about $15 million dollars a year in fees the state imposed on opioid makers and distributors.

For years Dave saw addiction as a moral failing.

DB: I’m a conservative Republican, and I’m sort of old school…What about abstinence here? What about just saying no?

AO: The issue hit Dave deep. His son, Dan Baker, had died of an opioid overdose.

DB: He was a great kid…He was a good student. He was a good athlete…

AO: Like lots of people Dan was first prescribed opioids to treat pain…in his case, doctors prescribed it after he injured his back.

DB: And when this pill hit him, it changed everything in his brain. And he was the most tender-hearted kid there was.

AO: Dave told me he struggled to understand why his son kept using.

He didn’t know what Dan needed. He just knew the last thing he would do, would be to support his son’s habit.

DB: It was like this enabling system, like if I let my son live in the house and let him use, that’s enabling. I’m an enabler. And when you go to meetings, you learn. You don’t want to be an enabler if you really want to help your loved one.

AO: Friends called for help after Dan overdosed. Paramedics found him unresponsive. He was 25.

Dave came to understand addiction shortly after Dan’s death.

Helping people like his son is one reason he serves as chair of the Opioid Response council which was formed in 2019.

That’s where he learned more about harm reduction.

Dave visited methadone clinics and needle exchange programs.

He says the moment where it all clicked was in the spring in 2021.

He was on a call with people from two harm reduction groups who were desperate for help.

DB: They’re literally saying when people are coming here, they are dying on the streets because they don’t have any more needles to use…. We’re causing more problems with other epidemics …We’re killing more people by not having this available to them.

AO: During the meeting, Dave kept thinking about Dan.

DB: I remember thinking my son was laying on the floor when they when they got there to him, how long he had been passed, I don’t know, is probably just an hour or two. But I keep thinking of we need to get more resources out there.

AO: Right after that call, Dave says he knew he needed to start embracing more harm reduction like approaches.

Over the three years the council has been running, they’ve awarded more than half of their $5.7 million dollars in grants to groups that distribute or train people how to use naloxone, distribute clean needles or offer medication-assisted treatment.

DG: So that’s what the council has been doing with the fees the state has charged on prescription drug manufacturers and distributors.

What happens as these settlement dollars start rolling in?

AO: So, Minnesota is entitled to about 300 million over the next two decades.

Three quarters will go to the state’s 87 counties.

And Dave told me he’s worried, other officials may not have learned what he has.

The police department in Moorhead, a small city of less than 50 thousand has already decided not to have its officers carry naloxone.

Basically, Dave’s concerned some counties will blow the dollars on jails, or other law enforcement moves because they think about addiction the way he used to think about addiction.

DB: I hope they don’t do what I do…and take too much time to understand what addiction is. It’s not a moral failing… I have to remember, that’s how I felt ten years ago when I was screaming at my son saying, why are you using this? Why don’t you just stop? What are you doing? I didn’t understand.

AO: Local governments must report their spending to the council, but they have the power to do what they want. 

That’s why Dave’s working so hard to share what he’s learned. Why he’s so vocal about what happened with his son. Why he gives interviews.

He hopes to speed up the learning curve.

DB: It took me and thousands of other families to have a loss like this to get it. And that was wrong.

DG: Over the coming years, Alex, it sounds like state and local officials will continue to make lots of different choices. Some may continue the ‘war on drugs’ approach. Others will look to harm reduction.

AO: Yeah, that’s right.

You know, going into this reporting I really wondered what role evidence would play in people’s decisions.

Dave Baker told me that some communities in his state, including some Native American tribes and leaders of the Somali community, aren’t convinced of ‘evidence-based’ approaches like medication-assisted treatment.

These different choices leaders are making is why Johns Hopkins researcher Sara Whaley insists leaders must be transparent about how they are spending these settlement dollars.

SW: We’re holding these companies accountable for what they did to individuals, and to communities. And so, the money should be going to individuals and communities, right. Like it should be helpful to those people…. The state, I think, owes it to the community to show them where the money is going.

DG: Alex, listening to Sara there, I think about the $50 billion in settlement dollars. And given what we know about the life-saving effects of naloxone, for example, how communities spend this money really could be a matter of life and death.

AO: I think that’s why Sara is so adamant about transparency. And some officials are trying.

Rhode Island, for example, holds public meetings to allocate the money.

But the reality is, at this point, states and local governments have limited accountability. And that reminds people of what happened with the tobacco money. When so much of it was spent on things unrelated to helping people with the massive public health problem.

It’s why people like Sara and Dave are trying hard to avoid that part of history repeating itself.

DG: Alex, thanks so much for your reporting on this.

AO: You’re welcome.

DG: I’m Dan Gorenstein. This is Tradeoffs.

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Episode Resources

Selected Reporting and Research on Opioid Settlement Funds

Strategies for Effectively Allocating Opioid Settlement Funds (RAND-USC Schaeffer Opioid Policy Tools and Information Center, 2022)

Companies Finalize $26 Billion Deal With States and Cities to End Opioid Lawsuits (Jan Hoffman, New York Times, 2/25/2022)

A State-by-State Look at the 1998 Tobacco Settlement 23 Years Later (Campaign for Tobacco-Free Kids, 1/12/2022)

States could get billions from opioid lawsuits. They have to decide how to spend it (Andrew Joseph, STAT News, 7/30/21)

15 Years Later, Where Did All The Cigarette Money Go? (NPR Staff, 10/13/13)

Episode Credits


Dave Baker, Minnesota State Representative and chair of the state’s Opioid Epidemic Response Advisory Council

Sara Whaley, Opioid Policy Researcher at Johns Hopkins Bloomberg School of Public Health

The Tradeoffs theme song was composed by Ty Citerman, with additional music this episode by Blue Dot Sessions and Epidemic Sound.

This episode was reported by Alex Olgin and mixed by Andrew Parrella. Editing assistance from Cate Cahan.

Additional thanks to: Christine Minhee, Justin Berk and the Tradeoffs Advisory Board and our stellar staff!