Spending Alabama’s opioid settlement funds

State has $276 million to spend after settlements

waving colorful flag of alabama state. macro shot

Over the course of 10 years, Birmingham attorney Chris Reid says he has represented many defendants accused of possession or use of illegal substances, including opioids.

Reid is retired now due to a disabling health issue, but he says that during his days as a lawyer, drug offense cases were a major part of his practice.

“I thought we had a really great approach to trying to help people, not just succeed in the courtroom, but also to help them with counseling and try to give them the tools to succeed in life,” he says.

Reid says helping clients find such tools as drug abuse programs added value to his legal work. “I think about 95% of my clients, I never had to re-defend, which is really good,” he says. 

Reid, who was a law clerk for Alabama Attorney General Steve Marshall while he was in law school and has served as an adviser to the governor, says he is hopeful that the $276 million settlement with two pharmaceutical manufacturers and a distributor to settle lawsuits over their roles in the nationwide opioid epidemic will do much to stem the state’s opioid problem, one of the worst in the country.

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Marshall declined to be interviewed for this story, but via press releases said that Alabama will receive $141 million from pharmaceutical distributor McKesson Corp., $70.3 million from Johnson & Johnson and $25 million from Endo Pharmaceutical. The agreement comes after Marshall withdrew Alabama from the multibillion-dollar national settlement late last summer in order to pursue its own individual claims. Oklahoma, Washington and West Virginia also chose to pursue their own claims.

Marshall has described the three agreements as affirming his decision to opt out of the national settlement. In a recent release he says the national settlement “did not adequately acknowledge the unique harm that Alabamians have endured and would have redirected millions of dollars to bigger states that experienced a less severe impact.” Also, the funds will come into state coffers more quickly than they would have in the national settlement.

The opioid agreement requires state and local governments to use most of the money on opioid use abatement and calls for at least 70% of the money to go to a list of abatement activities such as providing naloxone, a drug that reverses overdoses; helping house homeless people with addictions; or educating the public on the dangers of the drugs, among many other possibilities.

The money Alabama receives will go into the state’s general fund, with the legislature to appropriate the funds using a needs assessment from the Alabama Overdose and Addiction Council.

In a release, Marshall said, “I am grateful to each member of the Alabama Opioid Overdose and Addiction Council who has put in the time and energy to provide our legislators with a roadmap as they make critical decisions about the use of this money. We envisioned and developed a state plan long before there was any funding to make it a reality, and I am pleased that we can finally put our plan to good use.”

In addition to the funding for remediation, the state recovered about $40 million in attorneys’ fees and costs for the state and its subdivisions.

The state has remaining claims against opioid manufacturers Purdue Pharma, Mallinckrodt and Insys in each of their respective bankruptcy cases.

According to the Alabama Department of Health, last year an estimated 2.45% of the state’s population — more than 91,000 people — suffered from addiction to illicit drugs. According to the National Institute on Drug Abuse, Alabama has the highest per capita opioid addiction rate in the United States. 

The Alabama Department of Mental Health says that while the state’s per-
capita opioid prescription rate has been dropping since a national high of 143.8 prescriptions per 100 residents in 2012, it is still the highest.

In 2016, the rate was down to 121 prescriptions per 100 people and in 2018 it had slipped further to 97.5, which, according to the National Institute on Drug Abuse, was the highest in the nation and nearly twice as high as the national average of 51.4 prescriptions per 100 people.

Opioids are a class of prescription medications used for their analgesic effect and pain relief properties. They are generally prescribed to treat chronic moderate-
to-severe pain, most often following an injury or surgery. However, the specific function of opioid prescription medications and their effect on the human brain makes them highly addictive — especially when not used properly or taken for extended periods of time. 

Commonly prescribed opioids include hydrocodone, codeine, oxycodone, hydromorphone, morphine and fentanyl. Longer term use may make an individual need higher and higher doses in order to receive the pain relief benefits of opioids, which can result in drug addiction. 

Reid says he has spent a lot of time studying the opioid abuse problem. “It’s something that’s very near and dear to me just because I know so many people personally that were affected by that because my dad is a physician.”

Reid says his father, a geriatric and internal medicine physician, saw the damage caused by physicians writing large doses of pain-killing drugs. “He didn’t do that but a lot of other doctors did, so he saw the damage first hand,” Reid says.

“When I was in high school, this thing was kind of breaking out. He was telling me some pharmaceutical companies are completely being dishonest, they’re committing fraud, they’re trying to sell doctors that this is safe and reasonable but it’s really not and it’s destroying lives. My dad said that 20 years ago.”

Reid says 80% to 90% of his drug abuse or DUI clients were between the ages of 18 and 35.

“The younger they are, the better chance you have to actually help a person make better choices and adjust,” Reid says. “And so again, it’s just going the extra step, about not just dealing with their legal issues, which is why they hired you, but also, trying to get them some counseling and just trying to talk to them about what actually caused this.”

The Attorney General’s office has already announced some fund distribution from the opioid settlement that includes $1.5 million for the state’s specialty courts, which includes drug courts, veterans’ courts and mental health courts; $2.95 million to invest in the state’s forensic labs to improve quality and turn-around time in opioid-related cases; and $1.5 million to the Alabama Department of Child Abuse and Neglect Prevention.

Meanwhile, a coalition of more than 30 medical, academic, public health and advocacy organizations, coordinated by the Johns Hopkins Bloomberg School of Public Health, is urging state and local officials to avoid the mistakes of the 1998 tobacco settlement and use the opioid funds from the litigation to support
evidence-based efforts that save lives. 

Nationally, tension is building around the country on how to best spend the opioid settlement funds. Some public health experts cite the 1998 agreement with tobacco companies as a cautionary tale of runaway government spending and missed opportunities for saving more lives.

Mere fractions of the $200 billion-plus tobacco settlement have gone toward preventing smoking and helping people quit in many states. Instead, much of the money has been used to balance state budgets, lay fiber-optic cable and repair roads. And while the settlement was a success in many ways — smoking rates have dropped significantly — cigarettes are still blamed for more than 480,000 American deaths a year.

The Johns Hopkins Bloomberg School of Public Health has put together five guiding principles to guide jurisdictions in the use of funds from the opioid litigation — use money to save lives; use evidence to guide spending; invest in youth prevention; focus on racial equality and develop a fair and transparent process for allocating funds.

How will Alabama spend its funds? A lot of the questions will be answered when the legislature convenes next March 23, unless a special session is called to determine how to handle the funds. 

Former state Rep. Mark Tuggle, now chief of staff for House Speaker Mac McCutcheon, said on behalf of
McCutcheon, “In regard to the settlement, the funds have to be used for opioid abatement and I would tell you that the legislature would probably use the Alabama Opioid Council’s report as a framework for those appropriations, and again it is to mitigate the harm caused by the opioid crisis in Alabama. 

“Experts may want to weigh in on the actual expenditures, where those funds go, but in regard to the settlement, they’ve got to be used for opioid abatement.”

Tuggle says he was not around when the cigarette settlement occurred and “I’m not a subject matter expert on that, but I know going forward on this particular settlement we will follow the guidance of the attorney general, the Department of Public Health and whomever else we need to make sure that the money goes where it’s supposed to go.”

Bill Gerdes is a freelance contributor to Business Alabama. He is based in Hoover.

This story originally appeared in the August 2022 issue of Business Alabama magazine.

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