Summary:
- The opioid crisis severely impacted communities across the US, prompting major lawsuits against pharmaceutical companies and resulting in a $26 billion national settlement in 2021, with NC receiving approximately $750 million.
- A large majority of NC’s settlement funds go directly to counties and municipalities to support evidence-based strategies like harm reduction, treatment access, and recovery support.
- The opioid settlement includes strict spending guidelines and transparency requirements to ensure funds are used for opioid-related initiatives.
The opioid crisis devastated communities across the United States, leading to widespread addiction, overdose deaths, and additional strain on healthcare and social services. The opioid crisis hit Appalachia harder than almost anywhere else in the country, leaving behind a devastating toll of addiction, overdose deaths, and strained social services. In North Carolina’s 31 Appalachian counties, the overdose death rate was 72% higher than in non-appalachian areas by 2017.
The national opioid settlement has changed that by holding the manufacturers, distributors and enablers of powerful and addictive opioids accountable and funding recovery efforts where they’re needed most. But four years after the first major settlement, a crucial question remains: Are these communities finally getting the support they need?
History of the Opioid Settlement
In response to the opioid crisis, multiple lawsuits were filed against pharmaceutical companies, wholesalers, and distributors for their role in fueling the epidemic. The eventual result was multiple nationwide opioid settlement agreements, including the largest one which was finalized in 2021 and involved major companies such as Johnson & Johnson, McKesson, AmerisourceBergen, and Cardinal Health This settlement aimed to provide financial relief to states and local governments to address the opioid crisis through prevention, treatment, and recovery initiatives.
Before he was elected governor, North Carolina’s then-Attorney General Josh Stein was one of the leaders of a bipartisan coalition of 46 states involved in this landmark lawsuit. Stein helped structure the terms of the settlement agreement with the opioid manufacturers and distributors, in which the vast majority of settlement funds go directly to counties and municipalities rather than being controlled at the state level. The State subsequently signed onto the settlement agreement and committed to using the funds for opioid treatment and remediation efforts.
How Much did North Carolina Receive?
As part of the $26 billion national settlement, North Carolina was awarded approximately $750 million to be distributed over 18 years. The agreement ensures that 85% of the funds go directly to local governments, while the remaining 15% is retained by the state for broader opioid-related initiatives. If you want to dig in more here’s our blog from 2024.
Each county and eligible municipality receives a portion of the funds based on factors such as opioid-related deaths, the number of opioid prescriptions, and the overall impact of the crisis in their area. For example, Mecklenburg County, which has been heavily affected by opioid overdoses, received one of the largest total allocations, while smaller rural counties received lesser amounts but still significant funding relative to their populations.
County-Level Programs and Initiatives
Different counties across North Carolina are focusing on various programs to combat the opioid crisis using the settlement funds. These programs align with the approved strategies outlined in the agreement:
- Buncombe County: Investing in harm reduction initiatives, including naloxone distribution and syringe exchange programs.
- Guilford County: Funding recovery support services, including peer education programs in schools and funding community outreach initiatives.
- New Hanover County: Expanding access to residential treatment facilities to support long-term recovery for individuals struggling with opioid addiction.
The North Carolina Opioid Settlement website provides an interactive dashboard tracking how counties are allocating their funds.
Comparing the Opioid Settlement to the Tobacco Settlement
The opioid settlement differs significantly from the 1998 tobacco settlement, particularly in terms of how the funds must be spent. The Master Settlement Agreement (MSA) with tobacco companies resulted in billions of dollars being paid to states, but there were few restrictions on how money could be used. Many states, including North Carolina, used the funds for purposes unrelated to smoking cessation or public health.
In contrast, the opioid settlement has strict guidelines to ensure the money directly addresses the opioid crisis and opioid-related issues. According to a report from Mitchell Hamline School of Law, the settlement agreement requires funds be spent on evidence-based opioid abatement strategies, such as treatment, recovery support, prevention programs, and harm reduction efforts. Additionally, the agreement mandates transparency through annual reporting and public dashboards to track spending, preventing the misallocation of funds that plagued the tobacco settlement.
Unfortunately, while the State of North Carolina is fully reporting where its 15% state share of the 2021 opioid settlement is going, other states and municipalities are less transparent. Many are being criticized for repeating the mistakes of the tobacco MSA. As ex-general counsel for the Office of National Drug Control Policy Robert Kent told the Washington Post, “The spirit of the settlements wasn’t to keep doing what you’re doing. It was to do more.”
Conclusion
North Carolina’s opioid settlement represents a critical opportunity to combat the opioid crisis through targeted, evidence-based programs at both the state and local levels. By ensuring that funds are directed toward prevention, treatment, and recovery, the settlement has the potential to save lives and create lasting change in affected communities. Unlike the tobacco settlement, which allowed for discretionary spending, this agreement maintains accountability and prioritizes public health. As counties continue to implement their initiatives, monitoring their effectiveness will be key to ensuring that the funds make a meaningful impact on reducing opioid addiction and overdoses in North Carolina.
