How New York can learn from the tobacco settlement
The opioid epidemic continues to be a catastrophic and pervasive public health crisis across the United States. Overdose-related deaths have risen to more than 100,000 per year nationally. In New York State, the numbers now exceed 5,000; in New York City, they’re exceeding 3,000.
Beginning in the early 2000s, state and local governments began to bring litigation against companies for their role in the opioid epidemic. Most of these cases are now settled, and states, cities and counties across the country are starting to receive the initial payouts of approximately $56 billion that will last up to 18 years. New York’s share will total over $208 million, with state and local authorities responsible for deciding where the funds should go.
It’s imperative that investments be informed by the best evidence — and hard-won experience.
The lawsuits against pharmaceutical opioid manufacturers, distributors and pharmacies recall another major event in public health litigation: the Tobacco Master Settlement Agreement. In the mid-1990s, states sued the United States’ largest tobacco companies for the cost of smoking-related health care expenses accrued by state governments. The 46 state cases were settled for $206 billion paid out over 25 years.
In the ensuing decades, however, less than 3% of annual revenues from the settlement and tobacco taxes went to state tobacco prevention and cessation programs. Given that smoking rates have been declining nationwide, one might think the money was well spent. However, as of 2023, only Oregon and Maine are meeting the CDC’s recommended level of funding for tobacco control, and tobacco-related illness remains the leading cause of preventable death in the United States. For many states, tobacco settlement proceeds have been used to reduce existing state debts, fund large infrastructure projects and even subsidize tobacco farming — despite tobacco-related disease costs exceeding $260 billion annually in lost productivity and direct health care expenditures.
To avoid a repeat of the tobacco settlement, more than 60 organizations came together under the leadership of the Johns Hopkins Bloomberg School of Public Health (where we are faculty members) to create five guiding principles for states and localities to set up a solid process for opioid settlement dollars. Here’s how the current process in New York matches up with these recommendations.
As of 2023, only Oregon and Maine are meeting the CDC’s recommended level of funding for tobacco control, and tobacco-related illness remains the leading cause of preventable death in the United States.
One: Spend money to save lives.
The settlement with the three largest distributors of prescription opioids and Johnson & Johnson only requires that 85% of funds be spent on opioid abatement, but states have the discretion to do more. Jurisdictions should create a dedicated fund for all payments from opioid-related litigation, with the proceeds pointed to policies and programs proven to save lives from substance use and overdose.
To its credit, New York has followed this principle. A state law requires that New York allocate all litigation proceeds to eight different funds, including 36.39% to an opioid settlement fund, 17.5% to the state, and the remaining 46.11% for localities and local subdivisions. All funds must be spent on prevention, treatment, harm reduction and recovery services related to substance use disorders and co-occurring mental illnesses. None of the settlement funds will go into the general coffers.
Two: Use evidence to guide spending.
Researchers and clinicians have built a substantial body of evidence for addressing the opioid crisis. Jurisdictions should assess the landscape of available programs and policies through a needs assessment and then invest in promising or proven initiatives as part of a comprehensive strategy. An especially good idea is to invest opioid settlement funds in proven programs that are difficult to support through other existing grant mechanisms, such as harm reduction programs.
Here, New York’s effort is a work in progress. On Nov. 1, 2022, the advisory board for New York’s opioid settlement spending released its first annual report, which included spending priorities for the Office of Addiction Services and Supports, the state agency that will distribute state funds. Among other recommendations, the advisory board endorsed funding for overdose prevention centers, where people can go to use drugs in a safer environment and can connect with a wide range of support services and treatments. Evidence supports their use to prevent fatal overdoses and connect people to treatment and other services, while not increasing crime.
The Board recently released its second annual report on Nov. 1, 2023. The report presented 10 funding recommendations, which included investment across the continuum of care including harm reduction, recovery, treatment and prevention. These recommendations again include funding overdose prevention centers, noting support from the community.
Soon after this year’s report was released, however, Gov. Kathy Hochul again told reporters that she is not supportive of overdose prevention centers. The final decisions for the next round of funding have yet to be announced.
An especially good idea is to invest opioid settlement funds in proven programs that are difficult to support through other existing grant mechanisms, such as harm reduction programs.
Three: Invest in youth prevention.
Nearly as important as helping people with an existing substance use disorder through treatment and recovery is preventing new people from developing opioid use disorder in the first place. Investment in substance misuse prevention programs should include programs with a solid evidence base that shows they work.
New York’s opioid settlement advisory board is on the right track with prevention by prioritizing programs for young people. These include education on the biology of substance misuse and increasing programs that foster connections with trusted adults. As opposed to fear-based prevention strategies, these programs increase the likelihood of young people feeling empowered to make healthy choices. Many other districts across the country are prioritizing similar prevention strategies by investing in school-based mental health counselors, training for school social workers and nurses, and building up case management that provides early interventions to at-risk youth.
Four: Focus on racial equity.
Low-income neighborhoods and communities of color experience substance use disorders at similar rates as other racial groups. However, in recent years, the rate of opioid overdose deaths has been increasing more rapidly among Black Americans — and New Yorkers. Additionally, marginalized communities are more likely to face barriers to accessing high-quality treatment and support services. In spending opioid settlement money, jurisdictions should make a focused effort to ensure equitable access to services.
New York is on the right track here. Both the 2022 and 2023 annual reports’ recommendations are centered around two overarching priorities that address the changing landscape of substance use and overdose disparities. The 2023 report outlines the need to focus on equity by funneling dollars specifically to communities of color and those suffering from especially high overdose rates.
The advisory board for New York’s opioid settlement spending consists of 21 members, primarily with health and human service and government backgrounds — which is less diverse than the boards in other states.
Five: Develop a fair and open process for deciding where to spend the funding.
States and cities should recruit a diverse group of people to guide the process of spending litigation funds. These individuals should include public health experts, those with lived experience with the opioid crisis and community leaders. Deliberations should be transparent. And when decisions are made, they must be shared with the public.
Here, New York can make improvements. The advisory board for New York’s opioid settlement spending consists of 21 members, primarily with health and human service and government backgrounds — which is less diverse than the boards in other states. Over the last year, the advisory board process has already met controversy. Reports surfaced of board members complaining about delays. Advocates have also expressed concern that the board would not actually have meaningful input.
About 75% of health spending allocations in New York have a formal public reporting requirement. The remaining quarter are the allocations for local subdivisions. Recipients of settlement funds are required to report their spending plans to the state addiction agency and are required to meet the guidelines for “proper use” as outlined in the New York Opioid Settlement Sharing Agreement. To improve transparency, the state can make these spending decisions public, using a similar process to that in place for the state share.
Our bottom line: New York is off to a generally good start, and with some additional focus, the state can become a model for using the proceeds of litigation to change the trajectory of the overdose crisis.