The Impact, Challenges, and Promises of the Opioid Settlement Funds

Introduction to Opioid Settlement Funding 

Every community in the United States has been touched by the opioid epidemic, which shows no signs of abating.  In 2022 alone, nearly 110,000 Americans died from drug overdoses, according to the Centers for Disease Control. Of those deaths, an estimated 84,000 (76%) involved opioid drugs. The surge in opioid-involved overdose deaths has been nothing less than dramatic, rising from 21,089 in 2010, CDC statistics show. 

As a result, this class of drugs, defined as prescription opioids (natural and semi-synthetic opioids and methadone), heroin, and synthetic opioids other than methadone (primarily fentanyl, up to 50 times more potent than heroin), has received much attention.

This is also why the allocation of the opioid settlement funds – more than $54 billion over a multi-year period – holds such promise. If the funds are spent wisely, reach diverse populations, and incorporate both human and technological approaches to prevention, treatment, and recovery, the impact will be unprecedented. 

But first, some background. 

About the Opioid Epidemic

The opioid epidemic has shifted over time, with certain populations more deeply affected than others, though anyone who takes opioids for pain can become addicted to them. In addition to the demographics of the crisis, decision-makers should also familiarize themselves with the history and trajectory of the U.S. opioid epidemic, as well as the importance of addressing health equity and the social determinants of health (SDOH), so that allocation choices have maximum impact.  

Today, most opioid overdoses are now connected to illicit fentanyl use though the epidemic can trace its origins to the overprescribing of this class of drugs for pain management, beginning in the 1990s.

The alarming rise in opioid overdose deaths can be outlined in three distinct waves, according to the CDC. After the first wave of the 1990s, a second wave emerged in about 2010, when overdose deaths involving heroin skyrocketed. The third wave began in 2013, with significant increases in overdose deaths involving synthetic opioids, particularly those involving illicitly manufactured fentanyl. The market for such fentanyl continues to change, and it can be found in combination with heroin, counterfeit pills, and cocaine. From 1999 to 2021, nearly 645,000 people died from an overdose involving any opioid, including prescription and illicit opioids, CDC statistics show. 

In addition, those without health insurance, who have been incarcerated, who have disabilities, or who live in poverty, among other factors, are at greater risk of fatal opioid overdose, according to the Mortality Disparities in American Communities Study (MDAC). “In response to the changing epidemic, increased focus has been recommended not only on supply chains for prescribed and illicit opioids but also on root societal causes of opioid dependence,” the MDAC study states. The research focused on additional factors vis-à-vis opioid deaths, including (but not limited to) educational attainment, housing status, and employment. 

Notably, overdoses in certain minority communities have recently surged, widening the mortality gap between white people and people of color. In 2020, for instance, Black men 65 and older died of overdoses at seven times the rate of white men of the same age, according to the CDC. And in U.S. counties with more income inequality, there were greater disparities in overdose deaths, particularly among Black people. 

Among the general population, only 18% of individuals with SUD receive treatment. This startling gap is even more pronounced among Black, Indigenous, and people of color, or BIPOC, communities. By way of example, only 10% of African Americans, 8% of Latinx individuals, and 3.5% of Native Americans (American Indians and Alaska Natives) with SUD receive treatment.

In other words, a drug crisis once seen as largely affecting white people now disproportionately harms people of color. 

About the Opioid Settlement Funds

Across the nation, since 2022, almost $55 billion in opioid settlement funding, made available through various agreements, has started to flow to states, counties, cities (and other localities), and tribes. The money will be disbursed through 2038 and is meant as restitution for hard-hit communities and the hundreds of thousands of Americans who have died from drug overdoses in recent decades. 

The settlements, reached between states and localities and 16 major pharmaceutical opioid manufacturers, marketers, distributors, and retailers (to date), are the result of opioid-related lawsuits that include $26 billion awarded to 46 states as part of the National Opioid Settlement. State and local governments have already received more than $4 billion combined. 

The opioid settlement agreements also starkly contrast to the Big Tobacco settlement of 1998, when state governments reached a 25-year, $246 billion deal with the country’s largest tobacco companies. That staggering sum was intended to hold the industry accountable for the lethal effects of smoking and provide support for anti-tobacco programs but instead was often spent on products and services completely unrelated to mitigating smoking’s harm. 

It is therefore no surprise that many of the opioid settlement agreements stipulate that state and local governments must spend most of the money – some 85% – on addiction and harm reduction, treatment, and prevention. The more than $54 billion is certainly a large sum, yet it cannot be allocated to every harm reduction, treatment, recovery, and prevention program in the United States. Still, if smartly disbursed, the funds can jumpstart major changes, which is why those now making allocation decisions face a daunting task. 

Among Localities, A Lack of Uniformity 

Already, one major challenge has surfaced. The allocation of funds differs greatly by locality because there is not much uniformity in spending from state to state; further, funding decisions are not always executed transparently. As a result, decision-makers may find it arduous to learn from each other’s mistakes or replicate each other’s successes. States are also spending at different rates, and no two states will allocate funds in exactly the same way. 

Some states have even instituted councils, which wield immense power in making spending decisions, according to KFF Health News. Journalist Aneri Pattani writes, “Are the right people steering the decisions? Already, stakeholders are beginning to point out concerns they have about their specific state councils.” These concerns include council membership not aligning with the states’ hardest-hit populations; a heavy presence of specific professional groups; and few seats going to people who have dealt with a substance use disorder or supported a family member with one, she reports. 

In response to the lack of transparency and uniformity in the allocation process, some members of Congress have even demanded federal intervention, via the bipartisan Opioid Settlement Accountability Act, introduced in early 2024. 

Tracking settlement spending is no simple feat. The most cited resource is probably Christine Minhee’s Opioid Settlement Tracker, which houses multiple resources, including a breakdown of state spending thus far and state-level guides for community advocates on opioid spending. 

4 Areas of Focused Investment for Opioid Settlement Funds 

Before elucidating specific best practices and guidelines for settlement spending, it is worth noting that over time, four universal areas of investment will increase the impact of settlement dollars. 

• First, there needs to be a greater capacity to treat individuals with substance use disorder. The ongoing national shortage of behavioral health counselors deeply impacts individuals with SUD, who often need treatment professionals trained in that specialty. Currently, 46.3 million Americans grapple with SUD, yet only a fraction of them receive specialized treatment, according to the 2021 National Survey on Drug Use and Health conducted by the Substance Abuse and Mental Health Services Administration (SAMHSA). With that in mind, an infusion of funds for increasing the number of qualified counselors will result in sustainable change, especially in underserved rural areas. 

• Second, while expanding such access is essential, individuals in recovery need more than just counseling. The 167 hours between weekly in-person counseling visits should be supplemented with access to peer specialists, who provide a sense of community. The incorporation of peer support into every level of prevention and treatment for SUD is clinically proven and dramatically lessens the risk of relapse. Creating this sense of community can happen in person or virtually, which would make this method of support available to more people.

• Third, any investment in expanding capacity and supporting recovery will be unsuccessful unless more individuals initiate treatment. As addiction has become recognized more widely as a health issue, people can now start treatment via myriad pathways in their communities, including emergency rooms, social services, and interactions with law enforcement (deflection programs). Making sure people stay in treatment still presents a formidable challenge, however, which is why community leaders and others should focus on the treatment referral process, ideally a combination of digital and human resources, to ensure success. A focus on the initiation of treatment is not sufficient, however; prevention efforts combined with tools that support long-term recovery are also essential. 

• Fourth, while the allocation of settlement funds should benefit those currently struggling with SUD, local and state governments must do more in terms of prevention. Only then will we change the trajectory of a crisis that already has killed so many. Targeted efforts that draw from universal concepts, rather than yet another ad campaign, would be most effective. For instance, a 15-year-old high schooler considering cannabis use as a salve for anxiety requires a different toolkit than a veteran addicted to opioids originally prescribed for chronic pain. Here, too, digital screening tools could be leveraged for maximum impact.

Strategies for Allocation and Best Practices

Each of the 2022 National Opioid Settlements includes a list of approved uses for the settlements’ remediation funds. The approved uses as well as the “core strategies” are listed as part of the settlements, which are substantially identical to one another, though there may be some differences between states. 

The core strategies, which account for a range of priorities for reducing opioid-related deaths and investment in SUD prevention, treatment, and recovery infrastructure, include:

• the expansion of training for the administration of Naloxone or other FDA-approved drugs to reverse opioid overdoses;
• Medication-Assisted Treatment (MAT) distribution and other opioid-related treatment;
• educational efforts;
• warm hand-off programs and recovery services;
• recovery treatments for pregnant women and services that include housing, transportation, job placement/training, and childcare;
• treatment for babies suffering from conditions caused by being exposed to opioids in the womb;
• treatment of justice-involved individuals with SUD; and
• prevention programs and syringe service programs. 

Many of the strategies also call for uninsured and underinsured individuals to have greater access to treatment and other programs. 

Other entities have provided overarching spending guidelines as well. 

The Johns Hopkins Bloomberg School of Public Health convened a coalition of more than 30 medical, academic, public health, and advocacy organizations, which offered additional guidelines for spending, known as “Principles for the Use of Funds From the Opioid Litigation.” The five principles for consideration include spending money to save lives; using evidence to guide spending; investing in youth prevention; focusing on racial equity; and developing a transparent and fair decision-making process.  

The coalition further expands upon these basic concepts to include best practices. For instance, in illuminating why it is crucial to focus spending on saving lives, the group cautions, “Given the economic downturn, many states and localities will be tempted to use the dollars to fill holes in their budgets rather than expand needed programs. Jurisdictions should use the funds to supplement rather than replace existing spending.”  

According to another guide from the Johns Hopkins Bloomberg School of Public Health, “Ten Indicators to Assess the Readiness of State and Local Governments to Receive the Opioid Settlement Funds,” state and local decision-makers “should begin taking action now to prepare for the influx of these dollars and ensure that they are used to save the most lives. Legislation is one tool that states and local jurisdictions can use to prepare for the funds; many states have already passed such legislation.” 

Officials will want to employ other best practices to ensure a significant return on investment, which ultimately translates to saving human lives and mitigating lifelong harms from opioid misuse. 

Best practices may also include, but are not limited to: a focus on evidence-based solutions; ongoing state and local coordination and discussion; asset mapping of existing funds; timely and accurate data systems; and determining how to fund opioid abatement programs and initiatives to continue sustainably over time, after the settlement funds have been disbursed. 

At the same time, pitfalls in the allocation process have surfaced, according to the RAND Corporation. They include using settlement funds to repay debts or replace current funds; spending funds immediately; turning to ineffective programs; ignoring equitable resource distribution; and disbursing settlement funds without evaluation or monitoring.  

Some of the best practices will vary due to demographics, while others are more universal. A focus on evidence-based solutions, for instance, makes sense for all because it reduces some of the guesswork in critical decision-making. 

“Jurisdictions run the risk of using new dollars on programs that do not work or are even counterproductive if they do not rely on evidence to guide the spending,” according to the Johns Hopkins-based coalition of experts. “As one example, people with opioid use disorder in many residential treatment facilities are prohibited from being treated with methadone or buprenorphine, despite evidence that these medications reduce the chance of overdose death by 50% or more. To address this gap, jurisdictions can use the dollars to help residential programs transition to offering a full range of medication treatment options.”

The Role of Technology to Address the Opioid Crisis

Technology, especially when coupled with more traditional approaches, can help to amplify the impact of settlement dollars, for myriad reasons. 

It can fortifies the work of treatment providers, resulting in increased retention in treatment, sustained recovery, and better long-term outcomes. People in outpatient treatment typically spend one hour a week with a provider and 167 hours on their own, and benefit from robust virutal access to peer specialists, who reduce isolation and provide a human connection, sense of community, and can provide 24/7 crisis support.

It allows people in rural areas, as well as other underserved populations, to have consistent access to support, especially at a time when there is a dearth of behavioral healthcare providers. By reaching these groups, technological approaches to SUD also work to address the social determinants of health and health equity concerns. Smartphone apps and other online approaches are also ideal for those grappling with common co-occurrences like anxiety or who reside in areas where stigma is attached to recovery.

Technology can also result in cost savings. SUD is one of the costliest health conditions in the United States and affects individuals, their families, and society at large. When more people are properly screened and treated for SUD, there are fewer medical-related consequences, such as hospital stays, and fewer societal costs, such as work loss.

Especially when coupled with more traditional modalities, technology helps to optimize efficiency, positively impact patient satisfaction and care plan adherence, facilitate cross-organization collaboration and coordination, control costs, and advance health equity. As decision-makers across the country carefully consider worthwhile approaches to ensuring opioid settlement dollars generate the greatest return on investment, proven technology is a critical part of the equation.

Interestingly, such innovative solutions to the epidemic may create another positive and related byproduct: The overall alleviation of strain on an overburdened American healthcare system. This goal is aligned with the Quintuple Aim of Healthcare, a guiding principle of systemic reforms that include the pillars of better outcomes, lower costs, improved patient experiences, improved provider experiences, and health equity.  

CHESS Health as Partner

CHESS Health provides evidence-based digital health solutions to address the individual and societal crisis of substance use disorder. Its comprehensive approach weds technological and human solutions and offers linkages to care, prevention, and recovery support for SUD.

CHESS Health’s comprehensive tools, which span the entire lifecycle of SUD management, include ePrevention, automated SBIRT to bolster community prevention efforts and identify individuals at risk for SUD to help prevent its onset or refer to treatment; eIntervention, a closed-loop referral system to connect those at risk with essential services; and eRecovery, ongoing support for individuals during treatment and recovery. These solutions can be applied in tandem or stand on their own. All are delivered through partnerships with healthcare providers, community organizations, tribal organizations, state and local governments, and health plans. CHESS Health has multi-year statewide implementations among other public sector partnerships. CHESS Health amplifies the impact of these agency partners, by offering tools and resources that increase reach, access, and effectiveness from presention and intervention through treatment and ongoing recovery.

Not only are its approaches cited in peer-reviewed journal articles. National organizations, such as the National Institutes of Health (NIH), recognize the potential of CHESS Health’s products in addressing the opioid crisis. CHESS Health’s Connections app, a smartphone app that is part of eRecovery, is part of a five-year NIH clinical trial, managed by the National Institute on Drug Abuse, to find scientific solutions to the opioid crisis. Further, the Connections app offers a peer-moderated community, a library of recovery and coping skill resources developed to reinforce what individuals are learning in provider-led sessions, on-demand cognitive behavioral therapy (CBT) modules, and virtual support meetings. At any time of the day or night, individuals can connect with a trained peer recovery specialist who can help manage risk moments – such as triggers, cravings, anxiety, and negative thinking – to avoid relapse and remain in therapy. A Spanish-language edition of the app, Conexiones, provides the same evidence-based features as the original app while addressing particular challenges often faced by members of Latinx communities. The Conexiones app offers culturally appropriate content and peer support from native Spanish speakers.

Conclusion 

As settlement funds continue to shift to state and local governments, new and salient information will undoubtedly surface about how to maximize their impact, and decision-makers will need to monitor developments on how to best allocate the money—individuals, families, and society as a whole stand to benefit.