States Set Up Abatement Accounts for Opioid Settlement Dollars

May 14, 2021

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Across the country, state attorneys general have taken action against drug manufacturers and other related parties over their role in the opioid crisis, and in February 2021, a bipartisan coalition of attorneys general from 47 states, the District of Columbia and five U.S. territories announced a $573 million dollar settlement with McKinsey & Company, a consulting firm that works with drug manufacturers, for its part in promoting the sale of OxyContin and other opioid drugs. This multi-state settlement, along with future settlements from the 3,000 lawsuits brought by U.S. communities, is expected to channel millions of dollars to the states.

In anticipation of receiving these funds, state legislatures are taking steps to advance legislation that sets up mechanisms to ensure that the settlement funding is directed to support opioid treatment, prevention and recovery programs. These mechanisms, typically created as trust or abatement accounts, establish oversight bodies and create rules and criteria for how states and local governments can spend the money.

In 2019, Colorado, Delaware, and Maryland were among the first states to pass laws that established oversight bodies and created trust accounts. Similarly, in 2020, Utah, Missouri, and New Hampshire, rather than risk having settlement funds spent on expenses unrelated to the opioid crisis, passed provisions requiring that the state dedicate settlement funds to addiction treatment programs and other public health measures aimed at mitigating the opioid epidemic.

More recently, in 2021, Kentucky, Illinois and New York were among a number of states that introduced abatement fund legislation. Kentucky’s HB 427, which has been signed by the governor, established the Kentucky Opioid Abatement Advisory Commission to provide for the distribution of settlement moneys. Illinois introduced HB 3249 (which is still pending) that creates the Opioid Settlement Fund, which requires that settlement dollars are used for purposes related to alleviating the opioid crisis. New York has also introduced A2466 (referred to the Alcoholism and Drug Abuse Committee), which creates an opioid settlement fund and provides that the funds are used to support programs that combat substance use and addiction issues and co-occurring mental illnesses.

In Virginia, SB 1469, which has been signed by the governor, established the Opioid Abatement Authority which, with the assistance of the Office of the Attorney General, is tasked with administering the fund, including the issuance of grants and loans, for the purposes of treating, preventing and reducing opioid use disorder.

While the opioid crisis has largely been overshadowed by the COVID-19 pandemic, the crisis continues to claim thousands of lives and is one of the country’s most pressing issues. The establishment of these legislative frameworks will better enable states to proactively prepare and spend this money in ways that can effectively combat addiction.