As the opioid overdose epidemic and addiction crisis rage across the United States, state, local, and tribal governments have begun levying lawsuits against pharmaceutical and drug distribution companies. The lawsuits allege that these companies fueled the opioid crisis by marketing opioids in misleading ways, downplaying risks, exaggerating benefits, and engaging in reckless distribution practices. The lawsuits seek to recover costs associated with the opioid overdose epidemic. California has joined several lawsuits against manufacturers, distributors, and others responsible for aiding the opioid epidemic.
Janssen and Distributors Settlement Funds in California
In late 2022, cities and counties in California received the first round of funding from settlements with opioid manufacturer Janssen Pharmaceuticals (parent company of Johnson & Johnson) and the “big three” distributors, McKesson, AmerisourceBergen, and Cardinal Health (“the Distributors”). It’s estimated that California will receive approximately $2.05 billion from the Janssen and Distributors (J&D) Settlement Agreements through 2028. The vast majority of this money will be provided to cities and counties to be used for opioid abatement activities.
The funds received from these Settlement Agreements will be distributed as follows: 15% allocated to the State of California and used for future opioid remediation activities, 70% allocated to the Participating Subdivisions and used for opioid remediation activities, and 15% allocated to cities and counties that were Initial Plaintiff Subdivisions in the J&D settlements.
California’s State Share of J&D Settlement Funds
The State of State of California has received funds from opioid settlements including Janssen & Distributors (J&D) and McKinsey settlements. The monies received from these settlements will fund projects related to opioid abatement, remediation, treatment, and recovery services in California. California’s share of settlement funds will be deposited into the Opioid Settlements Fund (OSF) which is overseen and administered by the Department of Health Care Services (DHCS) and authorized through Government Code 12534.
The California Department of Public Health (CDPH), Department of Rehabilitation (DOR), and DHCS were allocated OSF in the fiscal year (FY) 2022-23 Budget. Funds allocated to DHCS for state identified opioid related projects, such as the SUD Provider Workforce Training project, will be released through a Request for Application (RFA) process, available to non-governmental agencies and posted on the DHCS, Community Services Division RFA webpage. The application for the Naloxone Distribution Project is currently available to various entities, including non-governmental agencies. For the other current projects and any other future authorized opioid settlement fund projects, non-governmental agencies may be able to apply for funding depending on the requirements for each project.
| Administered By | State Project | Description | Amount |
|---|---|---|---|
| DHCS | Naloxone Distribution Project (NDP) | Funding from the California settlement funds will be used to support the Naloxone Distribution Project (NDP). NDP aims to reduce opioid overdose deaths through the provision of free naloxone. For more information on the NDP, please visit the CaliforniaMAT NDP page. | $15,000,000 |
| DHCS | SUD Provider Workforce Training | Funding from the California settlement funds will be used to support providers to build out an SUD workforce with a focus on opioid treatment and to increase the number of licensed clinicians—including providers focused on addiction. The workforce build out will be for all SUD services with a focus on opioid treatment. | $51,113,000 |
| DHCS | ATLAS Platform Operation and Outreach Campaign | Funding from the California settlement funds will be used to operate a web-based statewide addiction treatment locator platform and related outreach campaigns for the Addiction Treatment Locator, Assessment, and Standards Platform (ATLAS). ATLAS provides multiple services in one: assessment tool, treatment locator, and quality ratings system that allow patients to search for addiction treatment centers and see which ones support best treatment practices. | $7,500,000 |
| DHCS | Shatterproof Statewide Anti-Stigma Campaign | Funding from the California settlement funds will be used to support a 15-month anti-stigma campaign led by Shatterproof. This national anti-stigma, evidence-based campaign has been proven to change public attitudes about people with addiction. This campaign is focused on all ages. | $1,700,000 |
| CDPH | Youth Opioid Education and Awareness & Fentanyl Education and Awareness Campaigns | Funding from the California settlement funds will be used to support and implement a Youth Opioid Education and Awareness campaign and a Fentanyl Education and Awareness campaign. | $40,800,000 |
| CDPH | Opioid Overdose Data Collection and Analysis | Funding from the California settlement funds will be used to support the California Overdose Surveillance Dashboard which tracks data on opioid overdoses. | $5,000,000 |
| DOR | Integrating Employment in Recovery Pilot Project | Funding from the California settlement funds will be used to establish a pilot program, Integrating Employment in Recovery, to provide training to the provider workforce on evidence-based practices to serve people with SUD as a part of holistic recovery. The training will focus on incorporating the full range of vocational rehabilitation services into treatment delivery as part of a whole-person approach to recovery, and developing supports for individuals returning to or transitioning into work during and following treatment. | $4,000,000 |
Participating Subdivisions Share of J&D Settlement Funds
California California Participating Subdivisions receiving J&D Settlement allocations from the CA Abatements Account are required to spend these funds on opioid remediation activities. For a list of allowable activities, please refer to the J&D Settlement Allowable Expenditures resource, which includes California’s designated High Impact Abatement Activities and a list of opioid remediation activities from Exhibit E of the National Settlement Agreements.
Resources for Participating Subdivisions
On December 7, 2022, DHCS held a listening session about J&D Settlement Reporting Requirements. A copy of the PowerPoint presentation and a recording of the Listening Session are now available on the DHCS webpage.
On January 26, 2023, DHCS held a webinar about J&D Settlement Allowable Expenses. A copy of the PowerPoint presentation and a recording of the webinar are now available on the DHCS webpage.
For more information about California’s opioid settlement funds, visit the DHCS website.
Questions on California’s Opioid Settlements
Questions about opioid litigation and participation can be directed to the Office of the Attorney General at OpioidSettlement-LocalGovernment@doj.ca.gov.
Questions about settlement payments can be directed to the Settlement Administrator, BrownGreer PLC, at DirectingAdministrator@NationalOpioidOfficialSettlement.com.