Opioid panel prepares for lower settlement payouts
State funding group to issue new recommendations
ALBANY — An advisory board that recommends how millions of dollars in opioid settlement funds will be spent is preparing for that windfall to shrink in the coming years.
While the state received about $200 million last year from those settlements, and is projected to receive close to that amount this year, the funding is expected to face a cliff in 2025.
“There’s quite a drop off from 2024 to 2025,” said Dr. Chinazo Cunningham, commissioner of the state Office of Addiction Services and Supports.
That was part of her message to the Opioid Settlement Advisory Board, a panel formed through state law to issue recommendations as to how that funding should be spent.
The funding comes from several lawsuits filed by localities and states, including New York, against opioid manufacturers and distributors who were alleged to have exacerbated the country’s overdose crisis due to the wide availability of those medications.
That included companies like Johnson & Johnson, which is expected to pay up to $230 million to New York through 2031, and a trio of drug distributors who agreed to send up to $1.1 billion to New York through 2038.
As recently as February, the state attorney general’s office was still securing funding from the companies. State Attorney General Letitia James, a Democrat, said a settlement with health care advertising company Publicis will net New York more than $19 million.
“For a decade, Publicis helped opioid manufacturers like Purdue Pharma convince doctors to overprescribe opioids, directly fueling the opioid crisis and causing the devastation of communities nationwide,” James said at the time.
The state hasn’t brought in any funding from a nationwide settlement with Purdue Pharma that was expected to send more than $200 million to New York.
That settlement had been stuck in legal limbo and ultimately made it in June to the U.S. Supreme Court, which decided to reject the settlement. It will now be renegotiated.
That won’t impact the state’s work combating the overdose crisis, said Peggy O’shea, chief budget examiner at the state Division of Budget.
“None of the numbers we have shared with the board counted on any of the money from the Purdue settlement,” O’shea said.
That still leaves New York with millions of dollars in funding over the next two decades to help fund addiction prevention services while offering support to those who’ve already fallen prey to addiction.
Federal data has shown a decline in opioid overdose deaths in recent months, but those numbers remain well above pre-pandemic levels.
That data, which is provisional, showed 2,971 opioid overdose deaths in May 2023 — the highest level in at least a decade. In January, the latest month of data available, that monthly figure had dipped to 2,661.
That decline hasn’t been fast enough for some members of the board, including Joyce Rivera, a harm reduction advocate.
“What we need is for the governor to basically say and declare this an emergency so that the folks on the ground who are the scouts can have a wider voice,” Rivera said.
If Hochul were to declare the overdose crisis as an official disaster emergency, that could allow the state to be more flexible with certain funding outside the settlement dollars, including in Medicaid.
Rivera moved for the board to call on Hochul to declare an emergency, but other members disagreed about the potential benefit of such an action.
“I just want to make sure I understand who controls the pot of money, whether it really is a public health emergency,” said board member Stephanie Marquesano.
The board initially approved the motion until a member retracted his vote in favor of hearing more about the legal implications of a public emergency.
About $335 million has been doled out in the last two years for areas like harm reduction strategies, including wider availability of overdose reversal devices and test strips that can detect deadly substances mixed in someone’s drugs.
The demand for those rose when the state funded public awareness campaigns over the last two years, Cunningham said.
“It was quite successful in driving people to our website and really getting Naloxone into the hands of people who want it free and easy to access,” she said. Naloxone is a drug that is used to reverse the effects of an opioid overdose.
The money has also been spent in several other areas, including addiction treatment and local government investments to implement programs at the local level.
But the rate of spending will soon have to slow, Cunningham told the board Wednesday.
“We will not be able to continue to fund all of the things that have been funded or are currently funded,” she said.
The advisory board is expected to release a report in the fall with recommendations on how the next round of funding should be spent.