Experts Debate the Best Ways to Use Opioid Settlement Funds

WASHINGTON — Policy experts and advocates debated the best ways to use opioid settlement funds during an event hosted by the American Enterprise Institute on Monday.

Opioid manufacturers and other stakeholders have been directed to pay billions of dollars as part of a national settlement spurred by a lawsuit over charges that they exacerbated the opioid epidemic. Total payments of around $50 billion are expected to be dispensed over roughly two decades.

A Brief History of Addiction Treatment

In the early 1970s, when Vietnam veterans began returning to the U.S. with opioid addiction, the Nixon administration funded about 12,000 addiction treatment programs. Their core approach was to try to instill discipline, gratitude, honesty, and humility in those in treatment and to have them acknowledge they were “powerless over the use of the substance,” said Thomas McLellan, PhD, founder of the Treatment Research Institute in Philadelphia and a former deputy director for the White House Office of National Drug Control Policy.

Why? Because treatment centers developed around the flawed premise that addiction is an innate “character disorder,” he said.

Now, after 50 years of research, experts no longer view substance use disorder as a character disorder, but the result of repeated use of drugs at high doses, which produces systemic changes in gene expression and impacts brain circuits, especially those related to control, motivation, inhibition, and reward sensitivity, McLellan explained.

Under this traditional treatment model, a patient received a “fixed program of care,” at a rehabilitation facility for 30, 60, or 90 days, he said, but these treatment programs failed because they weren’t designed to respond to true causes of addiction.

When addiction is viewed as a medical problem, the treatment looks different, he noted, and now involves the primary care team and, when necessary, specialty care and, in some cases, medications.

Regarding the opioid settlement payments, McLellan noted that while the “easiest thing to do” would be to reauthorize existing contracts for treatment programs, an analysis of adolescent addiction recovery programs in Philadelphia found “very little evidence-based practice going on.”

However, a previous policy effort in Delaware instituting performance-based contracts for outpatient addiction treatment programs did lead to meaningful results, he said.

Around 2001, Delaware received a 9% increase in funding, but the state’s health director at that time noted the low outpatient program occupancy rates — around 40% at best — and sought to make a change, McLellan said. The director told the programs that he would only give each one 90% of the payment they received the prior year, unless they were able to improve occupancy rates and patients’ length of stay, in which case they would be given 109% of their payments for the prior year. The programs innovated, and, as a result, occupancy tripled in roughly 5 years.

Law Enforcement’s Role: Helpful or Harmful?

One question raised during the discussion was whether to invest settlement payments in law enforcement.

“We’ve had a 50-plus-year drug war where we’ve arrested people and put them in jail. We know that’s not helping. We know that’s not evidence-based,” said Teresa Miller, JD, national director of health initiatives for the Legal Action Center in New York City.

Miller, who is also the former secretary for the Department of Human Services for Pennsylvania, urged policymakers to target spending at the community level instead, and to solicit feedback from the most impacted communities regarding “gaps in the continuum of care.”

“There are entities within the current system that have existing funding mechanisms, and there are those that don’t, and I would argue a lot of community-based organizations are in that [latter] category,” she said. “They do a lot of amazing work with very little money.”

Sally Satel, MD, a practicing psychiatrist and senior fellow at the American Enterprise Institute, noted that “I don’t think anybody thinks people who have drug problems should be in cells, but they should be under supervision.”

She said that there are a range of organizations (including the Legal Action Center) that have banded together to oppose opioid settlement funds from being directed to law enforcement and that’s a position she disagrees with.

“I think that a good use of money would be a drug court and also re-entry,” Satel said.

Drug courts, explained McLellan, are specialized programs in which a person who is charged with a drug-related offense may avoid jail by going into treatment, where they must submit regular urine tests. If they pass through the program successfully, their charge will be expunged.

Satel also noted that after people leave prison or jail and return to the communities where they previously used drugs, there’s a significant risk of overdose. “And so methadone and buprenorphine … and sometimes naltrexone are being started in prisons,” she said.

McLellan argued that it’s next to impossible to prevent people from relapsing when their communities are still overflowing with drugs. “We need law enforcement to reduce drug availability,” he said.

“I can’t tell you how many people I’ve evaluated 6 months after care saying, ‘Thank God my parole officer forced me into treatment. I wouldn’t have gone,'” he added.

Settlement Fund Spending to Date

In 2022 and 2023, state and local governments received roughly $6 billion in opioid settlement funds, according to Aneri Pattani, MPH, a senior correspondent for KFF Health News, who has been following these payments.

The largest share, about $416 million of funding, went to addiction treatment, including medications for opioid use disorder, residential facilities with counseling, and abstinence-based programs.

“Just because it’s going to treatment does not necessarily mean it’s going to evidence-based treatment,” Pattani said.

About a third of the funds were either spent or committed to various initiatives, a third was set aside for the future, and the remaining third was untrackable, as public reports were lacking, she explained. “So it’s not clear if they spent it, didn’t spend it, or how it’s being used.”

On average, states earmarked about 18% of funds for addiction and mental health; roughly 14% for recovery services, including housing, transportation, and legal support; 11% for harm reduction including naloxone (Narcan), the overdose reversal drug; and 9% for prevention programs. In addition, states dedicated about 2% for syringe exchange programs, according to Pattani’s reporting.

Interestingly, jurisdictions spent over $240 million on purposes unrelated to “opioid remediation”; however, Pattani noted that several jurisdictions channeled those monies to general funds, and one county set aside a portion of its funds for roads and bridges. In most of the settlements, it is legally permissible for 15% of funding to be spent on issues outside opioid remediation, she said.