Municipalities await funds from multiple opioid settlements
Municipalities can expect millions of dollars to be poured into opioid treatment and prevention in Connecticut for years to come as national opioid settlements move along.
The state Attorney General's Office on Thursday announced a $6 billion settlement with Purdue Pharma and the Sackler family — 40% more than a previous, rejected settlement — after a two-month, court-mandated mediation. Connecticut will receive approximately $95 million from that settlement.
"After years of lies and denial, the Sackler family must now directly apologize for the pain they have caused. They must reckon face-to-face with the survivors of their reckless greed at a public hearing," Attorney General William Tong said. "This settlement is both significant and insufficient — constrained by the inadequacies of our federal bankruptcy code. But Connecticut cannot stall this process indefinitely as victims and our sister states await a resolution."
The final payments of the settlement are spread over 18 years, with larger payments to be made in the first stages of distribution and gradually being reduced over time.
Purdue Pharma L.P. is the producer of OxyContin, a highly addictive prescription painkiller. The state, along with municipal governments such as those of New London and Norwich, joined a class-action lawsuit against the pharmaceutical company in 2018. Purdue filed for bankruptcy in 2019 to protect itself from thousands of lawsuits.
A $4.5 billion bankruptcy settlement was reached last year but was appealed by multiple states, including Connecticut. The settlement allowed "the Sackler family to purchase lifetime legal immunity without so much as an apology," Tong said. A judge in December also rejected the settlement, ruling that bankruptcy courts could not provide legal protections to parties not in bankruptcy if others objected.
As part of the new $6 billion agreement, the Sackler family must apologize, allow institutions to remove the Sackler name from buildings and scholarships, and dissolve or sell Purdue Pharma by 2024. The agreement also authorizes Connecticut to use a portion of the settlement funds to establish an opioid survivors trust to directly aid survivors and victims of the opioid crisis.
Elizabeth Benton, a spokesperson from the state Attorney General's Office, said New London and Norwich will receive a portion of the $95 million for filing individual lawsuits but the exact breakdown for each has not been determined. She said other towns are likely to receive direct funds but the details and allocations also are yet to be determined.
However, municipalities that joined the separate $26 billion national opioid settlement in January will start to receive money after April.
In a news release last week, Tong announced the final approval of the $26 billion opioid agreement with the nation's three major pharmaceutical distributors — Cardinal, McKesson and AmerisourceBergen — and pharmaceutical company Johnson & Johnson.
The three distributors will collectively pay up to $21 billion over a period of 18 years. Johnson & Johnson will pay up to $5 billion over nine years, with up to $3.7 billion of that paid during the first three years.
Tong said it was a major milestone in the ongoing fight to hold the "addiction industry" accountable for the death and devastation of the opioid crisis. He said the manufacturer and distributors "reaped billions in profits from the pain and suffering of Connecticut families."
As the opioid crisis swept across America between 2006 and 2012, Connecticut's pharmacies dispensed more than 675 million opioid-based pills.
News of the settlements come as the region continues to see the ravaging effects of the crisis, with the state Department of Public Health issuing a public health advisory in mid-February in New London County regarding a spike in suspected drug overdoses, some of them fatal.
In late December, state officials urged all 169 municipalities to join the $26 billion agreement so that Connecticut could receive its full allocation of approximately $300 million. According to the news release, all municipalities have joined the settlement.
The defendants will start releasing funds to a national administrator on April 2.
Of the state's funding, about 70% will go directly to the state, another 15% will serve as direct payments to cities and towns and the last 15% will be managed by the state to benefit victims of the crisis and communities and to cover related legal fees.
Among the funds given to all municipalities, New London will receive an allocation of 1.05%, Norwich will get 1.16% and Groton will receive 1.4%, according to the settlement.
Tong and Gov. Ned Lamont have urged the state General Assembly to approve legislation to ensure the state's funding is dedicated toward evidence-based strategies to fight the opioid crisis.
In addition to the Johnson & Johnson and pending Purdue Pharma settlements, Norwich was one of 27 municipalities in five states to join a lawsuit against Collegium Pharmaceutical Inc. Norwich is one of only five Connecticut municipalities in the suit, and the only one in southeastern Connecticut. Other towns are Enfield, Middletown, Windham and Wethersfield, Norwich Corporation Counsel Michael Driscoll said.
The Norwich City Council approved a proposed settlement at its Feb. 22 meeting that calls for Collegium to pay an estimated $2.75 million, which would be distributed based on factors that include the population of the municipalities and "relative harm" as measured by historical opioid sales in each municipality.
Norwich is estimated to receive $29,399 in the proposed agreement.
The City Council resolutions anticipated using opioid settlement grants as reimbursement for added costs incurred from the opioid crisis, including budget increases for first responders, health insurance increases for employees and retirees, the cost of substance abuse treatment programs and "damages for the harms visited to the social fabric of the community," one resolution stated.
Norwich City Manager John Salomone said Norwich's portion of the proposed Collegium settlement would cover only a small portion of the costs the city has incurred in fighting opioid addiction.
In addition to emergency services responses, the city Human Services Department has run numerous prevention and response programs, including programs for recovery coaches, training for and distribution of the overdose-reversing drug Narcan, and opioid awareness and prevention programs.
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