$50 Billion and Counting: The Opioid Settlement Funds — Where the Money Is Going, and Whether It Will Make a Difference

The tobacco settlements of the 1990s offer a cautionary tale. States received more than $200 billion from tobacco companies over 25 years — money that was supposed to fund smoking cessation programs, healthcare for tobacco-related illness, and public health infrastructure. Instead, most of it went into general revenue funds, used to plug budget holes and fund unrelated programs. By 2020, less than 3% of tobacco settlement funds were being spent on tobacco prevention and cessation. The opioid settlements include provisions designed to prevent the same outcome. Whether those provisions will be effective is the central question of the next two decades of opioid policy.

The Settlements: Who Paid, How Much, and When

The opioid litigation involved thousands of lawsuits filed by states, counties, cities, and tribal governments against virtually every entity in the opioid supply chain: manufacturers who made the drugs, distributors who shipped them, pharmacies that dispensed them, and consultants who advised on marketing strategies. The litigation was consolidated in federal multidistrict litigation in the Northern District of Ohio, with Judge Dan Polster presiding over the most complex mass tort litigation in American history.

The major settlements were reached in waves. The "Big Three" distributors — McKesson, Cardinal Health, and AmerisourceBergen — reached a $21 billion settlement in 2021, to be paid over 18 years. Johnson and Johnson, the manufacturer of Duragesic (fentanyl patches) and a promoter of opioid prescribing through its subsidiary Janssen Pharmaceuticals, settled for $5 billion in 2021. Purdue Pharma, the maker of OxyContin, reached a $6 billion settlement through its bankruptcy proceedings in 2022, though the settlement was complicated by legal challenges to the liability releases it provided to members of the Sackler family.

The pharmacy chains — CVS, Walgreens, and Walmart — settled for a combined $13.8 billion in 2022 and 2023. McKinsey and Company, the consulting firm that had advised Purdue Pharma on strategies to "turbocharge" OxyContin sales, settled for $573 million in 2021. Teva Pharmaceuticals settled for $4.25 billion. Allergan (acquired by AbbVie) settled for $2.37 billion. The total of major settlements exceeded $50 billion by 2024, with additional cases still pending.

The Abatement Framework: What the Money Is Supposed to Fund

Unlike the tobacco settlements, the opioid settlements include detailed "abatement" frameworks specifying how the money must be spent. The frameworks — negotiated by state attorneys general and incorporated into the settlement agreements — require that the vast majority of settlement funds be spent on opioid abatement: treatment, recovery support, harm reduction, prevention, and related public health infrastructure.

The Big Three distributor settlement, for example, requires that 85% of the funds be spent on opioid abatement, with only 15% available for attorneys' fees and other costs. The settlement includes a detailed list of approved uses — known as "Exhibit E" — that specifies dozens of categories of abatement spending, from medication-assisted treatment (MAT) programs to naloxone distribution to recovery housing to workforce training.

The abatement frameworks represent a significant advance over the tobacco settlement model. But they have limitations. The frameworks specify categories of approved spending, not specific programs — states and localities have significant discretion within the approved categories. And the frameworks are enforced through a combination of reporting requirements and oversight committees, not through the kind of independent monitoring that would be needed to ensure compliance.

Where the Money Is Actually Going

The Opioid Settlement Tracker, a project of the Johns Hopkins Bloomberg School of Public Health, has been monitoring how states and localities are spending settlement funds since the first payments began flowing in 2022. Its findings are mixed. Some states — including North Carolina, West Virginia, and Ohio — have established robust abatement programs with strong oversight mechanisms and are spending funds on evidence-based interventions. Others have been slower to develop spending plans, have allocated funds to programs with weak evidence bases, or have used settlement funds to supplant rather than supplement existing opioid treatment budgets.

The most common uses of settlement funds in the first three years of distribution have been medication-assisted treatment programs (buprenorphine, methadone, and naltrexone), naloxone distribution, recovery housing, and workforce training for addiction treatment providers. These are all evidence-based interventions with strong research support. Less common — but increasingly funded — are harm reduction programs such as syringe service programs and fentanyl test strip distribution, which have faced political resistance in some states despite strong evidence of effectiveness.

Emergency departments have been significant beneficiaries of settlement funds in several states. Programs that initiate buprenorphine treatment in the ED — the "ED-initiated MAT" model pioneered at Yale and subsequently adopted at hundreds of hospitals — have received settlement funding in Ohio, Massachusetts, and several other states. The model has strong evidence: a landmark 2015 NEJM study found that patients who received buprenorphine in the ED were twice as likely to be engaged in addiction treatment 30 days later compared to those who received only referrals.

The Sackler Controversy and the Limits of Accountability

The Purdue Pharma settlement was the most legally complex and politically contentious of the opioid settlements. Purdue filed for Chapter 11 bankruptcy in 2019, and its reorganization plan included a $6 billion settlement funded in part by members of the Sackler family — the billionaire owners of Purdue who had received approximately $11 billion in distributions from the company between 2008 and 2017.

The settlement included a provision that would have released the Sackler family members from civil liability for opioid-related claims — even though they had not themselves filed for bankruptcy. The provision was challenged by the U.S. Trustee and by several states, and the Supreme Court ruled in June 2024 that the bankruptcy code did not authorize such a release. The ruling sent the Purdue settlement back to the bankruptcy court for renegotiation, and a revised settlement — with a larger Sackler contribution and more limited liability releases — was reached in late 2024.

The Sackler controversy highlighted a fundamental tension in the opioid litigation: the goal of maximizing compensation for victims and funding for abatement programs sometimes conflicted with the goal of holding individuals accountable for their role in the crisis. The settlements produced enormous sums of money but relatively little individual accountability — no Sackler family member has faced criminal charges, and the civil liability releases in the settlements have shielded many of the individuals most responsible for the crisis from personal financial consequences.

The Emergency Medicine Dimension

Emergency departments are on the front lines of the opioid crisis — they see the overdoses, the withdrawal syndromes, the infections from injection drug use, and the psychiatric crises that accompany addiction. They are also uniquely positioned to intervene: the ED visit is often the first point of contact between a person with opioid use disorder and the healthcare system, and research consistently shows that ED-initiated treatment is effective.

The settlement funds represent a historic opportunity to build the infrastructure for ED-based addiction treatment — to fund the buprenorphine programs, the peer recovery coaches, the warm handoffs to outpatient treatment, and the follow-up systems that can turn an ED visit into the beginning of recovery. Whether that opportunity is seized depends on decisions being made by state legislators, county commissioners, and public health officials who are managing competing demands on limited resources.

The overdose epidemic killed more than 80,000 Americans in 2024 — down from a peak of 111,000 in 2022, but still far above pre-pandemic levels. The fentanyl wave that drove the peak has been partially addressed by expanded naloxone access and harm reduction programs, but the underlying addiction crisis remains. The $50 billion in settlement funds is the largest single investment in opioid abatement in American history. Whether it is enough — and whether it is spent wisely — will determine whether the next decade looks like the last one.