Plans for opioid settlement money announced by state and local leaders

Colorado could receive $400M or more from pharmaceutical companies, consultants

By: - August 27, 2021 5:00 am
MOU signing

Attorney General Phil Weiser signs a memorandum of understanding that dictates a framework for distributing opioid settlement funds, during a news conference at the Ralph L. Carr Colorado Judicial Center in Denver on Aug. 26, 2021. Weiser is flanked by local officials including Denver Mayor Michael Hancock, second from left. (Faith Miller/Colorado Newsline)

Colorado could soon receive $400 million from settlements with drug companies, and the state has a plan — or at least a proposed framework — for using those funds to fight the opioid epidemic, Attorney General Phil Weiser announced Thursday.

Under the framework, 60% of Colorado’s settlement proceeds will be distributed to 19 regions of the state. Regional Governance Councils, comprised of local leaders from each region, will make decisions on how to spend the money and provide annual financial reports to the Colorado Department of Law.

“Every regional body, every local government who has funds will make independent decisions,” Weiser, a Democrat, said at a Thursday news conference in Denver. “Our goal will be to develop transparency so we know how all the money is being spent and then, secondly, to facilitate learning, because people will try things in different areas and we’ll learn from them.”

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The attorney general’s office expects Colorado will receive at least $385 million from four multi-state court battles. The largest portion, $300 million, is expected to come from a settlement with pharmaceutical company Johnson & Johnson and three major drug distributors. Colorado has already received $8 million of an expected total of $10 million from a settlement with McKinsey and Company, according to Weiser’s spokesperson, Lawrence Pacheco. McKinsey is a consulting firm that helped pharmaceutical company Purdue Pharma sell opioid pills.

The state expects to receive at least $50 million from a separate settlement with Purdue Pharma and the Sackler family, according to the attorney general’s office, and $25 million from opioid manufacturer Mallinckrodt.

Colorado would receive $50 million in proposed settlement with Purdue Pharma, Sackler family

When it comes to battling the opioid addiction crisis, the stakes have never been higher in Colorado. In 2020, the state saw a record number of overdose deaths, with 1,477 people dying as a direct result of substance use, according to state data.

A total of 956 deaths, representing 65% of the total, were caused by opioids — a category that includes heroin and prescription painkillers such as oxycodone and morphine, as well as fentanyl, a substance increasingly present in street drugs that can be deadly in small amounts.

In 2020, the state also saw its largest year-over-year increase in overdose deaths since at least 2000. The total number of deaths increased 38% from 2019 to 2020. Opioid overdose deaths increased 56%.

Fentanyl-associated deaths more than doubled — from 222 deaths in 2019 to 540 deaths in 2020, according to data from the Colorado Department of Public Health and Environment’s Vital Statistics Program.

Opioid framework map
This map shows the regions of the state that would receive opioid settlement money under a framework announced by the attorney general’s office on Aug. 26, 2021. (Courtesy of Colorado Office of the Attorney General)

Plan allows regional variation

The city and county of Denver — the state’s most populated — is the only county classified under Region 11 of the opioid settlement framework. Denver lost 687 people to drug overdoses from 2018 through 2020.

“Families are devastated right now,” Mayor Michael Hancock said at the news conference. “Otherwise healthy, able-bodied individuals are walking our streets like zombies today because of this opiate crisis.”

As an elected official for Logan County in northeast Colorado, Commissioner Byron Pelton belongs to Region 4 under the state’s opioid settlement framework. Other counties in the region include Sedgwick, Phillips, Morgan, Washington, Yuma, Elbert, Lincoln, Kit Carson and Cheyenne.

Families are devastated right now ... Otherwise healthy, able-bodied individuals are walking our streets like zombies today because of this opiate crisis.

– Denver Mayor Michael Hancock

“A heartfelt ‘thank you’ to all involved in this opioid settlement,” Pelton said. “Thank you for recognizing that substance abuse is a statewide issue and working to make sure that resources made their way to local governments, where each region now will be able to use that money where it will make the biggest impact.”

After regions, smaller local governments will receive the next biggest chunk — 20% — of the state’s settlement dollars under the framework. These cities, towns and counties “may opt to allocate their funds to the county or region with which they are associated under the joint framework,” according to a news release from the attorney general’s office.

Byron Pelton
Logan County Commissioner Byron Pelton, left, speaks at a news conference at the Ralph L. Carr Colorado Judicial Center in Denver on Aug. 26, 2021. (Faith Miller/Colorado Newsline)

Local governments can receive settlement funds as long as they agree to the framework announced Thursday, whether or not they filed their own lawsuits against opioid manufacturers, drug distributors and others.

“I look forward to hopefully seeing the funds for this move the needle on the much-needed resources, including mental health,” said Jessica Sandgren, Thornton’s mayor pro tem. Sandgren named treatment centers and education as potential priorities for funding.

The attorney general’s office will put 10% of the settlement proceeds into a fund to “address issues of statewide concern related to the crisis.” That might mean expanding the state’s addiction workforce or boosting substance use prevention efforts.

Another 10% of Colorado’s opioid settlement proceeds will go toward an infrastructure fund to build substance use treatment and recovery services in the state’s hardest-hit areas. From 2018 through 2020, overdose death rates were highest in Rio Grande, Las Animas and Alamosa counties in rural southern Colorado, according to CDPHE’s online dashboard.

Residents of less-populated Colorado communities often fear being judged by neighbors for seeking treatment, according to behavioral health experts. Rural areas of the state also generally lack the resources that Front Range counties enjoy when it comes to substance use prevention and treatment.

For example, there is no detox center in any of the 10 northeast Colorado counties comprising Region 4 of the settlement framework, Pelton said. Detox centers treat people in the days or weeks after they stop using substances or alcohol. Withdrawal from alcohol and benzodiazepines such as Xanax or Valium can be dangerous, even fatal, for people with severe substance use disorders, and detox centers provide the necessary medical supervision during this process.

“If you’re in Yuma County, you’ve got to drive 120 miles to get to the (nearest) detox center,” Pelton said.

Possible uses for money

On Thursday, Weiser signed a memorandum of understanding signifying his office’s support of the distribution framework. Individual city councils and boards of county commissioners will also have to sign the MOU in order to receive settlement funds.

José Esquibel, director of the Colorado Consortium for Prescription Drug Abuse Prevention, told Newsline that Colorado’s settlement distribution framework prioritizes funding for local governments, more so than frameworks proposed by some other states.

“That’s where the work has to be done, at the local level,” Esquibel said, adding the framework will ensure that funding won’t be diverted from substance use prevention, treatment and recovery efforts to pay for other budget priorities.

“That was not the way things went with the tobacco settlement funds,” he noted, referring to proceeds from a 1998 multistate settlement agreement with large tobacco companies.

State and local leaders have spent the past two years thinking about how to collaborate on strategies to fight the opioid crisis with the forthcoming settlement dollars. In 2019, the Consortium worked with Colorado Health Institute and groups representing Colorado counties and cities to devise a blueprint for the best way to spend opioid settlement proceeds.

The attorney general’s office has also worked on a “broad menu of options” for local governments and regional councils on allowable uses of the funding, Esquibel said. According to a May draft of the state’s Opioid Response Plan by the Colorado Department of Law, a few of those possible uses include:

• Improved training for health care providers and pharmacies about responsible opioid prescribing
• “Community prevention strategies and programs that are culturally responsive” and address risk factors for opioid use
• Medication-assisted treatment programs, including telehealth programs, which involve using prescribed medications to normalize brain chemistry and body function, reduce cravings and block the euphoric effects of opioids
• Residential opioid use treatment programs

With the spending capabilities now imminent, “I’m really thrilled about the direction things are going,” Esquibel said.

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Faith Miller
Faith Miller

Reporter Faith Miller covers the Colorado Legislature, immigration and other stories for Colorado Newsline.

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