As a $26 billion settlement over the toll of opioids looms, some public health experts are citing the 1998 agreement with tobacco companies as a cautionary tale of runaway government spending and missed opportunities for saving more lives.
Mere fractions of the $200 billion-plus tobacco settlement have gone toward preventing smoking and helping people quit in many states. Instead, much of the money has helped to balance state budgets, lay fiber-optic cable and repair roads.
And while the settlement was a success in many ways — smoking rates have dropped significantly — cigarettes are still blamed for more than 480,000 American deaths a year.
"We saw a lot of those dollars being spent in ways that didn't help the population that had been harmed by tobacco," said Bradley D. Stein, director of the RAND Corporation's Opioid Policy Center. "And I think it's critical that the opioid settlement dollars are spent wisely."
Lawyers for states and local governments and the companies laid out key details of the settlement on Wednesday and said there are provision to make sure the money is used as intended.
The deal calls for the drugmaker Johnson & Johnson to pay up to $5 billion, in addition to billions more from the major national drug distribution companies. AmerisourceBergen and Cardinal Health are each to contribute $6.4 billion. McKesson is to pay $7.9 billion.
Nearly $2 billion of the funds would be reserved for private lawyers who were hired by governments to work on their suits against the industry. State attorney general offices could also keep some of the money.
States — except West Virginia, which has already settled with the companies but could receive more through the deal — will have 30 days to approve the agreements. After that, local governments will have four months to sign on. Each company will decide whether enough jurisdictions agree to the deal to move ahead with it. The more governments sign on, the more the companies will pay.
"While the companies strongly dispute the allegations made in these lawsuits, they believe the proposed settlement agreement and settlement process it establishes are important steps toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities across the United States," the distribution companies said in a statement.
Connecticut Attorney General William Tong said it would be the second-biggest cash settlement of its kind in U.S. history behind the tobacco deal in the 1990s.
North Carolina Attorney General Josh Stein said the opioid agreement requires state and local governments to use the vast majority of the money on abatement — and that will be subject to a court order. The deal calls for at least 70% of the money to go to a list of abatement activities such as providing naloxone, a drug that reverses overdoses; helping house homeless people with addictions; or educating the public on the dangers of the drugs, among many other possibilities.
"We all are experiencing the consequences in communities across North Carolina, across the country," Stein said on a video news conference Wednesday.
Not every state is ready to agree. Washington state Attorney General Bob Ferguson said he would reject the deal as "insufficient" and move ahead with a trial on claims against the distributors scheduled to start in September.