Opioid payout deal is signed
Settlement money to pay for programs, recovery and treatment services
Gov. Andrew M. Cuomo signed a bill late Tuesday night that will create a dedicated fund for future settlement money New York receives as a result of ongoing litigation against companies accused of fueling the opioid epidemic.
The legislation requires that all future settlement money be deposited directly into the so-called Opioid Settlement Fund, which will be overseen by an advisory board that will decide exactly how it can be spent. Approved uses will include programs and services that support addiction treatment, recovery and abatement efforts statewide.
Advocates and lawmakers say the need for such a fund became apparent this past spring when they learned the Cuomo administration had swept at least $21 million from an initial settlement with Mckinsey & Company into the state’s general fund rather than using it to fund new and sorely needed addiction services.
“Ensuring funds recovered from opioid settlements and litigation go where they’re needed — to fund prevention, education, and treatment programs
— is a massive step in our efforts to end the opioid epidemic and provide justice to its victims,” state Attorney General Letitia James said Wednesday.
James, whose office just negotiated a $230 million settlement with opioid manufacturer Johnson & Johnson, helped lawmakers craft the legislation. It passed both chambers in the state Legislature earlier this month, and in an effort to get the governor on board the attorney general included a stipulation in the Johnson & Johnson settlement that would enable New York to receive more than half of the nine-year payout by February 2022 should the bill become law.
“While no amount of money will ever compensate for the thousands who lost their lives or became addicted to opioids across our state, or provide solace to the countless families torn apart by this crisis, this law ensures funds are used to prevent any future devastation,” James said. “I thank Governor Cuomo, Senator (Gustavo) Rivera, and Assemblymember (Carrie) Woerner, as well as the county and local governments, advocates, service providers, and families for working with our office over the last six months to get this law passed.”
Cuomo’s signature came with several caveats.
In an approval memorandum attached to the bill, he announced he had reached an agreement with legislators to make “several technical changes” to the bill that would “ensure fund monies are utilized in the prevention, treatment, education and abatement of opioid addiction, and to preserve the ability of the Department of Financial Services to pursue administrative proceedings to protect
consumers.”
Changes that made it into the final bill include:
An amendment that allows DFS to bring claims against opioid-related entities other than Johnson & Johnson. The original bill would have barred government entities from bringing claims against opioid-related entities if they had already been released by a statewide
opioid settlement. An amendment that applies the law to settlements reached after June 1. The original bill would have applied to the Mckinsey settlement, which was negotiated in February. The governor’s office argued this would have reopened the already finalized 2021-22 budget. An amendment tightening approved uses of the funds. An amendment expanding the number of voting members on the advisory board from 16 to 21, nine of which would be appointed by the governor (as opposed to two under the original bill). According to a source familiar with the negotiations, the governor’s office had initially sought to make much larger changes to the bill, including a provision that would have required that the state budget director approve future opioid settlements entered into by the attorney general. The governor’s office also sought to remove language requiring settlement money enhance existing state funding on addiction services rather than replace it.
None of the proposed changes made it into the final bill.
“I agree with my colleagues in the Legislature on the importance of holding those who contributed to the opioid epidemic accountable and obtaining long overdue justice for New Yorkers,” Cuomo wrote in his approval memo.
The legislation has been cheered by advocates and providers around the state, who note that New York’s addiction problem only got worse as a result of the COVID -19 pandemic. Many counties statewide, including those in the Capital Region, reported a dramatic spike in fatal overdoses last year and some are on track to see even higher numbers this year.
“This is great news and a real shout-out to the advocates as well as Attorney General James, Senator Rivera and Assemblymember Woerner for their leadership in ensuring that the opioid settlement moneys will be directed to addiction prevention and recovery services and not to the state’s general fund,” said Glenn Liebman, CEO of the Mental Health Association in New York state.