50% Local Share
Where do these monies live?
Alabama’s local share is distributed to its local governments and governmental public health units.[1]
For Alabama’s settlement with McKesson and Janssen, 40% is allocated to litigating local governments and 10% is allocated to litigating governmental public health entities (i.e., public hospitals, county health departments, boards of health).[2]
For Alabama’s settlement with Endo, 40% is allocated to litigating political subdivisions.[3]
For Alabama’s opioid-related bankruptcy settlements, 50% is allocated to political subdivisions.[4]
According to a presentation from the Office of the Alabama Attorney General, 50% of the state’s settlements with Teva, Allergan, CVS, and Walgreens will “go[] to local entities.”[5]
Local governments also received funds from a settlement with Walmart, negotiated by the Alabama Attorney General on behalf of Alabama cities and counties.[6]
What can this share be spent on?
With limited exceptions,[7] this share must be spent on uses consistent with the national settlement agreement’s (non-exhaustive) Exhibit E,[8] which includes prevention, harm reduction, treatment, recovery, and other strategies.
Who ultimately decides how to spend this share (and how)?
Local governments and governmental public health entities decide autonomously. Decisionmakers for the local governments and governmental public health entities will decide autonomously how to spend their share of opioid settlement funds on approved uses (e.g., Exhibit E uses).[9]
Are supplantation uses prohibited for this share?
No, supplantation is discouraged but not prohibited. Like most states, Alabama does not explicitly prohibit supplantation uses of its opioid settlement funds. This means that the 50% local share may be spent in ways that replace (or “supplant”) – rather than supplement – existing resources.
However, in its annual reports, the Alabama Opioid Overdose and Addiction Council has described a “shared commitment to using abatement funds recovered from statewide opioid settlements to supplement and strengthen resources available to Alabama communities and families for substance use disorder prevention, harm reduction, treatment, and recovery.”[10]
Can I see how this share has been spent?
Up to each locality (neither public nor intrastate reporting required). Opioid settlement expenditures are not officially published in a centralized location for this share.
Visit OpioidSettlementTracker.com’s Expenditure Report Tracker for an updated collection of states’ and localities’ available expenditure reports.
What else should I know?
Unlike most states, Alabama chose not to participate in some of the national settlement agreements.[11] Pursuing individual settlement agreements with the companies involved in the opioid litigation means that Alabama’s opioid settlement scheme is not automatically subject to all the features (and protections) of the “national” settlement agreements’ opioid remediation-related terms. For example, Alabama’s McKesson and Janssen settlement agreements do not specify any amount that must be used exclusively towards forward-looking abatement strategies.[12]
Citations
See Alabama Attorney General Marshall Finalizes $220 Million Settlement with Two Opioid Distributors. Alabama Attorney General Office press release. March 4, 2024 (“As with previous opioid settlements, the State will share settlement funds with local governments and public hospitals”). Compare McKesson-Alabama Litigating Local Governments & Litigating Local Governmental Public Health Entities Special Master Report (50% going to the State, 40% going to the Political Subdivisions [Litigating Local Governments], and 10% going to the Litigating Governmental Public Health Entities) with Opioid Bankruptcy Case Allocation Agreement (“50% going to the Political Subdivisions [“any Alabama municipality, county, municipal agency, county agency”] and 50% going to the State”). ↑
McKesson Special Master Report 1 (“Pursuant to Sec. B. l of the McKesson and Janssen Opioid Settlement Allocation Agreement, "The State, Political Subdivisions [Litigating Local Governments] and Litigating Governmental Public Health Entities … shall divide all Settlement Funds with 50% going to the State, 40% going to the Political Subdivisions [Litigating Local Governments], and 10% going to the Litigating Governmental Public Health Entities”). ↑
Endo’s allocation departs from Alabama’s general 50% state, 50% local rule to allocate 60% to the state and 40% to political subdivisions. Alabama Endo Settlement Sign-on Sec. B.1. ↑
Opioid Bankruptcy Case Allocation Agreement (“50% going to the Political Subdivisions [“any Alabama municipality, county, municipal agency, county agency”] and 50% going to the State”). ↑
See Opioid Settlement, Slide 3. Steve Marshal, State of Alabama Attorney General. 2023 Fall Municipal Law Conference. November 2-4, 2023. Accessed August 6, 2024. ↑
Attorney General Steve Marshall Reaches $44 Million Agreement with Walmart to Fund Opioid Abatement Statewide. Alabama Attorney General Office press release. November 7, 2022. Accessed August 6, 2024. ↑
See, e.g., McKesson Special Master Report (describing special master fees and attorneys’ fees). ↑
See 2022 Annual Report. Alabama Opioid Overdose and Addiction Council. December 31, 2022 (describing Exhibit E’s “core strategies” list under “Approved State Use of Abatement Funds” and stating that “[t]he agreement reached by the State of Alabama with various parties restricts the use of any settlement funds to abatement strategies only”). Note that the state’s Janssen (Johnson & Johnson) settlement includes its own approved use exhibit with a non-exhaustive list of opioid remediation strategies that is similar but not identical to the national settlement agreements’ Exhibit E. The Janssen approved uses exhibit’s list of opioid remediation strategies are grouped into three categories: Opioid Community Innovation & Recovery (e.g., treatment, prevention, and harm reduction), Opioid Statewide Innovation & Recovery (e.g., resources for dashboards and stigma reduction training), and Opioid Recovery Sustainability (e.g., funding for child and family supports and syringe service programs). Johnson & Johnson Sign-On Exhibit A. ↑
See, e.g., Clarke County (reporting on county commission’s vote to appropriate its opioid settlement funds), Fairhope (reporting on city council’s vote to appropriate its opioid settlement funds), and Jefferson County (describing opioid grant application process). ↑
Alabama Opioid Overdose and Addiction Council, 2023 Annual Report and 2022 Annual Report. ↑
See OpioidSettlementTracker.com’s Global Settlement Tracker. ↑
See Section V.D.1 of the Distributor and Janssen agreements (requiring states to spend 70% of their opioid settlements on “future opioid remediation”). ↑
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