State and local governments in Arkansas are suing opioid manufacturers for millions or billions. If they’re successful, what will they do with all that money?
On March 21, the Association of Arkansas Counties and the Arkansas Municipal League announced that 72 counties – it’s now all 75 – and 210 cities together were suing 65 defendants in the opioid industry in Crittenden County Circuit Court. Both organizations were already part of a nationwide federal lawsuit. Then on March 29 Attorney General Leslie Rutledge announced her office is suing three of the largest opioid manufacturers.
Opioids are a class of drugs that traditionally have been used to reduce acute, short-term pain.
Drugs include morphine, hydrocodone, fentanyl and others. Opioids also are sold illegally as heroin, opium, and illicit forms of fentanyl.
The suits accuse the manufacturers and others of conspiring to misinform doctors about the risks of their drugs. As a result, highly addictive medication meant for short-term, searing pain instead was prescribed for long-term, chronic pain, such as back injuries.
The number of prescribed opioids exploded – and so did the number of addicts and the number of overdose deaths. Arkansas has the nation’s second highest opioid prescription rate – 114.6 for every 100 people. In 2016, 236 million opioid pills were sold here. The Arkansas Department of Health says 401 Arkansans died of a drug overdose that year. It’s hard to tell how many were caused by opioids. Multiple drugs often are involved. But opioids clearly were a major factor in many cases. In 1999, there were 113 drug overdose deaths.
Rutledge says the manufacturers violated the Arkansas Medicaid Fraud False Claims Act. The rationale is their marketing scheme caused the state to pay millions in Medicaid expenses. She says they also violated the Arkansas Deceptive Trade Practices Act.
The counties and cities say local governments bear much of the epidemic’s costs for first responders, law enforcement, jails, etc.
An obvious precedent may offer a glimpse of the future. In 1998, states sued the tobacco companies, which were also accused of scheming to market a product with known health risks. The tobacco companies saw the writing on the wall and settled, paying $246 billion for 25 years and then additional money later.
What happened to that windfall? Nationwide, states have used it for many purposes, often having nothing to do with tobacco prevention or tobacco-related health care costs. According to the Campaign for Tobacco-Free Kids, states will receive $27.5 billion in fiscal year 2018 from the settlement and tobacco taxes. Less than 3 percent, or about $722 million, will go to prevent young people from smoking and to help smokers kick the habit. At the same time, the tobacco companies spend 12 times as much, almost $9 billion, marketing their products.
And Arkansas? The state has received about $946 million since the settlement. It receives about $50 million annually now. In 2000, voters easily passed the Tobacco Settlement Proceeds Act. It created the Arkansas Tobacco Settlement Commission, which direct the funds to seven program areas, all related to health. Matt Gilmore, the executive director, said 27 percent of the annual tobacco payment goes to the Tobacco Prevention and Cessation Program. Portions of the other programs also address tobacco – minority health, aging, UAMS research, etc., though it’s hard to say how much.
Last year, the Legislature and the governor moved more than $100 million of the settlement money out of health care and into the state’s long-term reserves in case there’s a budget crisis.
So what will happen if the state, counties and cities get millions or billions from the opioid manufacturers? The private law firms hired for the lawsuits will get their contingency fees – 21 percent in the county-city lawsuit in Crittenden County, according to a lawyer with one of the firms. There’s a formula based on the size of the award in the attorney general’s suit.
The rest of the money? Like the tobacco settlement, it could be another windfall for state and local governments. Gov. Asa Hutchinson said in a press conference that the state has already spent money on the opioid epidemic, so this in a sense would be a reimbursement.
Another option is to use payments created as a result of the epidemic to stem the epidemic: for education, treatment, health care costs, law enforcement, etc.
How would you like to see it used?
Steve Brawner is a syndicated columnist in Arkansas. Email him at firstname.lastname@example.org. Follow him on Twitter at @stevebrawner.