The Wilkes County commissioners have agreed to participate in opioid lawsuit settlements that could result in the county getting as much as $13.5 million over 18 years.
In their Nov. 16 meeting, the commissioners unanimously approved documents committing the county’s participation in nationwide settlements with drug makers and distributors accused of fueling opioid addiction through irresponsible marketing and inadequate monitoring of prescription painkillers.
One was a form agreeing to join a settlement with opioid distributors McKesson Corp., Cardinal Health Inc. and AmerisourceBergen Corp. Another was a form for joining a settlement with Jansen, which is a Johnson & Johnson drug manufacturer.
The commissioners also unanimously approved a memorandum of agreement (MOA) between the State of North Carolina and local governments in the state on allocations of settlement funds, how the money is used and related matters.
In settlements reached between the four pharmaceutical companies and several states (including North Carolina) the companies agreed to pay $26 billion. McKesson, Cardinal Health and AmerisourceBergen are expected to pay a combined $21 billion, while Johnson & Johnson pays $5 billion.
About $24 billion of that goes to state and local governments to address the opioid epidemic and about $2 billion for attorney fees, according to a fact sheet from the N.C. attorney general’s office and the N.C. Association of County Commissioners (NCACC).
North Carolina’s share of the $24 billion could be as much as $850 million, according to the fact sheet. This money would come over a period of 18 years, with larger amounts in the first three years.
Each state’s share is based on a formula that considers its population, number of overdose deaths, number of residents with substance use disorder and number of opioids prescribed.
The MOA approved by the Wilkes commissioners requires that 80% of North Carolina’s share be divided among the 100 counties and 17 participating municipal governments.
It allocates 15% to state government and 5% to a fund that increases payment amounts to local governments as more join the settlement.
The fact sheet said the amount each North Carolina county gets is based on a formula giving equal weight to three factors.
The first factor is a county’s Opioid Use Disorder (“OUD”) percentage. This is determined by dividing the number of people in the county by the total number of people nationwide with OUD, as reported in the National Survey on Drug Use and Health for 2017.
The second factor is a county’s percentage of the nation’s opioid overdose deaths, as reported by the National Center for Health Statistics, Centers for Disease Control and N.C. Department of Health and Human Services. This is adjusted to address under-reporting of these deaths.
The third factor is a county’s percentage of opioid shipments nationwide in 2006-2016 that produced a negative outcome, based on U.S. Drug Enforcement Agency data. This percentage is multiplied by the higher of two ratios: ratio of the percentage of people in the county with OUD to percentage of people nationwide with OUD or ratio of the percentage of people in the county who died of opioid overdose between 2006-2016 to national percentages of these deaths then.
According to the MOA, this formula resulted in Wilkes County having an allocation proportion of 1.9971771605809100%. This is the 14th largest among North Carolina’s 100 counties and is supposed to result in Wilkes receiving about $13.5 million.
The opioid prescription rate in Wilkes was well above the national average for several years. Wilkes had the third highest drug overdose death rate in the country in 2007, at 28.5 per 100,000. It has been unusually high other years.
County Attorney Tony Triplett said the percentage going to local governments in North Carolina is higher than in some states. Settlement funds coming to North Carolina will initially go to the state and then be distributed among local governments.
Triplett said approving the documents he presented that night was the only way Wilkes could get funds from the nationwide settlement. He said this also authorized him to sign other necessary documents.
The funds are supposed to be available starting in 2022. County officials said requests from organizations for portions of the funds are already being submitted.
By signing the settlement agreements, a local government agrees to not sue McKesson, Cardinal Health, AmerisourceBergen or Johnson & Johnson in the future.
Triplett said that for the settlements to occur, enough plaintiffs (government bodies) must approve the settlement agreements to reach “critical mass.” He said he suspects it will be reached. Jan. 2 is the deadline for plaintiffs to decide whether to sign.
Triplett said most county governments in North Carolina and nationwide already approved the settlements. He said 90-some N.C. counties already approved the MOA.
Commissioner David Gambill said a settlement will also have to be reached on attorney fees. Triplett agreed and said that’s a difficult matter.
Gambill said, “I’m going to vote for it, but I don’t like it. I haven’t liked it since we got into it…. I think it’s going to be very little money” for Wilkes County government.
Eddie Settle, chairman, asked Gambill if thinks most of the money will go to attorneys and Gambill said yes.
Under the MOA, all settlements funds not spent on legal fees or used to reimburse the federal government must be used for opioid remediation. The MOA lists the types of eligible activities.
A new online dashboard, available at ncopioidsettlement.org/, offers resources to help communities decide the best ways to use their share of the settlement funds.
Local governments receiving the money must prevent it from being mingled with other money. This special fund must be audited annually and an audit report filed with the N.C. Local Government Commission.
Each county government receiving settlement funds must hold a meeting with municipalities in the county once a year to receive input on proposed uses of the money.
The settlements require certain steps by the pharmaceutical companies to help prevent abuse of opioids, including data-driven systems to detect suspicious opioid orders from pharmacies.
Johnson & Johnson agreed to no longer manufacture opioid medications. The company voluntarily halted sales of prescription opioids last year.
In a joint statement, AmerisourceBergen, Cardinal Health and McKesson said the settlement was expected to resolve “a substantial majority of opioid lawsuits filed by state and local governmental entities.” They added that while the companies “strongly dispute the allegations in these lawsuits,” the settlement will deliver “meaningful relief to communities across the United States.”