As concerns surface over local jurisdictions’ handling of a windfall of funds from opioid settlements, it's unclear where Baltimore stands.
Maryland is slated to receive more than half a billion dollars over the next two decades, a portion of which is allocated to counties and cities. However, citing ongoing litigation, city officials have refused to divulge any details about funds Baltimore has been allocated — or what they’re being spent on.
“We are not able to provide any further comment because we are actively engaged in litigation related to the opioid epidemic,” said Blair Adams, spokeswoman for the Baltimore City Health Department, when asked multiple questions about the funds.
The department appears to be referencing litigation going to trial in September. It will take place two years after Baltimore opted out of a $395 million state settlement.
While Baltimore seeks out its own settlements, KFF Health News recently reported that some local jurisdictions have used funds from opioid settlements to pay salaries and replace existing funding streams.
This prompted concern from some experts, as they hoped the funds would spur new spending to combat an unprecedented overdose crisis.
The funds could provide a unique opportunity to save lives as the U.S. overdose death toll surpasses 100,000 each year — if used correctly.
“Funds received as a result of prescription opioid-related litigation are extremely important for Maryland’s efforts to address the opioid and overdose crisis,” said Chase Cook, spokesman for the Maryland Department of Health. “Maryland's Opioid Restitution Fund provides strict guidelines that ensure that all funds received at the state level will be used directly to address the harms inflicted on Maryland communities.”
The state’s Opioid Restitution Fund was created in 2019 in anticipation of settlements with pharmaceutical companies for their role in the opioid crisis.
It wasn’t until 2022, when state laws were updated with allocation guidance and the Opioid Restitution Fund Advisory Council was formed, that funds began to be dispersed based on specific criteria.
Maryland is one of only 13 states, including Washington, D.C., that restricts using the funds to replace existing funding mechanisms.
The state’s guidelines also explicitly mandate that harm reduction initiatives be prioritized in allocations.
So far, Maryland has received $84.1 million from settlements with opioid-related companies, according to an analysis by KFF Health News, and the state expects an estimated $311.2 million in future payouts.
The data does not include Maryland’s $12.1 million share of a 2021 settlement with McKinsey, which took place before the establishment of the advisory council, nor does it include funds from settlements reached this year.
With the state’s announcement of a $238 million settlement with Walmart, Walgreens, Teva and Allergan in February, Maryland’s total payout easily exceeds half a billion dollars.
That money comes as thousands of Maryland residents die each year of overdoses. Studies have shown that, although fentanyl is driving the majority of deaths, many individuals’ addictions began with prescription painkillers.
Although the surge has eased in the past couple years, Maryland still saw 2,503 overdose deaths in 2023, according to the state Office of Overdose Response.
Baltimore, meanwhile, has been hit harder than any other city in the U.S.
The city saw 1,039 overdose deaths last year, a 5.1% increase over the year prior. With 177.4 overdose deaths per 100,000 people, Baltimore has the highest overdose death rate of any city in the nation.
In the beleaguered city of Baltimore, it's unclear how much it stands to benefit — if at all.
In 2021, the city refused to join a state settlement with Johnson & Johnson, an opioid manufacturing giant, as well as AmerisourceBergen, Cardinal Health and McKesson.
Citing an insufficient share of the funds if the city had joined, Baltimore missed out on millions of dollars from the total $395 million settlement, 25% of which will be allocated to counties over 18 years.
Baltimore is, however, slated to receive $7.2 million as a part of a state settlement with Walmart over its role in the opioid crisis, the city announced earlier this year.
Baltimore officials have said that money will come on top of the nearly $540,000 it won from a bankruptcy settlement with Mallinckrodt last year, which brought the total amount received from the pharmaceutical company to more than $1 million.
It’s unclear how much the city has received in total or how much settlement funds have been allocated. And there have been no mentions of opioid-related settlements in the city budget documents in recent years.
There appears to be no requirement for counties or cities to publicly disclose how much money they have received from settlements — or how they plan to use it.
At the state level, though, officials have laid out how the funds need to be used: None of the money can be allocated for purposes other than for addressing the opioid epidemic.
For example, 60% of all funds received are used for the state’s Targeted Abatement Subfund, which provides grants to municipalities for opioid remediation. Another 15% goes to state programs.
“While Maryland receives a significant amount of support from our federal partners to fund substance use treatment and recovery services (such as State Opioid Response Grants and funds from the Centers for Medicare & Medicaid Services), ORF funds will make a substantial difference in the lives of Marylander’s with substance use disorders by addressing gaps that other funds may not be able to fill,” Cook said in a statement.
The catch, however, comes with the funding allocated to local jurisdictions.
The state allocates 25% of all funds to qualifying jurisdictions, and 15% of that can be used for “supplementary” spending, which permits counties more latitude over how they use the funds.
That includes permitting municipalities to use the funds to replace existing funding streams and fill holes in their budgets.
It’s unclear how common that is among Maryland counties but, at the state level, public records show it has spent a relatively small portion of the nearly $84.1 million it had reportedly received as of 2023, according to public reports.
The Maryland Department of Health offers a somewhat detailed breakdown of how the money was spent. Unlike municipalities, it is required to report all spending.
In its 2023 report, for example, the state allocated just more than $10 million for three different initiatives from the $12 million McKinsey & Company settlement in 2021.
Those funds were used for the Examination and Treatment Act Grant program, the Access to Recovery Emergency Gap Funds Grant program and “data-informed overdose risk mitigation.”
Only $1.4 million of those allocations had been spent as of the end of the fiscal year.
In addition, with the $395 million Johnson & Johnson settlement, about $16.9 million had been allocated. That money had been distributed to counties that qualified for the Targeted Abatement Fund.
The counties that received funds were Anne Arundel; Baltimore; Frederick; Harford; Howard; Montgomery; and Prince George’s counties.
No available data shows how much of that money has been spent by counties. Still, the state requires allocations from the abatement fund to be used for naloxone programs, education initiatives, crisis centers and other remediation measures.
A lack of details about settlement funds and how they’re being used is not unique to Maryland, said Dr. Joshua Sharfstein, vice dean for public health practice and community engagement at the Johns Hopkins Bloomberg School of Public Health.
“There are clearly interests in many places in using evidence to guide decisions and investing in new initiatives,” Sharfstein said. “But in other areas, people are using the money to pay themselves back, and you’re not seeing any actual progress. Really this process is just beginning in many places.”
In anticipation of the state looking for strategies to guide funding allocation, Sharfstein helped the school create a website that lists guiding principles for how funds should be allocated.
Those guidelines include:
- Spend the money to help save lives
- Use evidence to guide spending
- Invest in youth prevention
- Focus on racial equity
- Develop a fair and transparent process for deciding where to spend the funding
As Maryland and other states look to maximize the benefits of settlement funds, lessons can be learned by looking back to more than 25 years ago when, in 1998, 52 state attorneys general settled with the four largest tobacco manufacturers in the U.S., Sharfstein said.
The civil suit was worth more than $200 billion, but not all the money went to the right places.
“Very little of the tobacco settlements made it into tobacco control, and so one of the reasons was to emphasize the importance of investing these funds to help save lives,” Sharfstein said.'
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