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California’s Opioid Settlements and Bankruptcies

California’s Opioid Settlements

In late 2022, cities and counties in California received the first round of payments from settlements with opioid manufacturer Janssen Pharmaceuticals, which is a parent company of Johnson & Johnson, and the “big three” distributors: McKesson, AmerisourceBergen, and Cardinal Health (the Distributors). Cities and counties also had the opportunity to opt into additional opioid settlements with CVS, Walgreens, Walmart, Allergan, and Teva Pharmaceuticals and will receive additional funds from those agreements when they are finalized.

Funds received from all of California’s opioid settlements will be distributed as follows:

  • 15% allocated to the State of California to use for future opioid remediation activities (California State Fund).
  • 70% allocated to cities and counties to use for future opioid remediation activities (Abatement Account Fund).
  • 15% allocated to cities and counties who filed original lawsuits against opioid defendants, to use for future opioid remediation activities and to reimburse past opioid-related expenses (California Subdivision Fund).

A pie graph that shows the distribution of California’s Opioid Settlements.Image description

California’s Opioid Bankruptcies

In early 2023, cities and counties in California received the first round of payments from Mallinckrodt Pharmaceuticals, a generic opioid manufacturer that filed for bankruptcy to address their opioid litigation with multiple states. Additional bankruptcies from other opioid manufacturers, including with Endo Pharmaceuticals and Purdue Pharmaceuticals L.P., are still pending.

California’s allocation from the Mallinckrodt bankruptcy will be distributed as follows:

  • 40% of funds will be awarded to the State of California to use for future remediation activities (National Opioid Abatement Trust II Fund – State Share).
  • 60% of funds will be awarded to Local Governments to use for future opioid remediation activities (National Opioid Abatement Trust II Fund – Local Government Share).

A pie graph that shows the distribution of California’s Bankruptcy Settlements.Image description

Pursuant to Government Code, Title 2, Division 3, Part 2, Chapter 6, Article 2, Section 12534, the Opioid Settlements Fund (OSF) was created in the State Treasury. Funds from opioid settlement agreements and bankruptcy agreements allocated to the state for state opioid remediation are deposited into the OSF. Use of funds from the OSF are determined and appropriated by the California legislature and subject to normal state budgetary processes. In State Fiscal Years 2022-2023 to 2023-2024, settlement funded projects in California included:

For more information about California’s opioid settlement funded projects, visit the DHCS OSF webpage, or view the Projects page.