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).
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).
- Substance use provider workforce training.
- Education and awareness campaigns related to youth substance use, the risks of fentanyl, and reducing stigma.
- An evidence-based treatment locator.
- Improvements to overdose surveillance data.
- Integrating recovery into employment opportunities.
- Naloxone distribution.