Purdue Pharma, the maker of OxyContin, settled its lawsuit with the state of Oklahoma on Tuesday for $270 million. The state had sued the company for marketing its painkillers "deceptively," so as to "downplay the associated risk of addiction, which resulted in an opioid crisis." Purdue chose to settle before a public trial scheduled for May, and admitted no fault. Among the terms of the settlement are that $102.5 million go to creating a national center for research and education on addiction, and that the company donate $20 million worth of addiction-treatment medicine to Oklahoma State University.
This is the biggest state opioid settlement yet, and lawyers and addiction patients' advocates are waiting eagerly to see what precedent it will set for the 1,000-plus other lawsuits Purdue faces. One of the most important precedents it could set is in how the resulting money is used. Many want to avoid what happened with the billions of dollars that states received after an enormous lawsuit and settlement with the tobacco industry in the late 1990s. Although some of those funds were earmarked for anti-smoking ads and research into helping people quit smoking, most came with no restrictions. In 2007, a Government Accountability Office analysis found that states had used about half of their settlement money for purposes totally unrelated to nicotine addiction and health, including law enforcement, fixing state-owned infrastructure, and making up for budget shortfalls.
"There's been a lot of harbingers of doom: Oh, what's happened with tobacco has to happen in this instance," says Rebecca Haffajee, a health law researcher at the University of Michigan who has tracked high-profile opioid settlement cases. "I guess I'm not as cynical as that, and I like to believe that we can learn lessons."
The major lesson is to be specific about what settlement money should go to, which the Oklahoma agreement is. In this case, Haffajee would have liked to see more funds allocated not to research—which she worries might take too long to help Oklahomans who are addicted to opioids now—but to treatment and social services for people with addictions. She also mentioned the $60 million for legal expenses and lawyers' fees seemed like "a lot." Still, she says: "It's good the money has been specifically earmarked."
Some smaller, past opioid settlements have also tried to funnel the money back into healing the harms opioid addiction has wreaked. In 2015, Kentucky put its $24 million settlement with Purdue into a restricted fund for addiction prevention and treatment, while, in 2007, Oregon set aside $949,000 of its share of a $19.5 million multi-state settlement for consumer protection and education.
Other states haven't been so conscientious. West Virginia received $10 million from Purdue Pharma in 2004, much of which was supposed to go into programs for drug misuse and law enforcement. A couple million ended up going into remodeling police academy buildings and construction of a new gym for the school, according to the National Pain Report. The state received an additional $44 million from a federal lawsuit against Purdue, which then-governor Joe Manchin reportedly wanted to tap for a $3 million "governor's helicopter." (The helicopter purchase never happened.) Manchin is now a senator, and West Virginia has the highest opioid overdose rate in the nation.
It remains to be seen what kinds of future settlements states will come to not only with Purdue, but other prescription opioid manufacturers and distributors that are now being sued. One final fear is that Purdue will declare bankruptcy, as Reuters reports it is considering, which may leave some plaintiffs unable to collect from the company at all.
In our brief conversation, Haffajee at first expressed hope that states would resist the temptation to rush to the negotiation table. "What we don't want is for states to be settling for smaller amounts than they should be settling for," she said. But later she admitted, "Arguably, potentially getting something is better than nothing. It's tricky."
After all, we don't know what's next or how Oklahoma's settlement will affect others, only that it will.