Nebraska’s Opioid Prevention and Treatment Act
In 2020, the Nebraska Legislature passed LB1124, the Opioid Prevention and Treatment Act.[1] The purpose of the Act “is to provide for the use of dedicated revenue for opioid-disorder-related treatment and prevention.”[2]The source of this dedicated revenue is settlements entered into by the Nebraska Attorney General related to the opioid epidemic.[3] The Act establishes the Nebraska Opioid Recovery Fund into which all settlement monies received on behalf of the state must be deposited.[4]The Nebraska Opioid Recovery Fund is administered by the Nebraska Department of Health and Human Services – Division of Behavioral Health [“DHHS-DBH”]. DHHS-DBH is required to provide an annual report to the Legislature, Governor, and Attorney General regarding the use of monetary distributions from the Opioid Recovery Fund and “the outcomes achieved from such use.”[5]The Act requires that spending from the Opioid Recovery Fund be “in accordance with the terms of” any settlements brought by the Attorney General.[6]
Nebraska Opioid-Related Settlement Agreements
The Attorney General has entered into several nationwide settlements with various defendant corporations related to the opioid epidemic. These settlements contain various timelines for the state of Nebraska and, where applicable, any eligible participating cities and counties to receipt of settlement payments. These payment schedules presently range from five years to 18 years. Payments received on behalf of the state will be deposited in the Nebraska Opioid Recovery Fund in accordance with the Opioid Prevention and Treatment Act. Payments under certain settlement agreements that may be made directly to an eligible participating city or county will be made directly to such city or county by the national opioid settlement administrator for such settlement agreements. The following are settlement agreements entered into by the Attorney General as of March 1, 2022.
-McKinsey
In February 2021, Nebraska, along with 46 other states, the District of Columbia and five U.S. territories, entered into a settlement with McKinsey and Company for $573,919,331. Nebraska’s total share of this settlement is $2,590,561, with payments to be made over five years. This settlement contains no provisions for direct payments to any political subdivision. Nebraska’s first payment of $2,147,213 was received in March of 2021 and deposited into the Opioid Recovery Fund. Nebraska will receive four additional annual payments of $110,836 each.
-The Distributors: AmerisourceBergen, Cardinal Health, and McKesson
In July 2021, a tentative national settlement with opioid distributors: AmerisourceBergen, Cardinal Health, and McKesson was announced with a total potential value of $18,544,013,691 to be paid over 18 annual installments. Based on Nebraska’s total allocable share[1], the maximum possible sum is $81,680,641 over a period of 18 years. The maximum possible sum is based on the attainment of several “bonus” metrics regarding the number of Nebraska cities and counties consenting to the agreement. As of January 26, 2021, all of Nebraska’s eligible cities and counties have consented to the distributors' settlement, and all bonus metrics have been accomplished. Therefore Nebraska and its eligible cities and counties will receive their respective maximum shares.
Under the “distributors” settlement agreement, 70% of any payments are to be deposited into an opioid epidemic abatement fund (in Nebraska, the Opioid Recovery Fund). The remaining 30% of any settlement payments are to be split between the state (15%) and directly to eligible participating cities and counties (15%). Under the Nebraska Opioid Prevention and Treatment Act, the state’s 15% share is also to be deposited into the Opioid Recovery Fund. The 15% share to eligible cities and counties is to be directly deposited by the national settlement administrator with each eligible city or county. Both the monies deposited into the Opioid Recovery Fund and directly with eligible cities and counties must be used in a manner approved under the settlement agreement for abatement of opioid use disorder and any co-occurring mental health or substance use disorders.[2] Monies deposited into the Opioid Recovery Fund must additionally adhere to any requirements of the Nebraska Opioid Prevention and Treatment Act. The first two annual payments to Nebraska and its eligible cities and counties is expected from the national settlement administrator on or before July 15, 2022.
-Janssen (Johnson & Johnson)
Likewise, in July 2021, a tentative national settlement with Janssen, the pharmaceutical companies of Johnson & Johnson, was announced with a total potential value of $4,534,615,385 to be paid over 9 annual installments. Based on Nebraska’s total allocable share[1], the maximum possible sum is $19,961,174 over a period of 9 years. The maximum possible sum is based on the attainment of several “bonus” metrics regarding the number of Nebraska cities and counties consenting to the agreement. As of January 26, 2021, all of Nebraska’s eligible cities and counties have consented to the Janssen settlement, and all bonus metrics have been accomplished. Therefore Nebraska and its eligible cities and counties will receive their respective maximum shares. The percentage allocation of funding between the Opioid Recovery Fund and direct payments to eligible cities and counties is the same as under the “distributors” settlement.
Any potential future opioid settlements will be allocated based on the specific terms of any such settlement agreement. It is worth noting that Nebraska had the lowest percentage of litigating cities and counties in the nation and that the Nebraska Attorney General did not retain any outside legal counsel for any opioid-related matter. These factors facilitated the achievement of the “bonus” metrics in both the Janssen and Distributors settlements and allow any portion of the state’s allotment that might have otherwise gone toward attorney’s fees to instead be used for the substance use and mental health abatement purposes identified in the settlement agreements and under the Opioid Prevention and Treatment Act. Ongoing communication between the Nebraska Attorney General’s Office, Nebraska Department of Health and Human Services, the League of Nebraska Municipalities and the Nebraska Association of County Officials, and other stakeholders throughout Nebraska involved in the Nebraska Coalition to Prevent Opioid Misuse has allowed Nebraska to be able to achieve these settlement metrics and will continue to provide the basis for decisions about granting or distributing monies from the Opioid Recovery Fund through the Nebraska Opioid Settlement Remediation Advisory Committee.
The Role of the Nebraska Opioid Remediation Advisory Committee
The Opioid Prevention and Treatment Act conditions spending from the Opioid Recovery Fund upon the terms of the respective settlement agreements entered into by the Nebraska Attorney General. Both the Janssen and Distributors settlement agreement require each state to establish an opioid remediation advisory committee.[1]Such a committee is constituted to provide recommendations for the use of monies from the Opioid Recovery Fund and must be comprised equally of “state” members and “local” members. The committee’s recommendations must comport to the terms of the various settlement agreements and the Opioid Prevention and Treatment Act. The committee has no authority over any direct payments made to eligible cities and counties from the national administrator. Amongst the committee’s responsibilities according to the settlement agreements and the Act is to ensure Opioid Recovery Fund monies are applied regionally across Nebraska and to establish criteria for identifying needs and prioritizing effective responses. The Division of Behavioral Health has been identified as the state’s point of contact with the national opioid settlement administrator and will have responsibility for accounting, administration, and distribution of monies from the Opioid Recovery Fund. The Division of Behavioral Health has subject matter expertise and existing structures in place for the administration of federal funds from SAMSHA for similar substance use and mental health purposes. The committee will utilize Nebraska’s six existing behavioral health regions for purposes of regional allocation of Opioid Recovery Fund monies per the settlement agreements. The committee will seek public input and review proposals for expenditure of Opioid Recovery Fund monies. The committee will hold public meetings in accordance with the Nebraska Open Meetings Act.
The Nebraska Opioid Remediation Advisory Committee will be initially comprised of two “local” members from each of the six behavioral health regions. One local member will be appointed to the committee by the League of Nebraska Municipalities and one local member will be appointed to the committee by the Nebraska Association of County Officials. There will therefore be a total of 12 “local” voting committee members. To comply with the terms of the settlement agreements, there will be a corresponding 12 “state” voting committee members. The Attorney General or his or her designee and the Director of the Division of Behavioral Health of her or his designee will serve as non-voting ex-officio committee members. The 12 voting “state” members volunteered to serve on the committee based on their prior involvement in the Nebraska Coalition to Prevent Opioid Misuse, a statewide affiliation initiated in 2017 by the Nebraska Attorney General’s Office, U.S. Attorney’s Office, Nebraska DHHS, and UNMC focused on prevention, treatment, and law enforcement efforts regarding licit and illicit opioids.
