Lawmakers Updated on Opioid Settlement Funds

The Budget Review Subcommittee on Human Resources received an update on efforts to disperse Kentucky’s record $478 million opioid settlement. The Kentucky League of Cities played a key role in the deal that ensures local governments receive half of all proceeds from the historic agreement with opioid manufacturers and distributors. Legislators passed House Bill 427 in 2021, a KLC initiative that requires 50% of Kentucky’s settlement go to city and county governments to fund opioid abatement programs. Representative Danny Bentley (R-Russell) sponsored a follow-up initiative in the 2022 session, House Bill 92, that clarified how Kentucky distributes the funds and provided direct payments to cities.

Bryan Hubbard serves as executive director of the newly formed Kentucky Opioid Abatement Advisory Commission. He, Office of Consumer Protection Executive Director Chris Lewis, and Deputy General Counsel and Director of Legal Policy Blake Christopher testified about what the commonwealth should receive and the effort to allocate funds fairly.

Lewis outlined the two agreements that total the historic settlement that included an updated total amount that Kentucky should receive. Distributors AmerisourceBergen, Cardinal Health, and McKesson will pay $388.3 million. Their first payment of $16.6 million will come this summer. City and county governments will receive nearly $8.3 million of those funds. Distributors will make 18 total payments through July 2038.

The Johnson & Johnson settlement equals nearly $90 million with the company making its first four payments this month. The $47.5 million from Johnson & Johnson this month will create a pool of $23.85 million for local governments. Their next payment is due July 2025, and J&J will pay the entire settlement over 11 installments through July 2031.

Click here to read details of the funding schedule presented during the hearing.

Lewis said a national administrator would disperse funds to the commonwealth, cities, and counties. “A list of the cities and counties qualifying for direct payment will be submitted to them,” he said. “Those checks will flow directly from the administrator to those local governments. The same (will happen) with the checks to the commonwealth.”

While HB 92 outlines direct payments for cities, the commission will determine regulations for allocating the state’s settlement monies. Commission members will begin meeting this summer.