Why Should Delaware Care?
Delaware and other states have won $55 billion to date in ongoing legal battles with opioid manufacturers and distributors to abate the overdose crisis across the nation. But questions have been raised about why Delaware took a unique path in getting its funding into communities.
Mismanagement and potential fraud have emerged in recent months in Delaware’s quarter-billion-dollar program to combat the opioid epidemic, even as the state’s strategy for doling out the money was supposed to be better, and more efficient, than what was done elsewhere.
In 2021, Delaware lawmakers created a new commission to recommend where money from the state’s many legal settlements with opioid manufacturers and distributors should go. That commission, run by Lt. Gov. Bethany Hall-Long’s office, has been at the heart of the issues surrounding Delaware’s opioid fund.
The state has already awarded $15 million of its expected $250 million in an effort to save lives in a state that ranked fourth in the nation in per-capita overdose deaths in 2022. Last year, 527 people died from drug overdoses – a 2% decrease from the prior year.
But while other states left funding questions to individual jurisdictions – including counties, cities and even small towns – Delaware pooled all of its funding together in a statewide program, hoping to maximize its effect in a small state.
It was the only state in the nation to use that approach.
How did Delaware get the money?
After the depths of the nation’s addiction crisis stemming from prescription opioids became apparent in the 2010s, governments began suing the supply chain of opioid manufacturers, distributors and retailers that contributed to hundreds of thousands of deaths nationwide.
Delaware entered the fray in 2018 after former Attorney General Matt Denn sued nine companies, including Purdue Pharma, McKesson, Cardinal Health, Amerisource Bergen, CVS and Walgreens, among others.
The suit claimed opioid manufacturers knowingly downplayed the risks of using opioids to treat chronic pain, and used an “aggressive marketing campaign” to push that narrative forward. This led to an overprescription of opioids across the U.S., leading to a nationwide spike in overdose deaths.
As the years went on, Delaware joined other states in those efforts. By 2022, a $26 billion settlement was reached between the states and the “big three” pharmaceutical opioid distributors – McKesson, AmerisourceBergen, and Cardinal Health – and one manufacturer, Johnson & Johnson.
Litigation passed through the hands of two attorney generals and led to an expected $250 million entering Delaware to reduce overdose deaths and abate the effects of opioids in Delaware.
But in late-June, a decision from the U.S. Supreme Court put $45 million in settlement funding to Delaware in limbo after the court slapped down a multi-billion dollar bankruptcy deal against Purdue Pharma, the maker of the powerful painkiller OxyContin, and members of the Sackler family that owned it.
Attorney General Kathy Jennings decried the decision, pointing to the impact it would have on Delaware’s communities that benefit from spending.
“We spent years fighting to hold the Sacklers accountable despite their exploitation of the bankruptcy process,” she said. “We were one of eight states whose efforts secured an extra $1 billion from the Sacklers — and effectively doubled Delaware’s settlement.”
Why was the POSDC created?
In surrounding states like Maryland, New Jersey or Pennsylvania, money from the national settlements went primarily to counties, towns and to the state government to be spent at the discretion of local leaders. Many states have their own advisory boards, but they only make recommendations or offer oversight of spending.
But in Delaware, six county and local leaders agreed to sign away their individual claim to funds and future litigation to instead take seats on the oversight body that would manage the dollars.
Who would oversee such an enormous pot of money was a question of debate in 2021, when the Delaware General Assembly began planning for how the money would be disbursed.
Legislators ultimately created the Prescription Opioid Settlement Distribution Commission (POSDC). The appointed body would review applications for grant funding and recommend approvals to the Behavioral Health Consortium, another appointed but more tenured body, which has final consideration.
Under the terms of the law, the POSDC would be chaired by Delaware’s attorney general and governor, or their designee. While Jennings served out her role, Gov. John Carney chose to appoint Hall-Long to take his place.
In a statement in response to why he didn’t take the seat, his office defended the decision and Hall-Long’s leadership.
“She is a boots-on-the-ground leader,” his office said. “Delawareans, particularly vulnerable Delawareans, are better off thanks to her leadership.”
Hall-Long, a registered nurse who has long made care for the homeless and addicted a hallmark of her eight-year tenure, is also the chair of the Behavioral Health Consortium. The newly created POSDC was also staffed by members of Hall-Long’s office, giving them oversight of the administrative duties involving the fund.
Recommendations reviewed by POSDC staff are voted on by members of the full commission, who include co-chairs Hall-Long and Jennings, as well as 12 other voting members.
Some members include Delaware State Sen. Stephanie Hansen (D-Middletown), who sponsored both bills creating opioid remediation programs, as well as Delaware Division of Substance Abuse and Mental Health (DSAMH) Director Joanna Champney.
If approved, those recommendations are sent to the BHC for another vote and final approval before applicants officially receive awards.
The Remediating Opioids Across Delaware through State-Municipal Abatement Partnership, or ROADS MAP, gave local governments a seat at the table around spending decisions. Those that signed on, including all three counties and major towns and cities like Wilmington, Newark, Dover, Middletown, Milford and Seaford, received a spot on the POSDC’s Local Governments Committee.
Members of the Local Government Committee have “statutory authority” to make funding recommendations to the commission. But in recent months, it’s struggled to even reach a quorum to conduct business, and just recently approved meeting minutes from Jan. 10.
What are the best practices?
In Delaware, allocating funds is based on guidance from a set of principles put together by Johns Hopkins University, as well as “Exhibit E,” which is a piece of the national settlement agreement.
It lists specific and targeted uses for the funds like increasing access to overdose reversal agents like naloxone or offering transportation to get people to needed services.
Shelly Weizman, the associate director of the Addiction and Public Policy Initiative at Georgetown University’s O’Neill Institute, said the settlements present an opportunity to drive reform on opioid abuse across the nation.
“I think everyone can agree that it’s not working what we’re doing now, and something major needs to change,” Weizman said.
She also said that people who have been affected by substance use disorder should be at the center of those conversations before funds are spent.
The O’Neill Institute focuses on the governance of settlement funds, and put together its own model law for states and local governments to establish strong protections around spending. A key component of that is making sure state and local governments don’t supplant their budgets using settlement funds.
Many of the states had their own way of dividing settlement dollars they received as part of the national agreement. Some states had 50/50 splits, while others had the lion’s share go to either the state or local governments, according to Weizman.
That split, she said, depends on the relationship between smaller municipalities and the states. In a smaller state like Delaware, Weizman said it may make more sense for the state to get most of the funds.
When it comes to what’ll happen when all of the funds are gone, Weizman said she’d like to see more planning from states and localities to be targeted in their spending, and take advantage of different federal grants so settlement funds can be focused elsewhere.
“I think there’s some real pressure to get the money out the door, to spend the money [to] put out the fires, so to speak,” Weizman said. “But it’s a very unique opportunity to be innovative and be forward-thinking.”
Samantha Repka, a research associate at Duke University’s Margolis Institute for Health Policy, put together a toolkit for leaders around the country to have more information about the needs in their state.
Repka said a key part of making sure the settlements are put to good use is funding medication-assisted treatment, utilizing maintenance drugs like methadone, naltrexone and buprenorphine to treat substance use disorder.
Other points Repka pushed were increasing collaboration between physical and mental health professionals to offer more holistic treatment, as well as states spending time to understand where funds could be most effective.
“We want to avoid Tobacco 2.0, where the dollars went to fill budget gaps, build bridges, roads, and really wasn’t focused on addressing the crisis at hand,” Repka said.
This is the first story in a three-part investigation, where Spotlight Delaware analyzed all of the grant applications, contracts signed by recipients and grant reports shared with the lieutenant governor’s office to determine how funds have been allocated in the state. If you or someone you know is struggling with addiction, here’s a list of treatment centers in Delaware.
