Minnesota lawmakers are pushing for quick passage of legislation that would ratify a deal between the state and local governments to spend the $300 million the state will receive from the settlement of lawsuits against opioid makers and distributors.
The legislation — Senate File 4025 and House File 4265 — would block additional lawsuits against the drug makers that are part of the settlement. It would also delay — but not lift — the expiration on the state’s current license and registration fees for opioid-makers. The fees were adopted in 2019 to help state and local governments in Minnesota respond to the opioid crisis, which has killed more than 5,400 people in Minnesota.
The legislation would clear the way for settlement money to begin flowing, possibly as soon as this month, and is the latest development in a years-long battle over how to hold the makers and distributors of the addictive painkillers accountable.
Senate Finance Committee Chair Julie Rosen, R-Fairmont, said her bill emerged from a summertime settlement with opioid maker Johnson & Johnson and drug distributors McKesson, Cardinal Health and AmerisourceBergen. The settlement is worth a total of $26 billion to the states and local governments that brought the lawsuits, which alleged that opioid manufacturers and distributors “created and fueled the opioid epidemic with irresponsible and misleading marketing and inadequate monitoring of these dangerous products,” according to a summary by the attorney general’s office .
The settlement money, however, came with unusual requirements to encourage local governments to join with their states to settle. Specifically, the more city and county governments that agreed to absolve the companies of future liability, the more money those governments would receive.
“This is meant to incentivize cities and counties to join and incentivize states to encourage them to join,” Assistant Attorney General Eric Maloney, who has been working on the state’s opioid lawsuits since 2016, told the Senate Civil Law committee last week.
The state’s maximum share of the settlement is $300 million, and is to be paid out over 18 years. The amounts going to local governments range from Hennepin County’s $43.3 million to Red Lake County’s $118,000.
Only the Minnetonka School District did not sign onto the settlement. The bill would prevent the district from pursuing litigation against the four plaintiffs, though it could still get money from the settlement, Rosen said.
The bills, sponsored by the two lead lawmakers on the issue, Rosen and state Rep. Liz Olson, D-Duluth, codify the agreement between the state, all 87 counties and 147 cities and outlines the distribution of the money: 75 percent to local governments and 25 percent to the state.
Opioids remain a public health problem in Minnesota, though more of the pills entering the state are synthetic opioids including fentanyl rather than prescription drugs, and there are significant disparities in its impact. American Indians are seven times as likely as whites to die from opioid overdoses as whites, while Blacks are twice as likely as whites to die.
The settlement money will be allocated by the Opioid Epidemic Response Advisory Council, with some of the state’s share providing funding, through DHS, to tribal social service agency initiative projects for child protection services.
The legislation also puts off, until 2031, the suspension of registration and license fees on the opioid industry. Those fees were created in 2019 to fund the work of the advisory council until lawsuits settlements could replace that revenue. Set to expire once the state had collected at least $250 million (but no sooner than 2024), the fees were a hard-fought compromise between the GOP Senate and the DFL House and came over the opposition of the pharmaceutical industry.
The state and local negotiations took four months, but if the bills pass quickly, money could start flowing to all counties and 33 cities this month, Rosen said. While more cities had joined in the lawsuits, the agreement sends money only to those with populations of at least 30,000 that have public health departments.
“We don’t very often get resolutions from all 87 counties,” said Julie Ring, executive director of the Minnesota Association of Counties. “But in this case we do have resolutions of support for this bill.”
The attorney general’s office is still expecting money from two other legal actions: the bankruptcy resolutions with Purdue Pharma and Mallinckrodt Pharmaceuticals. Whatever the state receives from those will be distributed according to the state/local government agreement.
Before the 2019 law was passed, drug makers paid an annual license fee of $5,260. The new law increased that to $55,260 and added an annual opioid product registration fee of $250,000. Under the new legislation, the license fee drops back to $5,260 and the registration fee sunsets.
“At the time when we settled this bill in 2019, we knew of the lawsuits and the potential litigation but we were definitely uncertain of the mechanics,” Rosen said.