Most of the money Oklahoma secured from opioid companies has gone unspent

Kassie McClung
The Frontier

Oklahoma has secured more than $372.6 million in settlements from drug manufacturers and distributors, but only about 15 percent of the money has so far gone to pay for opioid addiction research and treatment. Millions more dollars have gone to pay for outside attorneys fees.  

And Oklahoma State University has yet to use any of the more than $100 million it received in state settlement money in 2019 to create a new national addiction treatment and research center. 

Drug overdoses killed more than 93,000 people in the U.S. last year — a record number in part driven by the presence of fentanyl, a powerful synthetic opioid, according to the Centers for Disease Control and Prevention. 

In 2017, then-Oklahoma Attorney General Mike Hunter filed a lawsuit against opioid manufacturers alleging they intentionally created the opioid epidemic with aggressive marketing campaigns that exaggerated the drugs’ benefits, and minimized their addictive and potentially dangerous qualities.

Before the trial started in May 2019, Oklahoma had settled with all of the defendants except for Johnson & Johnson.

Though the state received millions of dollars from the settlements, only about $58 million so far has been used on efforts to relieve the opioid crisis in Oklahoma. About $68.5 million from the settlements went to outside attorneys fees, according to the Oklahoma Attorney General’s Office.

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FILE - This Aug. 29, 2018, file photo shows an arrangement of Oxycodone pills. Associated Press file photo

Officials from the Oklahoma State University Center for Health Sciences, which received the bulk of the funds, and the Oklahoma Attorney General’s Office told The Frontier the coronavirus pandemic has slowed efforts to utilize the money.

Meanwhile, funds awarded from the state’s trial against Johnson & Johnson are still tied up in a legal battle. 

In August 2019, Cleveland County District Court Judge Thad Balkman ruled Johnson & Johnson helped fuel Oklahoma’s opioid crisis and must pay the state $572 million to compensate the state for the social and economic toll of the epidemic.  

However, it’s unclear how much Johnson & Johnson will ultimately pay because both the company and the state have appealed the judgment, and the case is now awaiting a decision by the Oklahoma Supreme Court.

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OSU Center for Health Sciences yet to spend millions

In March 2019, Hunter announced that the state had reached a $270 million settlement agreement with Purdue Pharma, the maker of OxyContin, and its owners, the Sackler family. 

The bulk of that money went to the Oklahoma State University Center for Health Sciences in Tulsa to establish a foundation to treat and research addiction on a local and national level. 

Some legislative leaders were frustrated that Hunter gave the bulk of the funds to the university instead of giving it to the state Legislature to distribute. 

Rep. Mark McBride, R-Moore, was one of the lawmakers who was critical of the attorney general’s decision to award Oklahoma State University the majority of the settlement funds in 2019. He’s still disappointed more than two years later, he told The Frontier.

“I have accepted it because I didn't have much of any other choice,” McBride said. 

McBride believes the funds should have been distributed to cities and counties for efforts to relieve the opioid crisis.

“It’s nothing against Oklahoma State University,” he said. “I’m just disappointed the state didn’t get more of a say so.” 

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Purdue paid OSU Center for Health Sciences $102.5 million, and the Sacklers agreed to contribute $75 million over five years to the foundation. Purdue will also give the foundation $20 million worth of medication assisted treatment drugs over five years. From the settlement, $12.5 million was set aside to go to counties and municipalities. 

OSU Center for Health Sciences has received the full $102.5 million, as well as $30 million from the Sackler family so far, said Melani Hamilton, a spokeswoman for the organization, but has yet to spend any of the money. The center has also received a “small portion” of buprenorphine, a medication typically used to treat opioid addiction, and has used about $100,000 worth of the drug so far. Medication is being dispensed to patients through the center’s Tulsa Addiction Medicine Clinic, Hamilton said in an email.  

The center has developed a plan for wider distribution of the medication and is exploring potential partnerships for statewide distribution, Hamilton said. Foundation board members will form a committee to develop policies for investments and spending of the settlement funds, but that committee has not yet been formed, she said.

“Today, the Board’s focus is on completing a governance structure to ensure accountability and optimize investment in research and treatment,” Hamilton said in an email. 

The coronavirus pandemic has slowed the board’s ability to administer and transact business, Hamilton said. OSU also held off on making any spending decisions after the Centers for Medicare and Medicaid Services penned a letter to the state in 2019, saying it would seek a slice of the Purdue settlement. Only within the last four months did OSU get clearance from the state Attorney General's Office that CMS was no longer pursuing the funds, said Dr. Johnny Stephens, interim president for the OSU Center for Health Sciences.

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Stephens said the university’s plans to build a nationally recognized addiction research center are still on track.

“Our vision remains intact to create a national center at OSU using resources from the settlement, grants and fundraising endeavors,” Stephens said in an emailed statement. “We are creating a place where scientists, researchers, physicians, health experts and policymakers from across the country can come together around initiatives aimed at preventing, treating and eradicating this addiction.”

Stephens told The Frontier in a phone call that although OSU has yet to spend any of the settlement funds, the university has invested in opioid treatment through a new research center in Tulsa, virtual care services across the state and outpatient treatment in Tulsa.

He expects the board to move forward with decisions on how to spend the funds within the next three months. 

“I’m proud of the initiatives that we have taken, I think it’s the right thing for the state,” Stephens said. “I think it’s a much-needed resource for the state.”

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State agencies received $57.9 million

Following pushback from Gov. Kevin Stitt and legislative leaders over how Hunter dispersed the Purdue payments, an account of more than $70.8 million within the state treasury was created for opioid settlement funds in 2019. 

The funds, which are under the state Legislature’s control, can only be used to respond to the state’s opioid crisis, according to the settlement agreement. 

In other settlements, Oklahoma received $8.75 million from Endo Pharmaceuticals; $8.9 million from McKinsey & Company; and $85 million from Teva and its affiliates. The agreements were not an admission of wrongdoing. 

For the 2021 and 2022 fiscal years, lawmakers gave seven state agencies about $57.9 million from the account, and about $12.95 million is left, according to data from the Office of Management and Enterprise Services. 

Lawmakers have so far appropriated almost $16 million to the Oklahoma Health Care Authority. The funds have been used to add benefits for members of SoonerCare, the state’s Medicaid program, said Katelynn Burns, a spokeswoman for the agency. 

“SoonerCare members now have access to alternative treatments for pain management, such as chiropractic care and physical therapy,” Burns said. “The agency also has several other initiatives aimed at combating this issue such as medication assisted treatment and programs for providers.”

The Oklahoma Department of Corrections has received about $3.1 million. The funds have been used to pay for general medical expenses for inmates, said Justin Wolf, an agency spokesman. 

The Oklahoma State Department of Mental Health and Substance Abuse Services received $12 million last fiscal year and $15.5 million for the next. Those funds went toward residential and outpatient services, and community programs and treatment courts, said Jeff Dismukes, an agency spokesman. 

Lawmakers have appropriated $4.8 million to the Oklahoma Bureau of Narcotics and Dangerous Drugs Control. The money has so far gone to pay salary, benefits and equipment expenses for employees assigned to work in the agency’s division that oversees opioid compliance and investigations, said agency spokesman Mark Woodward. 

The state Attorney General’s Office received $3 million. The funds are being used to pay legal fees, investigations and the salaries of staff who work on opioid-related litigation or projects, said agency spokesman Alex Gerszewski.

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Abatement board yet to appropriate funds

Last year, Gov. Kevin Stitt signed two bills into law that created the Oklahoma Opioid Abatement Board under the state Attorney General’s Office. Another bill allowed the board to access and distribute settlement funds. But the board has met once so far for organizational purposes and has yet to distribute any money or set parameters for how it will determine eligibility for the funds.

The abatement board has about $23 million from settlements that will go to cities, towns and counties for opioid abatement efforts, Gerszewski said. 

On the eight-member board, one position, which the House Speaker must appoint, remains vacant. Speaker Charles McCall has made one appointment and is close to making the other, his spokesman said last week. 

Johnson & Johnson decision on appeal 

Following a seven-week trial in 2019, Balkman ruled pharmaceutical giant Johnson & Johnson fueled Oklahoma’s opioid crisis through a “false, deceptive and misleading” marketing and drug distribution campaign, and must pay the state $572 million to help diminish the state’s burden from the deadly epidemic.

The judgement was based on how much state attorneys said one year of abatement would cost. 

However, in late 2019 Balkman reduced the amount awarded to $465 million, agreeing with attorneys for Johnson & Johnson that he had made a math error in calculating the judgment. 

It remains unclear how much the company will owe the state, as both sides have appealed.

Lawyers for Johnson & Johnson claim Balkman misapplied the state’s public nuisance law and that the judgment should be reduced by $355 million to take into account pretrial settlements with other drug makers. 

Oklahoma argues the $465 million awarded would only pay for a year of its abatement plan and that a district judge should annually review whether the public nuisance has been fixed. 

During the trial, Oklahoma claimed it would cost billions of dollars over 30 years to clean up the state’s opioid crisis.

The parties are now awaiting a decision by the Oklahoma Supreme Court, and the state won’t get paid until the legal battle ends.