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The opioid crisis lawsuit
The City of Carlsbad’s total settlement share is projected at $1.6 million. Courtesy photo
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Carlsbad joins national opioid settlement, projects $1.6M payout

CARLSBAD —The City of Carlsbad will join a $26 billion national settlement resulting from a lawsuit filed against prominent pharmaceutical companies over the opioid crisis that has devastated communities across the country for decades.

The Carlsbad City Council approved the decision to join the legal payout during its Dec. 14 meeting.

The State of California expects to receive between $1.8 billion and $2.6 billion from the settlement, according to a staff report, and the City of Carlsbad is projecting $1.6 million as its settlement portion.

In July, a bipartisan coalition of state attorney generals announced the deal against the three largest pharmaceutical distributors — McKesson, Cardinal Health and AmerisourceBergen — along with manufacturer Janssen Pharmaceuticals Inc and its parent company, Johnson & Johnson.

“The model used to determine allocation of the settlement proceeds was based on information collected by federal agencies for purposes independent of the National Prescription Opiates Litigation,” McMahon said. “The information regarding Opioid Use Disorder was obtained from the U.S. Department of Health & Human Services Substance Abuse & Mental Health Data Archive.”

The distributors will pay the state $21 billion over 18 years, while Johnson & Johnson (and Janssen) will pay up to $5 billion over nine years with $3.7 billion in the first three years. In addition, Johnson & Johnson and Janssen cannot sell opioids for 10 years, cannot fund, provide grants to third parties or lobby for opioids. They must also share trial data under the Yale Open Data Access Project.

According to the staff report, 70% of the funds received by the state will be allocated to each eligible jurisdiction. Carlsbad’s share is projected at $1.6 million from the two settlements, according to McMahon. The distributors’ settlement is estimated at $1.3 million over 18 years and more than $311,048 over nine years from Johnson & Johnson.

McMahon said the city began receiving information about how the state would allocate the money in late October. However, the city was not asked to provide any Carlsbad-specific opioid information to the state, although the allocation of funds is based on information collected from federal agencies, according to McMahon.

The city has several options as to how to spend the money, including allocating a specific amount back to the county or using it for “high impact abatement activities.”

If the city keeps its allotment, 50% of the funds received in each calendar year must be spent on those activities, such as matching funds or operating costs for substance use disorder facilities within the Behavioral Health Continuum Infrastructure Program; create new or expended treatment infrastructure; address needs in communities of color and vulnerable populations; division of people from the justice system into treatment; and youth drug addiction prevention.

“California strongly supports continued investment in combatting the devastation that our communities have suffered because of the opioid epidemic,” Gov. Gavin Newsom said in July. “The opioid epidemic continues to pose a serious threat to the health of Californians. In 2019, California experienced nearly 12,000 opioid-related emergency department visits and more than 3,000 deaths. If approved, this settlement agreement would provide an important investment in opioid treatment and prevention.”

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