Local governments in West Virginia will start seeing opioid settlement money by the year's end, the board in charge of distributing the lion’s share of around $1 billion in funds announced Monday.
Around $73.5 million will be deployed to municipalities and counties this calendar year in the state most hard-hit by the opioid epidemic, according to Jefferson County Prosecuting Attorney Matt Harvey, who was elected chair of the West Virginia First Foundation at the board's first meeting at the Truist building in Charleston.
Local governments will have the final say on how to spend the funds, which represent part of around $300 million in initial payments from opioid distributors following years of court battles. The nonprofit foundation is receiving it's first $217.5 million allocation this year and its board of representatives will decide how to spend it. Around $9 million will go into trust.
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All funds must be used to abate the opioid crisis through efforts such as evidence-based addiction treatment, recovery and prevention programs, or supporting law enforcement efforts to curtail distribution.
"We want to restore families," Harvey said at a news conference at the state Capitol. "We’re so hopeful that we actually have the tools to fight back."
Officials from 55 West Virginia counties signed on to a memorandum of understanding that allows money to be funneled through the West Virginia First Foundation and dictates how it can be spent. The state Legislature and Gov. Jim Justice gave it the green light earlier this year.
According to the agreement, the foundation will distribute just under three-quarters of the settlement money. Around a quarter will go directly to local communities and 3% will remain in trust.
The state is receiving money from each of its settlement agreements on a staggered schedule, with annual payments coming until at least 2036. The private foundation alone is expected to receive around $367 million over the next five years.
Five members of the foundation’s board were appointed by the governor and confirmed by the state Senate. Six board members were elected by local governments.
The 11-member board met for the first time Monday, where they made introductions, opened a bank account for the funds, which have been held in escrow by Huntington Bank. Harvey was voted chair and state Health Officer Matt Christiansen was voted vice chair. Former Secretary of the West Virginia Department of Homeland Security Jeff Sandy — a certified fraud examiner and anti-money laundering specialist — will serve as treasurer.
Over the past four years, drug manufacturers, distribution companies, pharmacies and other companies with roles in the opioid business have reached settlements totaling more than $50 billion with governments.
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While the biggest amounts are in nationwide settlements, West Virginia has been aggressive in bringing its own lawsuits and reaching more than a dozen settlements.
In May, West Virginia Attorney General Patrick Morrisey announced that the state had settled with Kroger for $68 million for its role in distributing prescription painkillers.
Kroger was the last remaining defendant in a lawsuit involving Walgreens, Walmart, CVS and Rite Aid: Walgreens settled for $83 million; Walmart settled for more than $65 million; CVS settled for $82.5 million; and Rite Aid settled for up to $30 million.
The lawsuits alleged the pharmacies’ contribution to the oversupply of prescription opioids caused "significant losses through their past and ongoing medical treatment costs, including for minors born addicted to opioids, rehabilitation costs, naloxone costs, medical examiner expenses, self-funded state insurance costs and other forms of losses to address opioid-related afflictions and loss of lives."
