Funding The Fight: Local Governments Put Opioid Settlement Dollars To Use

By Neil Cotiaux, posted Feb 3, 2023
Showered with billions of dollars from some of the nation’s biggest drug manufacturers and distributors accused of stirring up opioid abuse, state and local governments are zeroing in on what they will do with the proceeds from massive legal settlements. 

In Southeastern North Carolina, officials in New Hanover County, the city of Wilmington and Brunswick and Pender counties are starting to make decisions on how their shares of $750 million in settlement monies awarded to the state will be used. The windfall is part of a $26 billion agreement involving opioids manufacturer Johnson & Johnson and three distributors: Amerisource Bergen, Cardinal Health and McKesson. 

Stung by an epidemic of opioid abuse, states across the country, acting in concert, have accused leading as well as lesser-known players in the pharmaceutical industry of helping to ignite a yearslong blizzard of opioid abuse that has been wreaking havoc on local communities. 

That damage, state and local officials say, includes the deaths and illnesses of users, developmental delays of infants born to addicted parents, homelessness, violence and the ongoing costs incurred by governments, employers, hospitals and clinics forced to contend with the crisis. 

The Wilmington area has remained on the front line of the opioid epidemic for years. From 2016 through 2020, in New Hanover County alone, 411 individuals died of unintentional overdoses, according to the N.C. Department of Health and Human Services, and 97 of those deaths occurred in a single year. 

In 2022, county officials signaled they would waste no time in putting settlement monies to work when they adopted a first-ever strategic plan that now guides the county’s priorities on opioid abuse and mental illness for years to come.

In addition to the $26 billion settlement, a cascade of payouts from other defendants will follow. Those statewide payouts will include funds from Purdue Pharma and McKinsey & Company, a Purdue consultant, as well as monies from opioid makers Allergan, ENDO and Teva.

Payments from another opioid maker, Mallinckrodt, arrived at local government offices on Jan. 23, with New Hanover County receiving $122,466; Brunswick County receiving $89,325; Pender County getting 24,759; and the city of Wilmington, $5,051.

Settlements with retail giants CVS, Walgreens and Walmart “could bring as much as $600 million in additional funds to help counties and the state address the opioid epidemic in North Carolina,” said Kevin Leonard, executive director of the N.C. Association of County Commissioners. 

“Much like we did in 2021, the NCACC and other key stakeholders will work with counties over the next several months to encourage them to sign on to this important supplemental agreement,” he said.


Going forward, New Hanover County will use two primary sources of funding for opioid- and mental health-related programs: monies from the Johnson & Johnson et al. legal settlement totaling $18.6 million over 18 years, and a $50 million Mental Health and Substance Use Disorder Fund established as part of the sale of New Hanover Regional Medical Center to Novant Health.

For its part, the city of Wilmington will receive $769,000 from Johnson & Johnson and the three distributors, also over 18 years. 

Since December, a joint subcommittee of elected officials from the county and city have held meetings to consider how to use the first tranche of funds. It’s expected the board of commissioners and city council will convene in separate meetings this March to vote on specific proposals, said Jessica Loeper, chief communications officer for the county. Among those proposals are:
• Expansion of medication-assisted treatment programs (MAT) at the county jail for new inmates not currently using the program. Officials estimate the beefed-up initiative could support 300 inmates a year; 
• Expansion of MAT involving EMS crews who handle opioid overdoses. The amended program would go beyond stabilizing the victim and use paramedics and post-overdose response teams to create a pathway to sustained treatment;
• The strengthening of Quick Response Teams through stable funding that would increase harm-reduction, treatment and recovery services to an additional 100 individuals;
• Employment support services to help people in treatment or in recovery with job training and placement;
• Short-term housing in opioid-free settings with daily supervision;
• A stronger focus on assisting homeless individuals in downtown Wilmington, many of whom suffer from addictions;
• and a K-12 opioid abuse prevention program to educate youngsters and keep them out of harm’s way.

Kenny House, vice president of clinical services at Coastal Horizons, a treatment and recovery nonprofit that opened its doors in 1970, believes that wraparound services are critical to winning the fight against substance abuse.

“The main challenges facing our treatment facilities in New Hanover, Brunswick and Pender counties are retaining patients,” House said, with factors contributing to patient nonengagement including “lack of transportation, child care needs, lack of stable housing and difficulty maintaining reliable communication.”

As county and city officials move closer to voting on new and expanded services, advocates for such programs are celebrating the imminent opening of The Healing Place of New Hanover County, a peer-led residential recovery center. A ribbon cutting for the facility, which is scheduled to open in February, was held Jan. 17.

The Healing Place will provide food, shelter, clothing and recovery services as part of a nonmedical detoxification program for individuals addicted to drugs or alcohol. New Hanover County funded construction of the facility at 1000 Medical Center Drive, which can house up to 100 men and 100 women at any time. Emergency shelter and residential clients will be accepted starting in February, with detoxification programs beginning this spring.

On Jan. 24, New Hanover’s commissioners upped their commitment to detoxification programs when they approved an offer to purchase property at 1605 Robin Hood Road for a medical detoxification and stabilization facility in partnership with Trillium Health Resources, RHA Health and Leading into New Communities. The facility will include 16 beds for detox services and 20 beds for transitional housing. 


In Brunswick County, commissioners are also starting to take advantage of their piece of the Johnson & Johnson et al. settlement, which amounts to $13.6 million.  

On the same day The Healing Place’s ribbon cutting was held, Brunswick commissioners approved spending nearly $170,000 to hire a full-time clinician requested by the county’s social services director. The person who is hired for that position will focus on how parents and children are affected by substance abuse, including children who enter foster care. 

“While our social workers can do a lot to help families and children, the mental health and substance abuse clinician position can help families and social workers specifically in areas like referrals for assessments and treatment, assistance with children with specialized needs and crisis support services,” said county spokesperson Meagan Kascsak.

“We anticipate more strategies coming before the board over the years as the county receives its portions of the settlement,” Kascsak said.   

In Pender County, Carolyn Moser, the health and human services director, said approximately $600,000 of the total $3.7 million due to the county from the Johnson & Johnson settlement is in hand. But, she said, there is no rush to determine how that money should be spent.

The county has established a group of community stakeholders who will identify resources that could be used to help tame substance abuse. The group wants to avoid duplication of efforts, Moser said, and there is no fixed timeline for spending proposals to be put forward. 

Currently, Coastal Horizons has two outpatient locations in Pender County, one in Burgaw and one in Rocky Point.

In addition to fresh funding from area governments, the New Hanover Community Endowment recently awarded grants to seven organizations that, in whole or in part, operate substance-abuse programs. Those grants include $250,000 for Coastal Horizons; $200,000 for The Healing Place; and $85,500 for Tides, which helps pregnant and postpartum women who experience substance-abuse disorders.

The awards were among 110 grants totaling $9 million made in the foundation’s first grants cycle and announced in December.

Despite the misuse of fentanyl and troublesome rates of addiction and overdoses in recent years, there is reason for hope, said Coastal Horizons’ House.

“We have made significant progress in educating the general public and medical professionals, reducing the stigma surrounding opioid addiction and decreasing unnecessary opioid prescriptions,” House said about actions taken across the region.

“Collaborative efforts have been established to address the issue, but there is still much work to be done.”
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