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Vermont is getting more than $100 million from opioid lawsuits, with more on the way. What will it do with the windfall?

 Opioid tablets are strewn across a table with prescription bottles against a dark background
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Vermont is slated to receive more than $100 million dollars from various opioid-related settlements. The state now must decide what to do with the windfall.

On a sunny September day almost exactly four years ago, Attorney General TJ Donovan stood in front of the Chittenden County Superior Court in downtown Burlington to announce the state was suing Purdue Pharma. In the lawsuit, the AG’s office alleged the company's aggressive — and deceptive — marketing of opioid painkillers led to the current drug crisis.

“Purdue Pharma lied, they misrepresented, they fabricated," Donovan said during the press conference, according to Seven Days. "And they spread falsehoods, and they made billions off it — and they created a path of destruction that the state of Vermont is still reeling from."

The attorney general’s office went on to file lawsuits against the Sackler family, the owners of Purdue Pharma, as well two opioid distributors. The office was also part of a multi-state coalition of attorneys general who were investigating other companies' alleged roles in the opioid crisis.

More from Vermont Public: Vermont is poised to get millions from national settlement with Purdue Pharma

Now, after years of litigation and investigation, money is coming in. Vermont is slated to receive more than $100 million from the cases that have been settled so far, according to the AG’s office. That number will go up, because Vermont is slated to receive funds from recent national settlements with four opioid manufacturers that combined, total more than $8.5 billion.

The amount of money Vermont gets from each of those settlements hasn’t been determined yet, said Deputy Attorney General Joshua Diamond.

“Population of a state, the number of opioid deaths on a pro rata basis, those who have been diagnosed with opioid use disorder — those are the type of factors that go into the allocation determination,” Diamond said.

There could also be more settlements stemming from the multi-state investigation of opioid related companies, though Diamond declined to provide details about ongoing investigations.

Vermont is slated to get about $35 million from Purdue Pharma, though the settlement is also still winding its way through the courts after some groups, including the Department of Justice, objected to terms of the deal that would protect the Sackler family from future lawsuits.

While the top line numbers in these settlements are large, the state won’t get all the money at once. The largest single settlement — about $52.7 million from three opioid distributors — will be paid out over 18 years, which means the state will get approximately $2.9 million annually. One of the smallest settlements, about $1.5 million from McKinsey, will be paid over five years.

According to the AG’s 2018 lawsuit against Purdue Pharma, Vermont spent $70 million on its opioid treatment program between 2012 and 2017. Another study cited in the lawsuit estimated that in 2007, the total health care spending on opioid misuse in Vermont exceeded $38 million.

More from Vermont Public: More than 200 Vermonters died from opioid overdoses in 2021

The toll of the crisis goes far beyond the financial. In the last decade, 1,126 Vermonters died due to opioid overdoses. Since the pandemic began in 2020, overdoses fatalities have increased, and last year 210 people died from overdoses, the highest number since the state started keeping records.

“No amount of money is going to be adequate to really repair the lives lost or adversely impacted by this crisis,” Diamond said. “It's been devastating here in Vermont.”

The funds will largely go to opioid disorder treatment and prevention. But what gets funded hasn’t been determined, and Vermont's settlement funds will be divided into three “buckets,” Diamond said.

The state will get about 15%, and another 15% will go to 69 Vermont municipalities and 12 counties who decided to join a national lawsuit. (Only Grand Isle and Essex counties didn’t join the lawsuit.)

“My story through substance use and recovery is directly connected to, I guess, the misdeeds of these companies. I also want to recognize that we need to use this money to ensure the next substance use crisis isn't as devastating and … [doesn’t] involve opioids."
Scott Pavek, substance use policy analyst for Burlington

Some of the money that goes directly to the state will be used to cover legal fees the AG’s office incurred when it hired a third-party law firm, Washington D.C.’s Cohen, Milstein, Sellers & Toll, to help with the opioid litigation.

The amount of money the firm will receive hasn’t been determined yet, Diamond said. But it will likely be significant. According to the contract, Cohen Milstein’s payment will be a portion of the settlement funds, and the amount changes based on the size of the settlement. The firm would get 25% of the funds if the total amount is less than $10 million, but if the amount is over $20 million, the firm would get 10%, according to the contract.

The bulk of the money will be part of a special opioid abatement fund. The Legislature will ultimately decide where that money goes, but they’ll get input from an advisory board that was established this year.

That 17-member group, called the Opioid Settlement Advisory Committee, includes people from health care, law enforcement, addiction recovery, and municipal leaders.

The committee met for the first time this month. Members say right now, they’re looking broadly at what kinds of programs should receive funding.

“I want to make sure that what we're doing is evidence-based, and also that it is with a lens and a practice of harm reduction,” said Sen. Ruth Hardy, who’s on the committee. “That we're not funding programs that make people feel bad or shame or are ineffective in their own efforts to get a handle on their substance use.”

More from Vermont Edition: A Vermont mom lost her son to opioids. She told the makers of Oxycontin his story

Some harm-reduction measures that could be expanded are needle exchanges and programs that distribute overdose reverse medication, said Scott Pavek, Burlington’s substance use policy analyst and a member of the advisory committee.

Another idea for the funds: Bolster pay for those who work in the substance misuse field, said Tracie Hauck, director of Turning Point Rutland. Hauck, who’s not on the advisory committee, wants to see some of the money go to recovery centers like the one she runs — specifically so she can boost wages for her eight-person staff and offer them benefits.

“We need to have consistent staff,” Hauck said. “[Staff] have to live, so they gotta move on to a job that pays them more. But they have a passion for doing this work, and it's just sad because then you're starting from scratch, again, building that trust with a lot of people you serve.”

Pavek, who’s on the committee, hopes that people will also think about how the money can be used to broadly address substance use disorders.

“My story through substance use and recovery is directly connected to, I guess, the misdeeds of these companies,” he said. “I also want to recognize that we need to use this money to ensure the next substance use crisis isn't as devastating and … [doesn’t] involve opioids.”

Have questions, comments or tips? Send us a message or get in touch with reporter Liam Elder-Connors @lseconnors

Updated: September 21, 2022 at 9:58 AM EDT
This story has been updated to clarify language around the contract and expected payout to the third-party law firm working with the Attorney General's office.
Liam is a reporter based in Burlington and covers a variety of issues, including courts, law enforcement and housing.
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