Which Pa. counties are receiving the most opioid settlement money — and why

This story originally appeared on Spotlight PA.

A new Spotlight PA analysis of recently released opioid settlement payments shows which Pennsylvania counties are receiving the most money per resident to help them respond to an epidemic that continues to kill thousands of people each year in the state.

The data show that based on that measure, there are wide disparities on how much individual counties received.

Payments for general county government and county district attorney offices equaled about $6.50 per resident across the state for 2022. But payments varied by county — from a low of $1.13 per resident in Centre County to a high of $23.23 per resident in Cameron County.

A spokesperson for the Pennsylvania attorney general’s office — which worked to convince county and municipal officials to sign onto the deal — defended the distribution plan that Pennsylvania officials ultimately agreed to.

The formula “considers the level of need in the respective counties, and population does not necessarily correlate with biggest need,” spokesperson Brett Hambright told Spotlight PA and WESA in an email. For instance, he said, some rural counties “had some of the highest rates of addiction in the state.”

He said Pennsylvania’s share of the national settlements is greater than its population because it was “deemed a more severely impacted state” as part of those agreements.

Each county government in the state could choose to sign onto the national $26 billion agreement with drug companies, or choose to pursue litigation on its own. Some district attorney offices and other public agencies — ones that had initiated their own litigation — faced the same choice. The more entities that agreed to sign up in Pennsylvania, the more the state stood to receive overall.

Persuading so many different governments with varied wants or needs was a complicated process that lasted several months.

Tom VanKirk, the former chief legal officer for Pittsburgh-based Highmark Health who mediated discussions over how to distribute opioid settlement funds in Pennsylvania, has publicly acknowledged the difficulty of pleasing everyone involved.

“Our goal was to develop an allocation formula that would be equally unsatisfactory to everybody,” VanKirk said during a public meeting in March, “in hopes of getting as many people signed on as possible.”

All 67 county governments in the state signed on, including officials representing the city of Philadelphia and Allegheny County governments. The plan also included incentives if a county’s most highly populated municipalities participated in the deal, and hundreds of them did.

Separately, nearly a dozen district attorney offices that were involved in litigation joined the settlement. Philadelphia and Allegheny County district attorneys were the only ones who refused to join, according to VanKirk and the attorney general’s office. Those two district attorneys said that their communities “deserve deep, sustained compensation in the form of billions of dollars from these companies” that caused harm, and argued local judges should decide the payouts.

Overall, the state attorney general’s office has estimated the deal with Johnson & Johnson and three major drug distributors — AmerisourceBergen, Cardinal Health, and McKesson — will bring about $1 billion to Pennsylvania. The drug distributors are scheduled to make their payments over 18 years, and state officials say settlements with other opioid companies will follow the same formula in Pennsylvania.

Counties and other local governments were allocated more than $86 million in payments for 2022, and it’s estimated they will receive more than $56 million from a third round of payments in December. That third payment includes money from Johnson & Johnson and three drug distributors, plus funds from bankruptcy proceedings for drugmaker Mallinckrodt.

Pennsylvania’s distribution plan took into account various factors. Need was measured by county drug overdose deaths, opioid use disorder-related hospitalizations, the number of naloxone doses administered by emergency medical services, and prescription opioids dispensed.

“It never was intended to be distributed on a population basis,” VanKirk, who now chairs the trust overseeing Pennsylvania’s opioid settlement money, told WESA and Spotlight PA. “It was intended to be distributed in a manner where the money went to those areas that were most severely impacted by the opioid crisis.”

There were other factors in the plan for Johnson & Johnson and the drug distributors.

• More than half of the state’s 67 counties are receiving extra payments under the deal because of their role in litigation against drug companies prior to the settlement.
• Two counties — Allegheny and Montgomery — missed out on nearly $1 million combined last year because not all of their more-populated municipalities signed onto the deal in time. And as of late September, Allegheny County officials were still working to convince all of their required municipalities to sign — or risk losing out on about $479,000 more in the next round of payments if those municipalities didn’t.
• Several rural counties are benefiting from a guarantee that all counties will each receive a minimum of about $1 million over 18 years. Researchers from Penn State who provided technical assistance as part of negotiations said the $1 million guarantee was intended to ensure rural counties received a meaningful amount of resources to address needs in their communities.

Officials in some counties declined to directly weigh in on the overall fairness of the distribution plan.

“I don’t know that we know what fair is and what fair should be,” Steve Dershem, a commissioner in Centre County, told Spotlight PA and WESA. “We know that when there’s a dozen opioid deaths in our community, that’s a dozen too many.”

After accounting for attorney costs and fees and certain administrative expenses, 15% of the opioid settlement funds to be distributed in Pennsylvania go to an account that the legislature and governor control. The rest goes to counties and other local governments.

Some county leaders and public health advocates have big hopes for what this money can accomplish.

In northeastern Pennsylvania, Sullivan County — with its tens of thousands of acres of state game lands and a population under 6,000 — received more than $100,000 for its 2022 payments. That works out to about $17.50 per resident, one of the highest per-resident rates in the state.

County commissioners there approved using a portion of that money to hire a county case manager and recovery liaison, who’s been working to expand access to opioid addiction medication and help get people into treatment programs. The opioid issue is personal for Sullivan County Commissioner Donna Iannone, who said her younger sister died from a heroin overdose many years ago.

“When this money came, it was like, ‘Hell, yeah!’” she told Spotlight PA. “We’re going to … make as big an impact on people’s lives that we can to keep another family member from having to ever go through that.”

Factoring in harm

Overall, 70% of the opioid money that’s being sent to government agencies by Pennsylvania’s opioid trust is going to counties through an abatement account. Distributions from that account are based on the four-part formula that factors in the harm and need in the area.

For instance, Philadelphia’s population of more than 1.5 million people accounts for 12% of the entire state. But under the formula it receives a larger share from that county abatement account — 23% of those funds.

Lawrence County, on the Ohio border in western Pennsylvania, is another that receives a larger share of funds based on the formula. The county’s population of nearly 85,000 people equals 0.65% of the state’s total. Under the formula, Lawrence County receives a little under 1% of money from the county abatement account.

Both Philadelphia and Lawrence County rank in the top 10 in terms of opioid settlement payments per resident — a figure that also includes payments they received based on their role in litigation.

Lawrence County Commissioner Loretta Spielvogel described the county’s ranking as “unfortunate” because it reflects how much need there is in the area.

“We want to do everything that we can possibly do to make sure that that money is used wisely,” she said.

Allegheny County’s share of funds from the abatement account is also higher than its share of the state’s population. The county’s population of 1.2 million people equals 9.5% of the state’s total. The formula calls for it to receive about 11.5% of funds from the county abatement account.

Role in litigation

An additional 15% of Pennsylvania’s opioid settlement money is being distributed to counties and other local agencies that were involved in their own litigation against drug companies.

For the Johnson & Johnson and drug distributors agreements, Carbon and Delaware counties, along with Philadelphia, are all receiving extra payments to recognize their “substantial work to advance litigation,” according to Pennsylvania’s agreement. In an August news release, Delaware County officials noted they were receiving millions of additional dollars due to their role in opioid litigation and the “proactive efforts” of county government and the district attorney’s office.

Centre County is one of the counties that did not initiate its own litigation prior to the attorney general’s office settlement. Dershem said the outcome of any litigation would have been uncertain, and county officials saw an opportunity to benefit from the state doing the heavy lifting.

Commissioner Mark Higgins said the county, given its lower number of overdose deaths, wouldn’t have been the best plaintiff — and appreciates the money it is receiving.

“We need to keep putting more resources into this and further reducing stigma,” Higgins said.

A $1 million guarantee

VanKirk told Spotlight PA and WESA there was “no magic as to how we came up with a million,” and that figure was seen as a significant amount to encourage the smaller counties to join.

Providing treatment services in rural communities can pose challenges, including for transportation, according to William Stauffer, executive director of a statewide alliance of recovery organizations. Urban areas can benefit from efficiencies that come with serving more people.

“If you have larger programs with more resources, it’s easier to put something in than if you were smaller,” Stauffer, who wasn’t involved in creating the distribution formula, told Spotlight PA and WESA.

Not enough participation

Pennsylvania’s order creating its opioid trust includes bonus payments for counties if all of their municipalities with 10,000 or more people sign on. Notoriously fragmented Allegheny County — it has 130 different municipalities — is the only county that hadn’t hit that mark as of late September. U.S. Census figures show there are more than two dozen municipalities with more than 10,000 people in the county.

Because Allegheny County did not have enough municipal participation during the first two rounds of payments, it lost out on more than $800,000.

Spokesperson Amie Downs said the county’s outreach efforts — phone calls, emails, and presentations at municipal association meetings — cut down on the number of holdouts from 13 to three from March to late September.

“We continue to do outreach and work to engage the remaining three municipalities,” she wrote.

Still remaining as of late September were the city of McKeesport, Plum Borough, and South Fayette Township, Downs and a spokesperson for the state attorney general’s office said.

A spokesperson for South Fayette Township told Spotlight PA and WESA that township commissioners passed a resolution in May to join the settlement with Johnson & Johnson and the drug distributors, there “was no intentional delay,” and the township was working to finalize its participation. On Oct. 16, Downs told Spotlight PA and WESA that the township “has since signed on.”

In Plum, interim manager David Soboslay said council members approved the appropriate resolution and paperwork at their July meeting, and borough officials are “currently contacting the appropriate parties to make sure the Borough’s paperwork was received.”

And in the remaining municipality, McKeesport, an official told Spotlight PA and WESA that their “attorney is looking into this.”

Allegheny County has a public dashboard that allows people to track its expenditures and plans — a feature that’s lacking in many counties. The dashboard shows contract commitments for expanding telehealth to increase access to treatment, mobile interventions, syringe service programs, wrap-around services, and more.

Montgomery County missed out on more than $143,000 from its first payment for not having enough municipal participation, according to information obtained through open records requests and later confirmed by state and county officials. But all of the required municipalities later signed on.

“Some of the municipalities sought approval for signing the agreements from their boards, which required waiting for scheduled meetings,” Megan Alt, a spokesperson for the county, said in an email. “We are glad to now have full participation from eligible municipalities.”

The funding that could have gone to Allegheny and Montgomery counties instead went to the state account overseen by the legislature and governor.