Indiana cities, towns, counties have not received opioid settlement funds, attorney says

The state of Indiana and all of its cities, towns and counties are set to receive up to $507 million as part of a massive settlement from lawsuits against drug manufacturer Johnson & Johnson and national distributors Cardinal Health, McKesson and AmerisourceBergen for their roles in the opioid crisis.

The funds will help Indiana communities fight the drug crisis, bolster law enforcement and task forces and fund treatment and other programs, Indiana Attorney General Todd Rokita said in a February announcement calling the settlement a "huge win" for the state.

Rokita, whose office is in charge of distributing the payments, also said localities would begin receiving portions of the funds in the second quarter of this year.

But nine months later, Indiana communities have yet to receive a penny, said Irwin Levin, who represents dozens of these cities and counties. Nearly 650 localities in the state were supposed to receive portions of their settlement earlier this year.

Levin said state officials have yet to provide an explanation for the delay or a timeline for when the payments will be made. Conversations with representatives from Rokita's office and the Indiana State Budget Agency have only led to fingerpointing over who or what's causing the delay, he said.

"There's no greater battle local governments are fighting than the effort to abate opioid issues in our community … Every day that these funds are withheld is another day that people will die from this plague," said Levin, a managing partner at Cohen & Malad.

Katlyn Milligan, a spokeswoman for the attorney general's office, said the funds are currently deposited in the Agency Settlement Fund, which is under the control of the Indiana State Budget Agency. The state received the final payment from the first round of settlement funds on Nov. 4.

"As soon as the portion of the funds that are to be distributed to the cities, towns and counties are released to the Office of Attorney General we will proceed to immediately distribute them to local units," Milligan said.

The State Budget Agency did not respond to a request for comment Monday. Gov. Eric Holcomb's office referred questions to the attorney general.

More:AG: All Indiana communities will participate in state's $507M opioid settlement

The drug companies agreed to pay $26 billion to settle allegations from states and localities that they fueled the deadly opioid crisis. The funds will be distributed over 18 years, starting this year.

In Indiana, 70% percent of the funds ― half goes to the state and the other half to local governments ― is designated for opioid abatement efforts. The other 30 percent, also split evenly, can be spent however state and local officials choose.

Levin said his clients, which include Indianapolis and West Lafayette, as well as Marion, St. Joseph, Vanderburgh and Howard counties, represent more than half of the state's population ― and none have received their portions of the settlement.

The state has received more than $100 million from the drug companies that was supposed to help fund community efforts against the opioid crisis but "remains buried in State coffers," according to a copy of an email obtained by IndyStar. The email, which demanded immediate distribution to localities, was sent by Levin last week to Lori Torres, Rokita's chief deputy and chief of staff.

Torres also did not respond to a request for comment.

The email references a meeting Wednesday between the State Budget Agency and Rokita's office. Levin told Torres representatives of the cities and counties should be included in that meeting, and he hopes it will result in an immediate distribution of the funds to local governments.

Otherwise, he wrote, "we can imagine no alternative other than to seek the appropriate legal remedy compelling the state to fulfill its statutory obligations to distribute these funds."

In Howard County, where officials expected to receive payments earlier this fall, the funds are earmarked for local organizations that directly help people suffering from opioid addiction, said County Commissioner Paul Wyman.

The county is supposed to receive $5 million over 18 years. Wyman said officials expected to receive about $800,000 around September or October and the remainder in increments over the next 17 years. But the state has not provided an explanation as to why the payments have been delayed, he said.

"The reality is we would love to get these dollars deployed to our community because at the end of the day, these dollars are going to save lives," Wyman said. "The sooner we receive them, the more services can be provided and more people can be helped."

One such local organization that will benefit from the payments is Turning Point, which was started after Howard County saw a record number of overdose deaths in 2017. The group provides wrap-around programs, including detox services and peer coaching.

In his February press release announcing the final approval of the settlement, Rokita criticized large cities for initially opting out of the settlement and took a swipe at private attorneys he accused of trying to secure bigger paydays for themselves. Those 80 cities dropped out because it would have prevented them from pursuing other pending lawsuits and because of an old distribution formula that would've awarded 15% of the settlement directly to local governments, and the rest would have been funneled through the Family Social Services Administration for distribution.

More:$500M opioid settlement jeopardized by localities opting out to pursue their own cases

Levin, who represents many of those cities, told IndyStar earlier this year that local governments "are the front lines in the fight against opioids."

In March, Holcomb signed into law a bill that allowed local governments to pursue their own litigation against drug companies while also sharing in the consolidated award. House Enrolled Act 1193 created a 50-50 split of the settlement funds between state and local governments.

Last summer, Rokita announced that all of Indiana's localities have agreed to join the settlement.

Drug overdose deaths began rising in Indiana in 1999, with thousands of Hoosiers dying over the last two decades and the state having among the highest drug overdose death rates in the country. In 2017, more than 1,800 ― about five people a day ― died from drug overdose largely driven by opioids, according to a report from the Indiana State Department of Health. That year, Indiana had the 14th highest drug overdose death rate in the country.

IndyStar reporters John Tuohy, Johnny Magdaleno and Jake Allen contributed to this story.

Contact IndyStar reporter Kristine Phillips at (317) 444-3026 or at kphillips@indystar.com. Follow her on Twitter: @bykristinep.

This article originally appeared on Indianapolis Star: Indiana opioid settlement: Cities, counties have yet to receive funds