About the Opioid Settlement
North Carolina announced the first $26 billion national settlement agreement with the three largest drug distributors plus the drug maker Johnson & Johnson (J&J) in July 2021. North Carolina state and local governments will receive more than $750 million from this settlement over an 18-year period. Almost two years later, in March 2023, the state announced a second round of five (5) additional settlement agreements with CVS, Walgreens, Teva, and Allergan, collectively called “Wave 2” settlements, totaling $21 billion with over $600 million coming to the state and local governments over the same 18-year term as the first or “Wave 1” settlement funds. A third settlement with Kroger Co. was announced in July 2024. This settlement is worth $1.2 billion with state and local governments receiving $40.2 million over the settlement period.
Frequently Asked Questions
Disbursement of the settlement funds is directed by the North Carolina Memorandum of Agreement (NC MOA) between the state and local Governments. To maximize funds flowing to North Carolina communities on the front lines of the opioid epidemic, the MOA allocates 85% of settlement funds to NC’s 100 counties and 17 municipalities, with the state retaining 15 percent of funds. Guilford County signed on to this MOA in June 2021 when the first wave of settlement agreements was being finalized, and the MOA continues to apply to the following waves of settlement agreements.
The NC MOA outlines how Opioid Settlement Funds are distributed to local governments including counties. Under the terms of the MOA, Guilford County is allocated 3.375% of North Carolina’s portion of the settlement. As of August 2024, this share is expected to result in up to $40.75 million coming to the county over the 18-year payment period. In accordance with the terms of the NC MOA, the county has created and is utilizing a special revenue fund to receive, track, and spend these funds separately from other county monies and in a manner that makes monitoring, reporting, and auditing easier to accomplish.
The NC MOA establishes the process for who, when, and on what local governments may use Opioid Settlement funds.
First, who authorizes the use of settlement funds: Opioid Settlement funds can only be used when the county’s Board of Commissioners specifically approves their use for a specific activity by passing a spending authorization. Once spending of these funds is authorized, staff will carry out the activities under the county’s general financial, purchasing, and operational guidelines.
Second, when can they be spent: the spending authorizations that the Board of Commissioners approves for the spending of Opioid Settlement funds includes a specific time period in which the funds may be used, a description of the activity or project to be done with the settlement funds, and the agency or organization that will do the activity or project. Funds may only be spent during the authorized time period, for the authorized purposes, and as long as the budget appropriation is effective. Any funds remaining at the end of the time period will “expire” and a new spending authorization is needed to spend them again. In addition to a spending authorization, Opioid Settlement funds must also be appropriated through the county’s budget process like any other county funds and the budget appropriation of the funds must also be maintained and/or funds reappropriated for them to be spent.
Finally, what can they be spent on: Opioid Settlement funds may be used to support programs or services listed in the NC MOA under Exhibits or “Options” A and B that serve persons with Opioid Use Disorder (OUD) or any co-occurring Substance Use Disorder (SUD) or mental health condition.
- Option A focuses on “High-Impact Opioid Abatement Strategies” that are more defined, evidence-based strategies that can provide a higher impact. No strategic planning or other preparatory work is required prior to a county or local government authorizing any activities that are listed under this option, though Option A does allow funds to be used for strategic and/or collective community planning work.
- Option B includes “Additional Opioid Remediation Activities” including more complex variations or combinations of Option A strategies. Specific Option B categories include Treatment including support for impacted family members and justice-involved individuals; Prevention of over-prescribing and overdoses; and Other Strategies including education and training, community coordination and leadership, training, and research or analysis. To spend settlement funds on Option B strategies, a local government must first complete a collaborative strategic planning process as outlined in MOA Exhibit C, assemble a list of recommended activities, and present that list to its governing board for approval.
Regardless of the which option is selected, the spending authorization process must still be completed as well before any funds are actually spent.
The Guilford County Board of Commissioners engaged in a collaborative strategic planning process, that included partnering with the community, to select and implement Option B strategies. The Board chose this route to ensure that all parties would have an understanding of opioid recovery and prevention-related needs in the community; are able to select and implement appropriate activities to meet these needs; and generally, have more flexibility to use settlement funds to address issues with opioid misuse in the community.
To help facilitate this work, the Board also created a drug and injury prevention manager position to help organize and coordinate both the strategic planning process and to do ongoing engagement with the community.