Quick Take:
The recent Supreme Court decision that invalidated a deal with Purdue Pharma and its owners, the Sackler family will not impact the approximately $26 million the county is set to receive over the next 18 years. Community organizations combating the opioid crisis have until July 10 to submit applications to the county for funding.
The $26 million expected to funnel into Santa Cruz County over the next 15-18 years from civil suits against opioid distributors and pharmacies won’t be impacted by last week’s U.S. Supreme Court decision that upended a multi-billion-dollar settlement with Purdue Pharma, county officials said.
In a narrow 5-4 ruling that did not fall along the typical political lines, the U.S. Supreme Court ruling invalidated a deal with OxyContin manufacturer Purdue Pharma and its owners, the Sackler family. That agreement would compensate individual victims, tribes and government agencies $6 billion over 18 years. That payment derives from Purdue’s role in the deadly opioid crisis that has killed more than 560,000 Americans since 1999.
Santa Cruz County is party to active litigation against Purdue Pharma for the opioid crisis, and thus would have likely brought home a slice, albeit small, of that $6 billion.
However, county health spokesperson Sandra Hughes said that potential payoff is entirely separate from, and will not impact, the approximately $26 million the county is set to receive from nine other opioid distributors and pharmacies over the next 15 to 18 years — money it is just about to begin spending.
In fact, the county has set a July 10 deadline for local human services organizations and contractors to apply for a slice of the first $810,000 of opioid settlement dollars. It is the first major movement of opioid dollars into the community since the county board of supervisors in March approved a two-year pilot spending plan.
The Supreme Court’s ruling primarily took aim at the Sackler family, who had worked out a deal that would dissolve Purdue Pharma into bankruptcy and send $6 billion to victims and communities impacted by the opioid crisis. The deal shielded individual members of the Sackler family from future lawsuits. The court’s majority said members of the Sackler family should not so easily escape liability, and that their billions of dollars in assets should be on the table in settling future civil claims against them.
Hughes confirmed that the county is part of active litigation against Purdue Pharma. According to county documents, the county did at one point have a complaint that named individual members of the Sackler family. However, the county did not confirm whether those complaints were still active.
“We’d like to reiterate that resolution of the ongoing litigation against Purdue and the Sacklers is very complex and will take many years of further proceedings,” Hughes wrote in an email. “We don’t have any further comments on the matter”
How much of the now-in-limbo $6 billion was at stake for the county is unclear. For context, the county received $26 million, or roughly 0.06%, out of a total $44.7 billion nationwide settlement with nine opioid distributors and manufacturers.
The county will receive $15 million over 18 years from distributors McKesson, Cardinal Health, AmerisourceBergen, and Johnson & Johnson; and another $11 million over 15 years from CVS, Walgreens, Walmart, Teva and Allergan. Separately, the county also expected to receive $507,000 over eight years from last year’s $1.1 billion nationwide settlement with Mallinckrodt Pharmaceuticals.
Deadline approaching for funding applications
Given that the $26 million that the county is set to receive over the next 18 years is not affected by the high court’s decision, the county is still moving forward with its plan to distribute the amount it has already received — about $3.2 million. Of that, 33% will go toward community-based organizations and contractors for treatment expansion and to support new practices. Another 25% will go to the county’s public health department to increase services to prevent people from falling into addiction in the first place, and 25% will go toward county capital projects — long-term, large-scale projects that often involve building or maintaining infrastructure and upgrading or replacing facilities. The final 17% will go toward data collection, grant management, and other administrative costs.
Since May 14, local organizations have begun drafting project proposals to apply for a piece of the initial $810,000 the county will disburse into the community. Any organizations interested in applying have until 11:59 p.m. on July 10 to send in their pitches. The county will announce funding decisions and issue grant payments in August, and organizations that receive funding have until June 30, 2026 to spend it.
Local organizations are eagerly awaiting funding announcements. SafeRx Lead Physician Jen Hastings said that the substance use safety coalition is applying to the program, and if successful, intends to significantly expand on the work it already does.
One of the organization’s main priorities is youth harm reduction, and funding would go towards strengthening ties with the County Office of Education to teach educators, nurses, and families about fentanyl, increasing medication treatment for youth and access to narcan, and focusing on perinatal harm reduction.
Hastings added that the coalition also hopes to sustain its medication assisted treatment (MAT) advisory group — a peer support and resource group comprised of physicians, behavioral health providers, and advanced practice clinicians dedicated to improving local opioid use disorder recovery efforts.
Hastings said that SafeRx has received public funding from the county in the past, but future money is unlikely given the county’s financial difficulties. Hastings hopes that this can at least be a good start.
“Every little bit helps, but in the long run, it’s not a lot of money,” said Hastings.
Hastings also said that securing funding is always “frustrating.” SafeRx has received money from the state department of health to combat the local fentanyl crisis, but has not often succeeded in winning federal funding, likely due to Santa Cruz County’s relatively small size. That makes local funding all the more important.
“We’re hopeful that the county will value the work we do, and that we get the funds we’re asking for,” she said.