Iowa Senate lawmakers advance spending from state opioid settlements

The state has $26.8 million in settlement funds, and it’s expected to receive around $144 million over the next several years

Iowa lawmakers are beginning the process of spending millions of dollars obtained in lawsuits against companies over their role in the opioid epidemic.

Under Senate Study Bill 3178, advancing in the Iowa Senate, three-quarters of the money in the state’s Opioid Settlement Fund would be directed to the state Health and Human Services Department. The remaining money would go to the Attorney General’s Office.

Iowa has $26.8 million in the fund from settlements from cases against major opioid manufacturers and retailers, according to the state treasurer’s office. The bill would split that money this year, giving 75 percent to the HHS Department and 25 percent to the Attorney General’s Office.

The money can be used to pay for opioid addiction treatment, prevention and training for law enforcement and first responders. It can be used for alternative courts and pre-arrest diversion programs.

The state is expected to receive around $144 million over the next several years, according to Senate Republican estimates. Half of that money is allocated to the state while the other half goes to local governments.

Going forward, the HHS department would receive an estimated $3 million a year, while the Attorney General’s Office would receive $1 million until 2039.

Iowa, along with most other states, has received settlements from Johnson & Johnson, Teva, CVS and Walgreens, among other companies. While the companies did not admit wrongdoing, the lawsuits alleged they deceptively marketed the addictive pharmaceuticals and did not follow precautions to prevent abuse.

Former Iowa Attorney General Tom Miller in 2021 announced his office would spend $3.8 million in settlement funds on a partnership with University of Iowa Health Care on a medication-assisted therapy program for addiction treatment.

Senate Republicans advanced the bill out of a subcommittee on Monday, making it eligible for debate in the full Appropriations Committee.

Which proposal should Iowa follow?

By directing the opioid settlement funds to the two departments, the Senate bill would give them broad leeway on how to spend the money, as long as they follow the requirements of the various master settlements.

Iowa Gov. Kim Reynolds has proposed a separate bill in the House that would instead fund specific programs using $20 million from the settlement fund. House Study Bill 689 would include spending on following projects:

Some representatives for health care organizations said during the Senate subcommittee meeting they preferred Reynolds’ bill over allowing state agencies authority to spend the money.

“Our members are a little bit nervous about not having any specificity within the language of the bill about what, specifically, those programs will be funded,” said Amy Campbell, a lobbyist for the Iowa Behavioral Health Association.

Sen. Janet Petersen, a Democrat from Des Moines, said she wanted to know how the attorney general’s portion of the funds would be spent.

“I have concerns about the framework, only just specifying percentage and then there’s no breakdown on how the funds will be used from the AG’s perspective, as well as HHS,” she said.

A spokesperson for Iowa Attorney General Brenna Bird said she is “committed to combating the opioid crisis and saving lives by directing opioid settlement funds toward treatment, recovery, and prevention efforts across Iowa.”

Sen. Mark Costello, R-Imogene, who led the subcommittee, said he thinks the agencies, which are already doing work in addiction treatment, would have the best understanding of how to spend the money.

“I’m fairly comfortable unless something makes me change my mind that, if we give it to these departments they’ll be able to do what we’d like, within the scope of the project and for things that they deem effective,” he said.

Reynolds has also proposed a bill that would reorganize Iowa’s mental health and substance abuse treatment networks in the state into a unified behavioral health system. The bill — House Study Bill 653 — would create seven regional agencies in the state that provide behavioral health treatment and services.

By Caleb McCullough, Gazette-Lee Des Moines Bureau

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