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Local Governments Share in National Opioid Settlement

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By Christopher South

LOWER TOWNSHIP – The township has received about $7,000 as part of a $26 billion National Opioid Settlement, along with varying amounts for other area governments.
The settlement was part of a class action suit that held the pharmaceutical supply chain responsible for its “conduct and its harmful consequences,” as stated in the Memorandum of Agreement between the State of New Jersey and Local Governments on Opioid Litigation Recoveries. The state government will receive 50% of the amount awarded to New Jersey, with the other half being paid directly to the participating municipalities. 
In March, Gov. Phil Murphy announced that New Jersey would receive $641 million from settlements with opioid manufacturers and distributors. Only 262 towns across the state chose to opt-in on opioid litigation resolutions; five of them are in Cape May County. 
The awards are the result of a settlement agreed upon by a plaintiffs’ committee of four states’ attorneys general and four defendants. A suit was filed against three of the largest pharmaceutical distributors, McKesson, Cardinal Health and AmerisourceBergen. Also named was manufacturer Janssen Pharmaceuticals and its parent company Johnson & Johnson, commonly known as J&J.  
A percentage of the award is given to municipalities having a population of at least 10,000 people. The percentage figures go up as the population number increases. In addition, municipalities had to apply to receive a share of the settlement.  
“We are getting a piece of that. We applied and there is a ton of paperwork involved,” Lower Township Manager Mike Laffey said. 
Cape May County is receiving the largest share at $128,996 or about 1.28% of the total. The next largest share goes to Ocean City, receiving $19,189, followed by Lower Township with $7,135, Middle Township with $6,982 and Upper Township with $1,747.
Laffey said his understanding was that the township would receive payments over multiple years. The settlement website indicates that the drug distributors are to make annual payments. According to the 2021 settlement, J&J’s portion will be front-loaded, with about 80 percent being made in the first three years and the rest over the following six years. Collectively, the distributors’ payments will be spread out over 18 years. 
According to the settlement website, there is a broad but not exhaustive list of approved purposes for the funds, with at least 70% of the funds to be used to fund future opioid-remediation efforts.  
Laffey said he believes the easiest way to use the funding is for preventative efforts. 
“The award would offset the cost of Narcan and also go to outreach. Prevention is the way to go,” Laffey said. 
Cape May County spokesperson Diane Wieland said Health and Human Services Department Director Pat Devaney told her the county received the money in a trust. As opposed to grants, there is no time limit for spending the funds. Wieland said the funds won’t be disbursed until 2023. 
“We are very thrilled to get this money,” Wieland said. “The county will have to go through an RFP (request for proposal) process, where agencies in the county will apply for funding.” 
Wieland said the county is working on a plan based on the guidelines contained in 13 pages of documents that came along with the funding. She said the county will announce when agencies, including nonprofits, may apply for the funds and how much will be available.
Thoughts on the opioid settlement? Email csouth@cmcherald.com or call him at 609-886-8600 ext. 128.

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