The Maryland Attorney General’s Office has backed off an earlier proposal to evenly split the state’s share of an upcoming $1.2 billion opioid settlement with the grocery chain Kroger.
The state’s top prosecutor is now proposing to split the money 70/30, with the majority going to local subdivisions such as county governments. The agreement would incorporate “the same intrastate allocation as in prior settlements,” according to an Aug. 23 letter from the office.
The state’s share of the $1.2 billion Kroger settlement with state and local governments over 11 years is small. It’s being divided among 33 states and Maryland is getting $13 million, reflecting the grocer’s small footprint in the state, mostly about 18 Harris Teeter stores.
The Attorney General’s Office did not comment on the proposed allocation plan, but said in a statement that “100% of the money from the Kroger settlement will be used for opioid-related measures throughout Maryland.”
Previous opioid settlements to Maryland have used a 70/30 split, with 70% of the funds going to local subdivisions and 30% staying with the state. Some of the total goes directly to the state and local governments, while 60% is allocated to a Targeted Abatement Fund that is distributed through a state-run grant program. The majority of those grants must go to local governments.
Maryland joined a nationwide settlement with Johnson & Johnson and three major opioid distributors, McKesson, AmeriSourceBergen, and Cardinal Health, two years ago, though Baltimore City has chosen to go it alone against those firms. The $26 billion global settlement will pay out nearly $400 million to Maryland over 18 years. The state won another $12 million as part of a settlement with the global consulting firm McKinsey & Company for its role in developing opioid marketing plans.
Other states are distributing their opioid settlement money differently. Some split the money evenly between state and local governments, while others keep most of the money at the state level. The national Kroger settlement proposes a default 50/50 split, but that’s not required as part of the deal.
Michael Sanderson, the executive director of the Maryland Association of Counties, said the AG’s office may seek different allocations in settlements that involve smaller opioid companies without a statewide impact.
“But there’s now a consensus that this Kroger settlement remained in the category of statewide, with a statewide footprint,” he said.
Counties and local governments have until Sept. 11 to sign on to the Kroger settlement.
States and local governments are set to receive millions of dollars nationwide as pharmaceutical companies settle lawsuits over their marketing and distribution of addictive opioid painkillers. Allocating the money has generated controversy. Some states have put it toward law enforcement, while some advocacy groups say it should only go to public health measures.
Local governments have argued they need the money because they bear the brunt of opioid-related expenses, such as handling emergency calls for overdoses.
Baltimore City rolled out a plan for managing its separate settlement money last week. The city’s ongoing lawsuit against the opioid companies that have not settled is set to go to trial later this month. The city already has received more than $240 million through settlements with drug companies — most recently $152.5 million from the drug distributor Cardinal Health.
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