PUERTO RICO’S OPIOID SETTLEMENTS

A Special Production for the 2022 National Harm Reduction Conference

 
 

Ed. Note: The mainland / gringo states have far more Googleable opioid settlement-related documents than does Puerto Rico. (Initiate collective eyeroll at this tale as old as time.) If you have anything to add to the below, email Tips@OpioidSettlementTracker.com.

 
 

What opioid settlements have Puerto Rico reached thus far?

 
 

Puerto Rico announced a $4.3 million settlement with consulting firm McKinsey on February 5, 2021.

PR is also participating in that $26 billion national settlement with “big three” distributors McKesson, AmerisourceBergen, and Cardinal Health and manufacturer Johnson & Johnson. According to The San Juan Daily Star, Puerto Rico’s slice of that $26 billion pie is reportedly “over $100 million.”

  • Statehood. Puerto Rico is a self-governing Caribbean Island, unincorporated U.S. territory, and an official “state” according to the terms of our biggest opioid settlement. (“Puerto Rico is a ‘Settling State’ within the meaning of the Agreement.” Recital 3, “Distributor” Consent Judgment.)

  • Timeline. The consent judgments for the “Distributor” and “Janssen/J&J” settlement were both entered in April 2022. Local coverage of the above-linked consent judgments do not yield insight into the timing of year one payments.

  • PR’s exact percentage of funds.

I know anecdotally that PR is also participating in Purdue’s bankruptcy proceedings (currently held up at the Second Circuit Court of Appeals, see Purdue Pharma) and Mallinckrodt’s bankruptcy proceedings (finally approved), and also has a few cases against the pharmacies. For more, check out my Global Settlement Tracker page.

 
 

How will opioid settlements be spent in Puerto Rico?

 
 

ALLOCATION

As of October 14, 2022, PR has been mum about its intrastate allocation of funds, which raises the rebuttable presumption* that Puerto Rico will be pursuing the default allocation proposed in the Distributor and Janssen settlement agreements:

  • 15% to the state government

  • 15% to localities — Puerto Rico’s municipalities are listed in the Distributor and Janssen agreements’ Exhibit C (“Litigating Subdivisions List”)

  • 70% to an abatement fund, with monies devoted to future opioid remediation

  • However, it is possible that Puerto Rico will announce a non-default allocation here in the coming months. The Advisory Committee described below is tasked among other things to provide recommendations “on how the opioid abatement funds received as a result of opioid litigation settlements and judgments will be allocated and distributed.” Section 1, Administrative Bulletin No. OE-2022-032.

DECISIONMAKING

A 13-member Advisory Committee was established by gubernatorial executive order in June 2022, under Puerto Rico’s Department of Health, to provide recommendations to PR’s DOH Secretary. It “shall organize as soon as practicable following the appointment of its members, but in no event later than June 30, 2022.” Section 1. Administrative Bulletin No. OE-2022-032 (“Executive Order of the Governor of Puerto Rico, Hon. Pedro R. Pierluisi, to Create the Opioid Settlement Remediation Advisory Committee, Which Will Issue Recommendations on the Management and Distribution of Funds to Fight and Reduce the Opioid Crisis in Puerto Rico”).

APPROVED PURPOSES

The Advisory Committee must issue recommendations “consistent with approved uses only.” Section 1, Administrative Bulletin No. OE-2022-032. “All recommendations of the Advisory Committee shall be evidence-based, and may take into consideration federal, state or local initiatives and activities that have been shown to be effective in preventing and treating substance use disorders for individuals and their families or support systems.” Section 2(c).

  • Note: Because Puerto Rico is a Settling State, it is presumably also subject to the Distributor and Janssen agreements’ Exhibit E (the “non-exhaustive” “List of Opioid Remediation Uses”).