By Aneri Pattani, KFF Health News
Companies accused of recklessly marketing and distributing prescription opioid painkillers are paying roughly $58 billion to settle lawsuits over their role in fueling the addiction crisis. It’s a pot of gold eyed by addiction treatment providers, companies creating the latest opioid-related products, and government officials struggling to balance budgets.
Nearly half of that money is going to local governments, to be distributed by county commissioners and city councilors. The idea is that local leaders know their communities best and can do justice to these payouts, often described as “blood money” by people who’ve lost loved ones to an overdose.
But many local leaders have little to no training in addiction policy and may lack robust local health departments and policy guardrails to assist them.
That has resulted in spending decisions that many clinicians, researchers, and addiction recovery advocates say are unlikely to save lives or treat substance use disorders.
In New York, where about 46% of the opioid settlement money is directly controlled by local governments, counties have spent tens of thousands of dollars on surveillance cameras, technology to help police access data on locked cellphones, and goggles that simulate being drunk, according to public records obtained by the nonprofit advocacy group Legal Action Center and shared exclusively with KFF Health News. Though the purchases were likely legal, many people consider them a slap in the face because they don’t directly help people struggling with addiction or their families.
Without oversight, counties have the chance “to go rogue” with this money, said Jasmine Budnella, director of drug policy at VOCAL-NY, an advocacy organization that is tracking settlement money as part of its mission to serve people affected by the war on drugs.
When advocates and families of overdose victims raise concerns to the various state agencies that could hold localities accountable, those agencies often punt to one another, Budnella and other local advocates said.
It feels “like the Spider-Man meme, where it’s like everybody’s pointing at each other,” Budnella said. “Somebody needs to be able to have the stick and slam their hand on the table and be like, ‘You’re doing this wrong and this is the consequence.'”
The experience in New York provides a microcosm of regulators evading oversight responsibility nationwide while varied interests vie for the financial windfall.
Years of data collected by KFF Health News, the Johns Hopkins Bloomberg School of Public Health, and the addiction nonprofit Shatterproof have found that settlement money was spent on law enforcement gear, such as night-vision goggles and bulletproof vests; unproven prevention initiatives, such as a drug-awareness magician for kids; and budget stopgaps.
It’s unclear who should — or will — take action on such expenditures that many people harmed by the crisis consider questionable.
In each state, control of the money is split among various entities, creating a leadership vacuum. The federal government plays little to no role. Advocates and families who’ve lost loved ones have pushed for accountability but have limited power. A few states have passed new laws, but change is slow and uneven.
The settlement agreements require the majority of the money to be spent on “opioid remediation,” with more than 100 suggested expenditures. But the list is broad and open to interpretation. Further complicating the issue, many states — including New York — designate some portion of the settlement dollars as unrestricted, which allows for general spending.
Meanwhile, federal budget cuts have threatened addiction-related services and created more demand for funding. And though overdose deaths have decreased since peaking in 2022, they still claim about 186 lives per day.
“We really are wasting this opportunity to use these funds to turn the epidemic around,” said Alexis Pleus, a Binghamton, New York, resident, whose 28-year-old son, Jeff Dugon, died of a heroin overdose in 2014.
He was a chef who loved to rib Pleus about her bad knife skills. She thinks of him and smiles every time she peels garlic the way he taught her. If the money could spare other families such heartache, that would give her solace.
“We need oversight,” said Pleus, who runs a nonprofit that is receiving opioid settlement cash from her county to serve people who use drugs and provide support groups for families.
In New York, there are three prime watchdog contenders: the Office of Addiction Services and Supports, the attorney general, and the comptroller.
The Lead State Agency
New York’s opioid settlement documents designate the Office of Addiction Services and Supports as the “lead state agency.”
It distributes a portion of settlement dollars via grants, according to recommendations from the state’s Opioid Settlement Fund Advisory Board. It also has the power to “engage in oversight and audits of projects and programs” funded by settlement cash and “may withhold future funds” from local governments that do not comply with certain requirements, according to the agreement.
Agency spokesperson Jerry Gretzinger told KFF Health News the office has not yet exercised its power to withhold funds but understands its oversight role.
“OASAS has a duty to ensure these funds are used responsibly and strategically to build programs that will have a lasting impact in reversing this crisis,” Gretzinger wrote in a statement.
The office is currently auditing 19 local governments’ use of the money to ensure compliance with “reporting and recordkeeping requirements,” he said. However, that may not encompass the broader question of whether money was spent on appropriate uses, which many advocates want addressed.
Some people are frustrated with the narrow role OASAS has carved out.
For example, language included in last year’s state budget required local governments for the first time to publicly report how they spent settlement money. OASAS collected links to those reports on its site. But it does not review the accuracy or detail of that data, instead relying on “the information as it is provided” by localities, Gretzinger said.
“That doesn’t feel like oversight,” said Christine Khaikin, a deputy director at the Legal Action Center, which obtained public records about local spending in New York.
Members of the state’s Opioid Settlement Fund Advisory Board have also pushed the office to provide more data and evaluation of how dollars are being used. But at a February 2025 meeting, OASAS Commissioner Chinazo Cunningham deflected.
“OASAS has no oversight over these portions of dollars,” she said of the 46% of settlement money that goes directly to counties and cities. “In terms of what kind of data each county collects,” she added, “we cannot dictate exactly what that information is.”
The Top Law Enforcement Officer
New York Attorney General Letitia James has been one of the leading national voices on prosecuting pharmaceutical companies that fueled the overdose crisis. Her office has issued dozens of press releases on the topic, touting her role in securing billions of opioid settlement dollars for the state.
But when asked about the attorney general’s role in ensuring this windfall is spent appropriately, her office passed the buck to other agencies.
“While our partners in state and local governments distribute and oversee these funds, we will continue our work to hold accountable the companies responsible for fueling the spread of addictions and overdoses,” spokesperson Grant Fox wrote in a statement.
That stance contrasts starkly with many people’s views of the office’s responsibility.
A state senator, a member of the opioid settlement advisory board, and several advocates named the attorney general’s office as a key enforcement entity.
“The money is here because of their efforts,” said Democratic state Sen. Nathalia Fernandez, who chairs the committee on alcoholism and substance use disorders and has introduced several pieces of legislation related to settlement funds. “I believe it is under the Office of the Attorney General to enforce.”
Budnella, the advocate with VOCAL-NY, agreed, saying, “It would be a shame for all of their work that they have done to secure all this funding for it to be misspent.”
Attorneys general in Michigan and Kansas have taken more active roles, issuing lists of ways opioid settlement money cannot be spent. The lists include many law enforcement expenditures that have raised concerns for advocates in New York.
James’ office did not respond to a specific question about whether she’d consider creating a similar list.
The Fiscal Watchdog
Some people have suggested that the state comptroller, as a steward of New York’s finances, could play an oversight role, perhaps by conducting or requiring audits.
Early this year, the Reason Foundation, a libertarian think tank, released a model law that would create audit requirements for organizations receiving settlement cash. The blueprint suggests recipients of more than $1 million in opioid settlements be required to undergo an independent review of financial statements and transaction testing to determine whether funds were used for their intended purpose. Smaller grantees, receiving less than $1 million, could simply provide an unaudited accounting of the funds.
It’s “not telling states what is and what isn’t an appropriate use,” said Mariana Trujillo, a co-author of the Reason Foundation plan. “We’re simply trying to ensure recipients follow through with their promises.”
No state has adopted the model law yet. But the office of New York Comptroller Thomas DiNapoli told KFF Health News it is already conducting an audit.
The process, which began in February, “is looking at OASAS’ oversight” of the opioid settlement money, said spokesperson Mary Mueller. It includes settlement money controlled by the state and local governments.
Mueller said any future enforcement action “will depend on the results of our current work and our ongoing monitoring.”
The office is following in the footsteps of comptrollers and auditors in New Jersey, Missouri, and Nashville, Tennessee, who have taken action on settlement cash.
These initial steps have given some advocates and researchers hope for the future of opioid settlement dollars, which are expected to flow for more than a decade.
“We’re already years in and we’ve seen the craziest stories” of this money funding concerts and a police shooting range, said Layal Bou Harfouch, a co-author of the Reason Foundation’s model law. “If we can prevent that at least a little and have these funds be a bit more focused, I don’t think it’s too late.”
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism.
This article originally appeared on KFF Health News and is republished here under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF Health News.