Michigan House OKs $776M opioid settlement plan as critics hit exclusion of small towns

Beth LeBlanc
The Detroit News

A three-bill package creating a framework for the distribution of about $776 million in opioid settlement funds in Michigan garnered widespread support as the state House approved it Thursday. 

But several Republicans in more rural areas criticized the settlement's lack of money for "small town America," specifically communities with fewer than 10,000 people. 

Rep. Jeff Yaroch, R-Richmond, criticized Attorney General Dana Nessel from the House floor Thursday for failing to secure funding for all small communities. Yaroch said he had to tell the Memphis mayor pro-tem recently he wouldn't get a direct payment from the settlement because the community's population falls below the 10,000-person threshold.

"I had to explain to him that because he's got a community of a thousand their lives don't matter to our attorney general; otherwise, we would do something for them," Yaroch said. "Those people are suffering as much as big-town America."

The bills, which passed the House Thursday 89-10, 86-13 and 95-4, move to the Senate next for approval. 

Nessel's office said the 10,000-person threshold was a stipulation of the nationwide $26 billion settlement with the country's larger pharmaceutical distributors and manufacturer: Johnson & Johnson, Cardinal, McKesson and AmerisourceBergen.  

Some communities with fewer than 10,000 resident who participated in the litigation will receive direct payments from the settlement, said Amber McCann, a spokeswoman for Nessel's office. There are no direct payments for small communities that didn't participate in the litigation, but McCann argued they could receive money from the state's allotment. 

"All local governments can potentially benefit from the state’s allocation of settlement dollars" through the appropriations process, McCann said.

The $776 million settlement was released by the companies earlier this month and is scheduled to hit local and state governments in the second or third quarter of the year. The state expects this year to receive two initial payments of the 18-year payout, according to a House Fiscal Agency analysis.

The House-passed legislation would create a fund within the state Department of Treasury for the distribution of the opioid funds, and require Republican and Democratic legislative leaders to appoint a council to review programs using the funding and make recommendations on funding to the Legislature.

The settlement is the largest multistate agreement since the Tobacco Master Settlement Agreement in 1998. 

About half of Michigan's settlement will go to the state and the other half will go to 269 Michigan communities. The money is meant to be spent on efforts to combat the opioid epidemic, including treatment, recovery, support, criminal justice initiatives, prevention and help for addicted pregnant women. 

The money will supplement roughly $19.5 million the state has already received from McKinsey & Co. in a 2019 settlement over a suit challenging the company's help in promoting the drugs. 

Michigan's two other opiate cases — a large federal case against Purdue Pharma and one in Wayne County against Walgreens — are ongoing.