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'Blood money' from opioid settlement diverted from fighting addiction, advocates say

'Blood money' from opioid settlement diverted from fighting addiction, advocates say

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A diversion of millions of dollars from an opioid settlement into New York State's general budgetary fund has angered some legislators and drug counselors who believe the money should be reserved solely to fight opioid addiction.

"All that money is blood money," said Avi Israel, founder and president of Save the Michaels of the World, the drug treatment program named for his son, who died by suicide in 2014 after he could not get into a treatment facility. "That money is coming to the state on the backs of people who died from opiates. It should go to the people who need it the most  the people suffering from addiction and mental heath."

In February, New York State Attorney General Letitia James announced the state would receive $32 million in settlement money to combat the opioid crisis. The funds were coming from a $573 million settlement between 47 state attorneys general and McKinsey & Company, a consulting firm that helped "turbocharge" opioid sales for its clients, including Purdue Pharma.

"The funds from today's agreement  more than $32 million of which will go to New York State  will be used toward abating the effects of excessive opioid use in the participating states," according to a statement from her office at the time.

But that's not what happened. During budget negotiations, nearly two-thirds of the money went into the state's general fund. The other $11 million went to pay for medication-assisted treatment in state prisons at the same level as the previous year.

While the settlement James helped negotiate stipulated that the funds must be used "to the extent practicable" to address the opioid epidemic, a provision in New York State law prevents a state agency or official from determining how money acquired through a settlement can be allocated. 

State Sen. Peter Harckham, chairman of the Committee on Alcoholism and Substance Abuse, said he is working with the attorney general to make sure such a diversion doesn't happen again. Considerably larger settlements are expected with opioid manufacturers and distributors.

"We are working with the attorney general right now to pass legislation to create a lockbox that all opioid settlements would come into," said Harckham, a Westchester County Democrat.

The bill they are working on would put in place an advisory board of family members, treatment providers and other stakeholders to ensure that 100% of the funds would be used for prevention, treatment, recovery and harm reduction, Harckham said.

He said James was not at fault for what happened.

"This is not on her," Harckham said. "She's doing an amazing job on this. Unfortunately, you can't win every budget fight, but this is one that never should have been."

Harckham said people who have lost loved ones to addiction need to know these funds will be used to prevent others in the future from suffering a similar fate.

"We need to say to folks that your loss will not be in vain, and that the future settlement fund will save lives," Harckham said.

Ann Constantino, CEO of Horizon Health Services, also hopes future opioid settlement money will be set aside to combat drug abuse and support recovery.

"I'm disappointed that our system is continually last on the list, and we're the ones who are on the front lines with families and with people who are suffering," Constantino said.

John Coppola said he watched tobacco settlement funds from 20 years ago "squandered," and he fears the same is happening again to money dedicated to fight the opioid crisis.

"The impact of the problems caused by this crisis are unimaginable for families and people dealing with addiction," said Coppola, executive director for the New York Association of Alcoholism and Substance Abuse Providers, based in Albany.

"It's unconscionable that we could not take advantage of these funds to address this problem," he said.

Erie County experienced a 50% increase in opioid overdoses in 2020, according to the Erie County Department of Health.

Mark Sommer covers preservation, development, the waterfront, culture and more. He's also a former arts editor at The News. 

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Struggling with his addiction to prescription drugs, Michael Israel called a medical counselor in June, desperately seeking help. The message back: No available beds, and no recommendations for what to do. So the 20-year-old Israel, who the counselor was aware had attempted suicide 2 1/2 weeks earlier, handed the phone to his father, locked himself in his parents’ room

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