TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
SUBJECT:
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National Opioid Settlements
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RECOMMENDATION
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Adopt Resolution No. 24-4769 entitled: A Resolution of the City Council of the City of Murrieta, California, Authorizing the City’s participation in the National Opioid Litigation Settlement Agreements with Kroger Co. and any other future National Opioid Settlements; and
Authorize the City Manager to take all actions necessary to implement the settlement Agreements.
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PRIOR ACTION/VOTE
On December 21, 2021, the City Council adopted Resolution No. 21-4511, authorizing the City of Murrieta to enter into settlement agreements with McKesson Corporation, Cardinal Health, Inc., AmerisourceBergen Corporation, Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutical, Inc.; Agreeing to the terms of the MOU Allocating settlement proceeds; authorizing entry into the MOU with the attorney general; and electing to take direct distribution of its local allocation share. (Vote 5-0).
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
BACKGROUND
In 2021, nationwide settlements were reached to resolve all Opioid litigations brought by states and local governments against the largest pharmaceutical distributors: McKesson, Cardinal Health, and AmerisourceBergen (Distributors), and manufacturer Janssen Pharmaceuticals, Inc. and its parent company Johnson & Johnson (collectively, “J&J”), Teva, Allergan, CVS, Walgreens, Walmart, and Kroger Co. These settlements will provide substantial funds to states and local governments for abatement of the Opioids epidemic across the country.
On December 21, 2021, the City Council authorized settlement agreements with McKesson Corporation, Cardinal Health, Inc., AmerisourceBergen Corporation, Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutical, Inc, and elected to take direct distribution of settlement payments.
In March 2024, 33 settling states, participating political subdivisions, and Kroger Co reached a settlement agreement totaling $1.2 billion, which will be paid out over eleven (11) years. The City of Murrieta (City) is considered a primary Subdivision that is a General-Purpose Government with a population of over 10,000 as defined in the Kroger Settlement Agreement. Allocation of settlement funds to the primary subdivision are set out in the Kroger Settlement Agreement. In order for the City of Murrieta to participate in this national opioid settlement with Kroger Co., the City must execute the Subdivision Participation and Release Form by August 12, 2024.
The settlement payments will allow for a broad range of approved abatement uses by state and local governments. Developed in consultation with the nation’s leading public health experts, the list of pre-approved uses includes a wide range of intervention, treatment, education, and recovery services so that state and local governments can decide what will best serve their communities.
FISCAL IMPACT
There is no fiscal impact associated with this item at this moment. Upon receiving the settlement payment, staff will amend the Operating Budget as part of the Quarterly Budget update to establish the corresponding Revenue and Expenditure budgets. During the May 2, 2023, Proposed Operating Budget workshop for Fiscal Year 2023/24 and 2024/25, City Council directed staff via consensus to allocate funding for Care Solace, for mental health outreach services utilizing opioid settlement funds.
ATTACHMENTS
1. Resolution No. 24-4769