Millions coming to Pee Dee, Horry County, Myrtle Beach from major opioid lawsuit settlement

The counties and cities in the Pee Dee are set to receive millions of dollars each from the settlement of a national class action lawsuit against companies that manufactured and distributed opioids.

The settlement agreements total $26 billion — with $21 billion coming from opioid distributors and $4.5 billion coming from the manufacturer Janssen, a branch of Johnson & Johnson — and will be split up among the 50 states, U.S. territories and the thousands of counties and municipalities part of the lawsuit. The settlement was negotiated over the past several years by attorneys general from South Carolina and the other states.

Of the total, South Carolina could see around a $400 million total settlement, though a significant portion will go toward attorneys fees at the state, county and local levels. The settlement agreement stipulates that the money has to be spent on “approved abatements” of the opioid epidemic, which has been raging in the United States since the 1990s. Such abatements include purchasing Naloxone, which can reverse opioid overdoses, as well as addiction treatment programs and other law enforcement expenses

South Carolina could see about $234 million go towards such abatements, according to the proposed settlement agreement that cities and counties across the state voted to approve this week.

In the Pee Dee region, settlement amounts range from the hundreds of thousands for Georgetown to more than $10 million for Horry County. Myrtle Beach, according to spokesperson Mark Kruea, could see up to $4.3 million. Dillon County, according to county administrator W. Clay Young, could see more than $1 million.

The opioid crisis hit Horry County and the Pee Dee region hard, as it did other parts of the country. In its initial 2018 lawsuit against AmerisourceBergen, Horry County alleged the crisis led to an “opioid prescription rate of 110.7 per 100 persons, one of the highest in the state of South Carolina.” The county also cited a statistic that 101 people died of opioid overdoses in 2016. That figure climbed to 131 deaths as of 2019.

The Sun News has previously detailed how the county was once home to a “pill mill” that distributed large quantities of Oxycontin and other opioids.

How the opioid settlement breaks down

The specific formula to determine how much each jurisdiction receives from the settlement can vary significantly based on numerous factors, including which state a municipality is in, how badly the state suffered from the opioid epidemic and how many other parties are in the lawsuit, according to the settlement agreement.

Because the formula used to determine each municipality’s settlement amount is so complex, Robert Kittle, a spokesperson for the South Carolina Attorney General, couldn’t confirm specific dollar amounts. Still, he said Thursday, rough estimates could likely be calculated from the settlement agreement.

Attorneys representing Greenville County, which led South Carolina’s piece of the suit, as well as attorneys for other plaintiffs, did not return phone messages on Thursday seeking comment on dollar amounts the agreement could award.

The Sun News was able to glean rough estimates for each municipality in the region based on the settlement documents. Those estimates show the cities and counties in the Pee Dee region could see between $30 and $40 million in total from the national settlement.

From the distributor settlement agreement, up to $10.2 billion could ultimately flow to states and municipalities. An additional $8.3 billion could be added to that total if states qualify for various incentives. South Carolina would receive 1.58% of the total, meaning the state could see up to $162 million, excluding attorney fees, from the base fund. The state could qualify for tens of millions more if it meets the incentives. From the Janssen settlement agreement, up to $4.5 billion could flow to states and municipalities, and South Carolina would receive 1.59% of that tota, about $72 million. That means the state could see about $234 million total from the two settlement agreements.

States hit harder by the opioid epidemic, including Ohio, Pennsylvania and Florida, and large states like New York and Texas will all receive higher percentages of the total settlement amount.

Horry County, according to the estimates, could see more than $10 million from the settlement. Florence County could see around $5 million, and Darlington County could see more than $3 million. Georgetown County, Chesterfield County and the city of Florence could all see north of $2 million each from the settlement. Marion and Marlboro counties are both likely to receive more than $1 million.

Inside Horry County, Myrtle Beach could see up to $4.3 million, while North Myrtle Beach could see more than $1 million. Conway could receive over $500,000.

What the money can go to

According to the settlement agreement, the money can be spent on dozens of programs and tools related to the opioid epidemic.

Among those listed, the funding can be used on a variety of law enforcement personnel and programs related to opioids and addiction, as well as purchasing Naloxone and giving grants to community groups who work with people who use opioids.

The money can be used for counseling and other support services if a city, county or local group offers such a program, can help people in treatment find jobs and transportation to and from those jobs, and can help people in treatment pay for legal expenses.

Funds can also go to a variety of law enforcement uses, including 911 services, police who interact with those using opioids, criminal justice programs that connect people who have overdosed with treatment and purchasing Naloxone for first-responders to carry.

In Myrtle Beach and Horry County, it’s likely the funds will go towards law enforcement, officials told The Sun News.

What government leaders — and the companies — say about the agreement

Cities and counties around South Carolina this week voted to approve the settlement agreement ahead of a Wednesday deadline. Attorneys general for the states now have two weeks to assess and approve the settlement, and the opioid distributors and Janssen will then have an additional two weeks to approve the settlement.

Kittle said the settlement should be finalized by the end of February. The settlement agreement states payments from the companies can begin as soon as April.

Horry County Council members voted to approve the settlement on Monday, and Myrtle Beach City Council followed suit on Tuesday.

The lawsuit ultimately pitted thousands of states, counties and cities against numerous distributors of opioids, as well as the manufacturer Janssen. The primary distributor defendants are AmerisourceBergen Drug Corporation, Cardinal Health and McKesson Corporation.

In a statement about the settlement agreement issued in July, AmerisourceBergen said it supported the settlement, but did not admit any wrongdoing.

“A settlement will avoid years of protracted litigation, expedite the movement of resources to communities impacted by opioid misuse and allow our company to do what we do best – ensuring that health care facilities like hospitals and community pharmacies have access to the medications that patients and care providers need,” the company wrote. “The years of legal actions leading up to this point have shown time and time again that pharmaceutical distributors must walk a legal and ethical tightrope between providing access to necessary medications and acting to prevent diversion of controlled substances.”

In a similar statement, Johnson & Johnson attorney Michael Ullman called the opioid crisis “a tremendously complex public health issue.”

“We have deep sympathy for everyone affected. This settlement will directly support state and local efforts to make meaningful progress in addressing the opioid crisis in the United States,” he said.

The companies will pay out the settlement money over the next 18 years, with larger payments happening this year and in future years, and smaller amounts continuing throughout the agreement.

Myrtle Beach Mayor Brenda Bethune said the city could use the funds for its opioid outreach program that has been active for almost two years. It’s currently supported by a grant from the state’s Department of Alcohol and Other Drug Abuse Services, she added.

“We do have an opioid epidemic. It’s nationwide, but this is going to greatly help us address the issues we have right here,” Bethune said.

Kathy Jenkins, the executive director of New Directions, which runs an opioid treatment program in Myrtle Beach, said she’s hopeful the settlement funding will allow local governments to continue using their program.

“We’ve got a really great program going and I hope this means we will continue to partner with the city of Myrtle Beach…to reduce the number of overdoses,” she said.

Even though officials in Horry County declined to release information about the settlement or comment on its terms, some county leaders said the county will benefit significantly.

“It wasn’t a small number, it wasn’t like $17,000,” County Council member Gary Loftus said Thursday. “Any time you get money it’s a good thing and of course we have had expenses regarding this thing, especially with public safety. We’ve incurred costs because of this.”