Palm Springs council approves first $215K from opioid lawsuit settlements. What to know

After gaining roughly $215,000 in settlement money by joining opioid lawsuits against some of the nation’s largest pharmaceutical companies, Palm Springs will use the funding for a variety of programs designed to help those struggling with substance abuse and addiction.

The initial funding approved by the council is part of roughly $2.9 million in total coming to the city over the next 18 years as a result of the settlements.

The council’s approval of money for three programs did not include specific earmarks or deadlines for the money to be spent. Instead, the funds will be placed in an account used for future reimbursements from any of the three initiatives.

“As this is the first year of program operations, there isn’t data to assist in determining which program area may have the greatest need,” City Manager Scott Stiles wrote in a council report last week. “The City Council may wish to allocate specific amounts to each program area in the future once reports are available on program needs and successes.”

Where's the money coming from?

The city received $215,838 in opioid settlement funds from the state of California, with the money required to be used mainly for “opioid abatement.”

The money stems from a 2022 nationwide settlement over thousands of civil claims related to the opioid crisis filed against the nation’s three largest drug distributors — McKesson, AmerisourceBergen and Cardinal Health — and a major pharmaceutical manufacturer, Janssen Pharmaceuticals.

Through the $26 billion settlement — which is the second-largest multistate settlement agreement in U.S. history, per the New York Times — the state of California will receive roughly $2.05 billion through 2038.

Additionally, five other settlements against the pharmacies of CVS, Walgreens and Walmart — as well as manufacturers Allergan and Teva Pharmaceuticals — led to a proposed $17.3 billion settlement, from which the state of California is expected to see hundreds of millions of dollars.

Along with this year's funding, the city will continue to receive about $150,000 annually for the next 18 years from these settlements, according to Stiles’ council report.

How will the money be used locally?

While specific funding amounts will be determined by city staff, the council agreed to use some of the funds for its Rehabilitation Re-entry Program, a new effort to help people at risk of having to leave addiction rehab programs once they cannot afford it any longer.

Applicants for the Rehabilitation Re-entry Program would be eligible for up to $5,000 for reimbursements on the following services from qualified providers:

• Inpatient programming of both detox and residential levels of care.

• A step-down outpatient program with housing.

• Partial hospital programming.

• Intensive outpatient programming.

The program may also be used to reimburse the cost of medications not covered by people’s health insurance, as well as other necessary costs during the course of treatment.

In the report to council, Stiles noted the available funding “may be the deciding factor for someone seeking treatment and may encourage more individuals to pursue rehabilitation.”

The second program eligible for the funding is a substance misuse harm reduction program, making Naloxone — a medication that rapidly reverses opioid overdoses — and other harm reduction items available to health and social services providers, police and fire personnel and opioid users to prevent overdoses.

The settlement funds could also be used on the city’s tenant-based rental assistance program, which was set up by the council last year. The rental aid program, which gained another $1 million in funding at the council's Feb. 8 meeting, would use the settlement funds specifically for people moving into sober living facilities.

What city officials said

The need for such programs is evident in the valley: The Palm Springs Fire Department reported receiving 275 calls for individuals who had overdosed in 2023, of which 101 calls required the use of Naloxone, often known by its brand name Narcan. Thirty-eight of those calls were for individuals who are homeless, according to the department.

The funding will expand the availability of Naloxone for city officials and first responders while building on existing efforts. Last fall, local nonprofit DAP Health installed a free vending machine with an overdose reversing spray, STI test kits and fentanyl test strips at Hunters Palm Springs downtown, and the city indicated its interest in similar efforts.

“Additionally, public access to such items would be made available through the use of an outside vending machine to be placed in an area of the city to be determined,” Stiles said in his council report. “The City of Palm Springs will work with DAP Harm Reduction Program to identify a location for the vending machine and DAP would be responsible for maintaining and stocking the machine.”

Representatives from DAP Health’s harm reduction program also spoke to the council Thursday, noting they used Narcan to save 556 people and referred more than 500 people to social support services in 2023.

Meanwhile, the rehabilitation rehab re-entry program proposed to receive funding would be a new city program, according to Jay Virata, the city’s director of housing and community development. He noted data from Michael’s House Treatment Center that showed 75% of its population had to exit treatment due to a lack of funding or health insurance.

More: DAP Health adds harm reduction vending machine at Hunters, reflects on program

The council cheered the funding and the city taking initiative to join the lawsuits, though councilmembers also acknowledged the first round of funds won’t go far. A few members encouraged city staff to leverage the money with other related grants and initiatives in the community.

“The funds that we're receiving are frankly a drop in the bucket compared to the costs that we have incurred over the course of a number of years — and are continuing to incur — because of opioid addiction issues and the amount of fentanyl that’s in the system,” Councilmember Lisa Middleton said.

“I think we need to, as we're looking at these programs, really concentrate our efforts on those programs that will have a dramatic effect on treatment for those individuals who have become addicted and are at risk of losing their lives,” she added.

City officials also said they could use the settlement money for other related initiatives at the council’s direction.

Tom Coulter covers the cities of Palm Desert, La Quinta, Rancho Mirage and Indian Wells. Reach him at thomas.coulter@desertsun.com.

This article originally appeared on Palm Springs Desert Sun: Palm Springs to see $2.9 million from opioid lawsuit settlements. What to know