Nevada was hit hard by the opioid epidemic, with the state and local municipalities receiving more than $870 million in settlement funds from big drug companies for their role in the crisis that has killed thousands of Nevadans.
While data from the Centers for Disease Control and Prevention (CDC) showed national rates for opioid-related deaths dropped by 23.7 percent between 2023 and 2024, rates in Nevada increased by 11.3 percent — one of only five states to do so. Data from the CDC indicates nearly 1,500 people have died from overdose in the 12 months ending in October, with more than 969 of those tied to opioids.
But opioid advocates and experts are now ringing the alarm over the state’s proposed two-year budget, saying it uses $10 million of the $870 million in opioid settlement dollars in a way that potentially violates settlement agreements and opens the state to lawsuits and loss of the funds.
“We believe these funds were born from tragedy and were intended for healing, and that they’re being diverted to plug budget gaps,” said Ryan Hampton, an addiction recovery advocate and the founder and executive director of a nonprofit aimed at addressing the opioid crisis.
As lawmakers review Gov. Joe Lombardo’s proposed two-year budget, Hampton and other recovery advocates say at least $10 million in settlement funding appears to be going to programs or appropriations that don’t directly address the opioid epidemic.
With reporting from The New York Times showing the potential for massive cuts to federal grants to states and nonprofits to address addiction, Hampton said the opioid litigation funds could also be used as a stopgap to ensure that existing services continue to be delivered to Nevada residents.
“If we don’t have our baseline services, our infrastructure funded in the state, people will die and doors will close,” he said. “ The potential impacts, long term public health impacts for Nevada could be catastrophic.”
In 2023, state lawmakers carefully crafted legislation to place guardrails around Nevada’s portion of opioid litigation recoveries. The legislation specified that the more than $870 million from the settlements with major drug companies should be solely used to address opioid-related risks, harms and effects. Several of the settlement agreements and bankruptcy orders have specific exhibits outlining the limits or instructions on how the funds should be used, and all of them require the funds to be used for abatement.
“There is a restriction on the use, so it would be a violation of the terms of the agreement and court orders,” Chief Deputy Attorney General Mark Krueger said in an interview when asked what would happen if funds were not going to address the opioid crisis. “This use of funds in opioid settlement is being very, very much watched by everybody, because there’s such an interest in eradicating and abating the epidemic.”
Elizabeth Ray, a spokesperson for the governor’s office, said the governor’s recommended budget follows the settlement agreements and state law in its funding for programs and initiatives to abate the opioid epidemic.
“Many of the initiatives and programs outlined focus on specific priority populations,” she said, noting that one of the funding initiatives is supporting services that assist families at risk of losing custody of their children to substance use by ensuring they receive the necessary resources to promote family stability.
“The programs outlined in the recommended budget are new initiatives, not supplanting funds from other sources,” Ray said, adding that the budget follows state law allowing for certain “administrative costs to implement the program, including staffing, office equipment and technology, and other needed supports to implement the state program.”
Regina LaBelle, a professor and director of the Center on Addiction Policy at the O’Neill Institute for National and Global Health Law at Georgetown Law, said public officials can argue that spending the money on related but not direct opioid addiction and recovery programs aligns with the intent and letter of settlement agreements, keeping the state out of the threat of a lawsuit that could claw back the funding.
Still, she said there are other questions people should consider.
“We can make legal arguments that this might be acceptable, but really, at the end of the day, it’s a moral argument for those people who lost loved ones,” she said.
Questionable spending?
Hampton — who ran for a state Assembly seat as a Democrat in 2024 and lost to a Lombardo-endorsed candidate — highlighted the following proposals that he said questionably used opioid funding:
- $5 million for the Temporary Assistance for Needy Families (TANF) program, a federal program that helps low-income families with children,
- $2.5 million for child welfare to those in extended foster care;
- $85,000 for minority health office staff;
- $664,166 for state officials to support aging issues and the calibration of audiology equipment; and
- $2 million to upgrade the Summit View intake center, a maximum-security youth facility with a capacity of 48 beds.
As a point of comparison, Hampton said $10 million could be used to purchase about 700,000 Narcan kits, medication that can save someone’s life by reversing the effects of an opioid overdose.
During a joint budget committee meeting last month, Assembly Speaker Steve Yeager (D-Las Vegas) echoed advocates’ concerns.
“Can you give me your thought process of how backfilling TANF would be an appropriate use, given the restrictions in the law and how we can use this money?” Yeager asked the Department of Health and Human Services Director Richard Whitley during the Feb. 6 hearing.
Whitley said TANF money is being used to expand an existing program for relatives who are raising children whose parents are abusing substances. He added that there’s data to back up the focus of the settlement fund to child welfare and other programs in the budget supported by opioid settlement funds, and blamed the misunderstandings on poorly written budget summaries that are often not reviewed by program heads.
“We can do better at writing them up,” Whitley said. “I apologize, because I do think a lot of work has gone into this.”
Lombardo’s spokesperson reiterated that the $5 million TANF request serves families affected by substance abuse.
“By offering these critical services, the goal is to ensure that children can safely remain in, or return to, their homes or the homes of relatives, ultimately reducing the need for foster care placements,” Ray said. She said to reduce costs and implementation time for the new program, officials are building on the state’s TANF program because the new program would serve a similar population.
Ray said the Department of Health and Human Services is responsible for developing a statewide needs assessment and plan to address the opioid epidemic. The state is focusing opioid settlement funds on priority populations and initiatives that align with the assessment’s goals, she said, noting that a recent state report indicates that more than 12 percent of infants born in Nevada are exposed to substances in the womb.
“Initiatives to support pregnant women, infants and children works toward the goal of supporting families and giving babies a healthy start,” Ray said. “By supporting programs focused on pregnant women and youth, there is an opportunity to intervene early to help break the cycle of addiction.”
Risks of misuse
Krueger, chief deputy attorney general, said in an interview that the law governing the opioid funding disbursement is written with spending stipulations. It’s incumbent upon the Legislature to question whether funds were spent correctly and if they should be returned to the state, he said.
Bankruptcy courts require reports as well, he said, and court administrators can also reach out on behalf of settlements. Though he didn’t recall a specific clawback provision within the settlements for misused funding, he said there are funding restrictions.
“Private litigants also benefited from the settlements, but as you can see, the restrictions for the state money was to limit its use to state services that are provided, not individual payouts,” he said. “We only speak to the state’s role of helping the services and programs that are going to abate the epidemic.”
Yeager told The Nevada Independent that budget concerns have motivated him to ask pointed questions about every budget that includes opioid monies.
“That work continues and we won’t close budgets until we are assured the funds are being used as intended,” Yeager said. “It is my intent to make sure Nevada passes a balanced budget that provides the critical services across the state as needed.”
Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) said restrictions on opioid settlement funds can vary by settlement agreement and some are broad. She said lawmakers are evaluating the funding carefully.
“It’s certainly something the [finance] committee will look at carefully to be sure we aren’t going to run afoul of any agreements the state has made and risk losing funds,” Cannizzaro said.
Establishing guardrails
Fears about misuse of settlement funds are not new.
After Nevada joined the massive national tobacco settlement agreement, lawmakers in 1999 allocated 60 percent of the money to health care programs and 40 percent to establish the Governor Guinn Millennium Scholarship Program, a college scholarship program unrelated to tobacco.
A 2021 presentation from the Department of Health and Human Services shows that out of the 60 percent of tobacco settlement funding going to health care, from 2020 to 2023 only about 4 percent was allocated for tobacco cessation programs, with the rest going to other health care programs.
LaBelle said the distribution of tobacco money was a lesson for litigators in the opioid settlement cases across the country.
“[What to do with the tobacco funding] really was left up to the states. So they didn’t spend it on tobacco prevention,” she said. “It was a big topic of discussion: How can we prevent what happened in tobacco from happening here?
“You always have to keep in mind the thousands of people who died and their families and they fought really hard throughout this process to hold these companies accountable. You’re kind of breaking a trust with all these people who are affected by not spending it to abate … the harms caused by these companies.”
Patrick Carter, the vice president and state practice lead for the national nonprofit Results for America, said the opioid settlement funds reflect an opportunity for states to save lives. Carter estimated that if at least 50 percent of the opioid settlement funds across the country were directed toward evidence-based solutions, the country could expect nearly 120,000 fewer people using illegal opioids and avoid more than 90,000 opioid overdose deaths.
“We know how this goes if state leaders and local leaders are not intentional about targeting these services to the people impacted and setting an expectation that they are being spent on programs with track records,” Carter said, referencing the tobacco settlement funds.
Nevada lawmakers focused on oversight and accountability when they passed SB390 in 2021, the legislation that would guide the allocation of opioid settlement funds.
In presenting the bill, then-Chief of Staff for Attorney General Aaron Ford Jessica Adair told lawmakers that the funding was essential to attack the opioid epidemic at every point from prevention to remediation.
Under the legislation in its final form, the state’s portion of the recoveries (about 43 percent) minus litigation costs go to the Fund for a Resilient Nevada, which was established to house the state’s portion of the settlement dollars. Local governments that are part of the settlement agreement receive funding directly, with most recoveries flowing through the state.
The settlement funds come through the attorney general’s office, where costs such as attorneys’ fees are deducted and paid. The remaining amounts are divided and disbursed under the One Nevada Agreement, an intrastate allocation agreement between counties, litigating cities and the state.
With authorization from the Legislature, the Department of Health and Human Services then allocates the money to fund programs and services directly or through grants. The law contains parameters for a needs assessment and state plan which must be updated every four years. Two committees advise the creation of the needs assessment, with funds subject to transparency requirements and other rules.
Out of the more than $1.1 billion recovered for Nevada as part of the opioid settlements, about $29 million went toward costs, nearly $200 million went to attorney fees, roughly $19.3 million went to a common benefit fund and more than $870 million was split between states, municipalities and counties that were signatories to the One Nevada Agreement.
“At the end of the day, all of this goes to the Interim Finance Committee for approval, so the Legislature then gets a say,” Adair said about the approval process for the state’s share of funding. “I think it is important to talk about those pieces because it gets at the question … about how we know this is going toward the need and how we ensure that, even though this is one-shot funding, people who are affected by this crisis are the ones who will benefit from the funds from those who brought this destruction on to our state.”
‘Do something’
For families experiencing the crisis on the ground, the legal argument doesn’t matter.
Debi Nadler is a committee member of the state’s Substance Use Response Working Group (SURG) which is responsible for developing recommendations to improve the state’s substance use prevention and response efforts.
Nadler’s son, Brett, died from addiction in 2018 at the age of 28. She described her son as a bright, outgoing and charismatic UNLV student who became addicted to opioids after he had his wisdom teeth removed and suffered a traumatic experience.
She said she wanted to be a member of the SURG committee to ensure family members who lost loved ones have a voice in the process, but there’s a lack of transparency around the opioid funding. Families are still suffering.
“I sold everything I owned to put my son in rehabs across this country, and a billion dollars will not bring him back,” she said. “However, do something. They need to do something for the family members … We have groups here. We work together, we have meetings. We help each other. We’re the ones lifting each other up. Certainly nobody in our state is.”
