Home Providers & Partners California Opioid Settlement Funds FAQs

California Opioid Settlement Funds FAQs

This webpage provides answers to frequently asked questions (FAQs) from California’s participating cities and counties regarding California opioid settlements and bankruptcies. A list of eligible cities and counties can be found in Appendix 1 of each of the respective California State-Subdivision Agreements.

The FAQs are organized into the following categories:

General Information:

Settlements

Bankruptcies

General Information

Background Questions

Why is California receiving opioid settlement money?

During the opioid epidemic, state, local, and tribal governments have brought lawsuits against pharmaceutical and drug distribution companies that have fueled the crisis. The lawsuits allege that these companies fueled the opioid crisis by marketing opioids in misleading ways, downplaying risks, exaggerating benefits, and engaging in reckless distribution practices. The lawsuits seek to recover costs associated with the opioid epidemic and remediation.

To address and prevent further crises, California has joined several lawsuits against manufacturers, distributors, pharmacies, and other entities responsible for aiding the opioid epidemic. California and California’s participating cities and counties are receiving funding from settlements to be used for future opioid remediation activities and are expected to receive additional funds as more settlements are finalized.

Are funds from the California opioid settlements and bankruptcies considered state funds or federal funds passed through California?

Funds from the California opioid settlements and bankruptcies are not considered state or federal funds. The settlement funds originate from multistate settlements with prescription opioid manufacturers, distributors, and pharmacies to resolve their liabilities in over 3,000 opioid crisis-related lawsuits nationwide. Allocations to cities and counties are administered by the respective settlement and bankruptcy administrators based on allocation percentages in the respective state agreements.

What is the role of the California Department of Health Care Services in the California opioid settlements and bankruptcies?

California Department of Health Care Services (DHCS) serves as the state’s designated oversight entity for California’s opioid settlement and bankruptcy funds, as established in the relevant state agreements.

DHCS responsibilities include:

Monitoring participating cities and counties for compliance with applicable settlement and bankruptcy agreements, including allowable uses of funds and reporting requirements;
Identifying and designating additional high-impact opioid abatement activities, as authorized;
Conducting stakeholder engagement related to opioid remediation efforts; and
Preparing and publishing required annual reports.

DHCS does not distribute settlement or bankruptcy payments. Payments to cities and counties are made directly by the settlement administrators, including BrownGreer PLC for the National Opioid Settlement Agreements and the National Opioid Abatement Trust II (NOAT II) for the National Mallinckrodt Bankruptcy Agreements. There are additional settlement and bankruptcy payments distributed to cities and counties that are not under DHCS oversight, and cities and counties are not required to report them annually to DHCS. View the Settlement Overview resource for more information on settlements and bankruptcies that do not require reporting to DHCS.

Where can cities and counties find payment information?

DHCS periodically updates the list of payments made to the State of California and its participating cities and counties on the DHCS California Opioid Settlements List of Payments webpage. Information on anticipated settlement payments can be found on Brown Greer PLC’s website. Information on Mallinckrodt Bankruptcy payments can be found on the NOAT II’s website.

Why are the California opioid settlements and bankruptcies paid over different time periods?

Though often referred to collectively, the California opioid settlements and bankruptcies come from separate agreements established through nationwide lawsuits against opioid manufacturers, distributors, and pharmacies. Funds from these settlements may be paid over different periods depending on the terms agreed upon in the relevant settlement.

What is the difference between California Participating Subdivisions, Plaintiff Subdivisions, and Local Governments?

The National Opioid Settlement Agreements and National Mallinckrodt Bankruptcy Agreements use different terms to refer to local jurisdictions.

For the opioid settlements, the two relevant local jurisdictions are Participating Subdivisions and Plaintiff Subdivisions. All Plaintiff Subdivisions are Participating Subdivisions, but not all Participating Subdivisions are Plaintiff Subdivisions. The California State-Subdivision Agreements define Plaintiff Subdivision as a California city or county that filed or participated in litigation against one or more Opioid Defendants prior to October 1, 2020. Participating Subdivisions are either a) Plaintiff Subdivisions or b) a city or county with a population equal to or greater than 10,000.

The Mallinckrodt Bankruptcy defines Local Governments as counties and incorporated cities with a population of at least 10,000 located in California. Counties automatically receive their payments, while cities’ participation is predicated on whether or not the city opted to receive funds from the Distributors Settlement.

Are there any other settlements or bankruptcies for California cities and counties?

There are additional settlement and bankruptcy payments, including the McKinsey settlement and Endo bankruptcy, distributed to cities and counties that are not under DHCS oversight, and cities and counties are not required to report them annually to DHCS.

The California Attorney General’s Office continues to engage with opioid manufacturers, distributors, and pharmacies regarding potential settlements and bankruptcies. DHCS will post proposed or final settlement agreements relevant to California cities and counties on the California Opioid Settlements webpage as they become available.

Technical Assistance

How do we request technical assistance?

DHCS offers technical assistance to participating cities and counties interested in reviewing eligible opioid remediation activities, expense tracking, and reporting requirements under the California Opioid Settlements. Participating Subdivisions with general inquiries can contact DHCS at OSF@dhcs.ca.gov. Cities and counties seeking feedback on their plans for settlement funding may submit a Settlement/Bankruptcy Technical Assistance Request Form to OSF@dhcs.ca.gov.

How can I find out how other cities, counties, and local governments are expending their funds?

DHCS prepares an annual report regarding the State and Participating Subdivisions’ use of settlement funds until those funds are fully expended, and for one year thereafter. These reports will be made publicly available on the California Opioid Settlements Expenditure Reports webpage.

What are the best practices for allocating funds?

When allocating funds, Participating Subdivisions are encouraged to:

Invest in evidence-based strategies, particularly those identified in the Core Strategies (Schedule A) of Exhibit E and prioritizing activities that also meet California’s High-Impact Abatement Activities (HIAA);
Use funds to supplement and expand existing successful programs, rather than supplanting current funding;
Establish transparent planning and decision-making processes; and
Engage people with lived experience, as well as professionals working in substance use disorder (SUD) prevention, treatment, harm reduction, and recovery, to ensure investments align with community needs.

How can I be added to the distribution list to receive updates about California opioid settlements and bankruptcies?

Relevant city and county stakeholders may request to be added to the distribution list by emailing OSF@dhcs.ca.gov.

Where can I find additional resources?

Cities and counties should visit the Resources and Technical Assistance tab on the DHCS Opioid Settlements webpage for fact sheets, guidance documents, and recordings of webinars.

Participating Subdivisions are also encouraged to review the DHCS Settlement Overview Resource for a more detailed overview of allowable expenditures and reporting requirements by settlement and allocation type.

Settlements

Allocation Structure

How will funds from the opioid settlements be distributed in California?

The California opioid settlement funds are allocated as follows:

70% of funds will go to Participating Subdivisions through the California (CA) Abatement Accounts Fund;
15% of funds will go to Plaintiff Subdivisions through the CA Subdivision Fund; and
15% of settlement funds will go to the State of California through the California State Fund.

Fund Type	Recipient(s)	Allowable Uses
CA Abatement Accounts Fund (70%)	CA Participating Subdivisions	Funds must be used for future Opioid Remediation in one or more of the areas described in Exhibit E of the National Opioid Settlement Agreements, AND No less than 50% of the funds received in each calendar year will be used for one or more High Impact Abatement Activities.
CA Subdivision Fund (15%)	CA Plaintiff Subdivisions	Funds must be used towards future Opioid Remediation and to reimburse past opioid-related expenses, which may include litigation fees and expenses.
CA State Fund (15%)	The State of California	Funds must be used for future Opioid Remediation.

How does the California Abatement Accounts Fund differ from the California Subdivision Fund?

The CA Abatement Accounts Fund provides funds to all Participating Subdivisions who have opted to receive direct payment for future opioid remediation activities. CA Abatement Accounts Funds are restricted to uses listed in Exhibit E and a small amount available for administrative expenses. Additionally, no less than 50% of funds received from the CA Abatement Accounts Fund must be used for one or more of the California High Impact Abatement Activities (HIAA). The CA Subdivision Fund allocates funds to cities and counties that were initial plaintiffs during litigation for the opioid settlements. These cities and counties (Plaintiff Subdivisions) may use funds from the CA Subdivision Fund towards future opioid remediation activities and to reimburse past opioid-related expenses, including litigation fees and expenses. Plaintiff Subdivisions will receive funds from both the CA Subdivision Fund and the CA Abatement Accounts Fund. The CA Subdivision Fund is not required to be spent on HIAAs. A list of Participating Subdivisions and Plaintiff Subdivisions can be found in Appendix 1 of each of the respective California State-Subdivision Agreements.

What is the Special Master Award of Subdivision Costs and its reporting requirements?

Appendix 2 of California’s California State-Subdivision Agreements and Exhibit R to each of the Settlement Agreements outlines a procedure for the reimbursement of Subdivision Costs. Costs means the reasonable amounts paid for the attorney and other city attorney and county counsel staff time for individuals employed by a Plaintiff Subdivision in litigation against any Opioid Defendant. The allocated amount received by a CA Plaintiff Subdivision for Special Master Award of Subdivision Costs must be reported to DHCS annually. Additionally, the amount received must be reported to the directing administrator, BrownGreer.

Use of Funds

Are there requirements for how Participating Subdivisions can expend funds received from the California Opioid Settlements?

Yes. Opioid settlement funds are intended to be used for Opioid Remediation, defined as the care, treatment, and other programs and expenditures designed to:

Address the misuse and abuse of opioid products;
Treat or mitigate opioid use or related disorders; or
Mitigate other alleged effects of, including on those injured as a result of, the opioid epidemic.

All funds received by Participating Subdivisions from the CA Abatement Accounts Fund must be used for Opioid Remediation in one or more of the areas described in Exhibit E of the settlement agreements. Additionally, no less than 50% of funds received from the CA Abatement Accounts Fund must be used for one or more of the California High Impact Abatement Activities (HIAA). Participating Subdivisions can also review the California Opioid Settlements Allowable Expenditures resource for eligible opioid for eligible opioid remediation activities. For more information on the use and reporting requirements for funds received from the CA Abatement Accounts Fund, reference BHIN 24-002.

Pursuant to the California State-Subdivision Agreements, allocations from the CA Subdivision Fund shall be used to fund future opioid remediation projects and reimburse past opioid-related expenses, which may include fees and expenses related to litigation against a relevant Opioid Defendant. DHCS encourages Plaintiff Subdivisions receiving allocations from the CA Subdivision Fund to review the list of eligible opioid remediation activities and strategies in Exhibit E of the National Opioid Settlement Agreements. For more information on the use and reporting requirements for funds received from the CA Subdivision Fund, reference BHIN 24-003.

What happens if Participating Subdivisions expend funds on unallowable activities?

If DHCS determines that a CA Participating Subdivision’s use of CA Abatement Accounts Funds is inconsistent with eligible uses, records may be requested as part of a meet and confer, an audit, or legal action.

Can we use settlement funds for administrative expenses?

Yes. The National Opioid Settlement Agreements allow the use of funds for “reasonable related administrative expenses.” DHCS considers administrative expenses not identifiable with a specific activity/program or benefitting more than one cost objective, such as overhead, general operations, or organization-wide activities of an agency, to be indirect costs.

For the CA Abatement Accounts Fund, DHCS’ Reasonable Administrative Cost Policy permits administrative (indirect) costs of up to 10 percent of the total amount allocated to an opioid remediation activity or program.

While the CA Subdivision Fund does not have a separate administrative cost policy, Plaintiff Subdivisions are encouraged to follow the DHCS Reasonable Administrative Cost Policy as a best practice.

Are Participating Subdivisions required to submit proposals for the use of funds received from the opioid settlements?

No, Participating Subdivisions are not required to submit spending proposals before funding projects. If your city or county would like feedback on your plans for the settlement funds, you may submit a California Opioid Settlement/Bankruptcy Technical Assistance Request Form to OSF@dhcs.ca.gov.

Are Participating Subdivisions required to gather public input on expenditure plans prior to using the funds?

Participating Subdivisions are not required to gather public input when developing expenditure plans for funds received from the opioid settlements. However, to increase the efficacy and success of opioid remediation efforts, DHCS strongly encourages Participating Subdivisions to coordinate with external entities, such as local departments of health, service and community groups, and people with lived experience, to determine the best use of their allocations. DHCS hosted a webinar on this topic, available on the California Opioid Settlements Resources & Technical Assistance webpage.

How will California confirm that opioid settlement funds are expended on strategies to address the epidemic?

To participate in the settlements, Participating Subdivisions accepted the terms and conditions of the California State-Subdivision Agreements, which certify that participating entities will use funds for eligible opioid remediation activities and prepare and file reports at least annually regarding the use of those funds to DHCS. If DHCS determines that a Participating Subdivision’s use of CA Abatement Accounts Funds is inconsistent with eligible uses, records may be requested as part of a meet and confer, an audit, or legal action.

What are encumbered and unencumbered funds?

Encumbered funds are sums of money that have been formally committed to a specific, allowable future activity or expense (e.g., through an approved budget, signed contract, purchase order, or other formal process) but have not yet been spent. These amounts are not considered actual expenditures but reflect a future financial obligation.

Unencumbered funds refer to sums of money that were formally committed by the Participating Subdivision to a particular purpose (e.g., through an approved budget, signed contract, purchase order, or other formal encumbrance) but have now been unobligated by the Participating Subdivision, resulting in the funds no longer committed to the initial specified activity.

DHCS collects information about encumbered and unencumbered funds during annual reporting periods.

Can funds be encumbered or carried over to the next year?

Yes. Participating Subdivisions may roll over funds from the previous year and/or encumber funds for future eligible expenditures. Participating Subdivisions may not encumber funds until they have been received.

Do funds from the CA Abatement Accounts Fund and CA Subdivision Fund have to be expended during a specific timeframe?

Pursuant to the California State- Subdivision Agreements, funds from the CA Abatement Accounts Fund must be expended or encumbered within five (5) years of receipt or seven (7) years for capital outlay projects. For example, funds received during 2022 must be expended or encumbered by 2027 for non-capital outlay projects or 2029 for capital outlay projects. Funds not expended or encumbered within these timeframes must be returned to the state.

Funds from the CA Subdivision Fund do not have explicit expenditure timeframes designated in the State-Subdivision Agreements. However, DHCS recommends that cities and counties follow similar expenditure timeframes as described for the CA Abatement Accounts Fund.

Can funds received from each settlement be combined to pay for one expense?

Yes. Participating Subdivisions that receive funds from multiple settlements may combine these funds to pay for a single expense. If combining allocation types, the activity must meet allowable use requirements for both allocation types. Activities funded from multiple settlements must be delineated by each fund source during reporting periods.

Allowable Expenditures

What are High Impact Abatement Activities (HIAA)?

California state officials, in partnership with counsel representing cities and counties, agreed upon a list of high-impact opioid remediation activities to prioritize within the State of California. These priorities, referred to as High Impact Abatement Activities (HIAA), must align with an Exhibit E Opioid Remediation use and can be found in the respective California State-Subdivision Agreements. DHCS may add additional HIAA in consultation with Participating Subdivisions but cannot amend or remove existing activities from the established HIAA list.

HIAA requirements only apply to funds received from the CA Abatement Accounts Funds.

As of January 2026, the California HIAA include:

No.	Activity
1	The provision of matching funds or operating costs for substance use disorder (SUD) facilities within the Behavioral Health Continuum Infrastructure Program (BHCIP)
2	Creating new or expanded SUD treatment infrastructure
3	Addressing the needs of communities of color and vulnerable populations (including sheltered and unsheltered homeless populations) that are disproportionately impacted by SUD
4	Diversion of people with SUD from the justice system into treatment, including by providing training and resources to first and early responders (sworn and non-sworn) and implementing best practices for outreach, diversion and deflection, employability, restorative justice, and harm reduction
5	Interventions to prevent drug addiction in vulnerable youth
6	The purchase of naloxone for distribution and efforts to expand access to naloxone for opioid overdose reversals

Does the High Impact Abatement Activity (HIAA) #4 include law enforcement activities?

HIAA #4 is about diversion and deflection programs that decrease the number of people with substance use disorders (SUD) entering the justice system and increase their entry into treatment. Though diversion and deflection programs may involve law enforcement, not all law enforcement activities qualify as an allowable opioid remediation activity under Exhibit E and HIAA #4. For more information about law enforcement diversion efforts, review the resources below:

National Council on Mental Wellbeing: Deflection and Pre-arrest Diversion to Prevent Opioid Overdose (Tools and Resources)
AddictionFreeCA.org: Information about Opioid Treatment in California’s Jails and Drug Courts.

What are allowable law enforcement activities?

California Abatement Accounts funds are intended to be used for remediation of the opioid crisis, and efforts should be focused on community-based public health approaches, prevention, treatment, recovery, and/or harm reduction.

Exhibit E of the National Opioid Settlement Agreement includes the following activities involving law enforcement:

Provide MAT education and awareness training to healthcare providers, EMTs, law enforcement, and other first responders;
Officer prevention strategies, such as the Law Enforcement Assisted) Diversion (“LEAD”) model;
Provide training on best practices for addressing the needs of criminal justice-involved persons with opioid use disorder (OUD) and any co-occurring SUD/mental health (MH) conditions to law enforcement, correctional, or judicial personnel or to providers of treatment, recovery, harm reduction, case management, or other services offered in connection with any of the strategies described in Section D of the Schedule B Approved Uses; and
Education of law enforcement or other first responders regarding appropriate practices and precautions when dealing with fentanyl or other drugs.

For more information about allowable law enforcement activities, review the Law Enforcement and First Responder Expenses With Opioid Settlement Funds Fact Sheet.

How does the established Naloxone Distribution Project differ from the Naloxone HIAA?

The Naloxone Distribution Project (NDP) is a separate program through DHCS that provides no-cost naloxone to eligible organizations. Participating Subdivisions may be eligible to order free naloxone through the NDP.

The naloxone HIAA establishes the purchase of naloxone as a priority expenditure for Participating Subdivisions receiving funds from the California opioid settlements. As an alternative to the NDP, DHCS encourages Participating Subdivisions to order from the CalRX Naloxone Access Initiative, which provides naloxone at prices below market rate for entities in California: https://calrx.ca.gov/get-naloxone/.

More information about naloxone and naloxone training options is available on the DHCS Naloxone Distribution Project webpage and the California Department of Public Health (CDPH) Naloxone webpage.

Do encumbered funds count toward the 50% HIAA spending requirement over payment years?

It depends. Certain encumbrances may count toward the 50% HIAA spending requirement. DHCS staff can assist with specifics after a Technical Assistance form is submitted.

Once a city or county encumbers funds for a specific activity, the intended purpose of the funds should not be altered, including those encumbered and reported as HIAA. If encumbered funds are unencumbered, they are at risk of being past the five (5) or seven (7) year expenditure timeframes and may be returned to the state. Because of this requirement, cities and counties are encouraged to carefully track payments, expenditures, and encumbrances of funds received for CA Abatement Accounts Funds.

Do medications used for MAT need FDA approval specifically to treat OUD or SUD included in Exhibit E?

Medications must have FDA approval and be aligned with an allowable opioid remediation activity. Non-FDA approved medications are not an allowable expense as described in Exhibit E of the National Opioid Settlement Agreements.

Reporting Requirements

For information about the DHCS annual expenditure reporting form, please review the Expenditure Reporting Q&A.

Why do cities and counties need to report on the use of funds if the settlements are with private companies?

To participate in the settlements, Participating Subdivisions accepted the terms and conditions of the California State-Subdivision Agreements, which certify that participating entities will use funds for eligible opioid remediation activities and prepare and file reports at least annually regarding the use of those funds. More information is available on the California Opioid Settlements Reporting Requirements webpage.

Do Participating Subdivisions need to complete the reporting form if they have not spent or committed their allocations during a reporting period?

Yes, Participating Subdivisions must indicate funds reallocated, received, carried or rolled over year-to-year during reporting periods. If your Participating Subdivision did not spend funds during a specific fiscal year, you would write in 0 during the expenditure sections of the reporting form.

Are there reporting requirements for backstop amounts withheld from the California Subdivision Fund payments?

Plaintiff Subdivisions may enter into backstop agreements to pay their contingency-fee attorneys from monies they received from the California Subdivision Fund, as provided in Section 5 of the California State-Subdivision Agreements and Exhibit R to each of the National Opioid Settlement Agreements. Funds held in backstop do not need to be reported to DHCS, however payments made to contingency fee counsel from funds held in backstop are reported to DHCS during annual reporting periods. Backstop Fund payments to contingency fee counsel are included in the report as a legal fee expenditure for the reporting year.

What are the reporting requirements for CA Subdivision Funds used for litigation expenses?

Plaintiff Subdivisions that use their CA Subdivision Funds to reimburse past opioid-related litigation expenses must report those expenditures to DHCS on the annual reporting form. Additionally, the Participating Subdivisions must file a Non-Opioid Remediation Use Report to BrownGreer. For more information on Non-Opioid Remediation Use Reports, please contact the Directing Administrator, BrownGreer PLC, at DirectingAdministrator@NationalOpioidOfficialSettlement.com.

Bankruptcies

Allocation Structure

How are funds from the Mallinckrodt Bankruptcy be distributed in California?

Mallinckrodt Bankruptcy funds are distributed by a separate administrator from the opioid settlements. The National Opioid Abatement Trust (NOAT) will distribute the funds as follows:

60% of NOAT II Funds will go to Local Governments
40% of NOAT II Funds will go to the State of California

Allocation Type	Recipient(s)	Allowable Uses
Local Government share (60%)	Local Governments	Funds must be used for future opioid remediation in one or more of the opioid remediation activities listed in Exhibit 4 of the Mallinckrodt Bankruptcy Plan (Exhibit E of the National Opioid Settlement Agreements).
State Share (40%)	State of California	Funds must be used for future opioid remediation in one or more of the opioid remediation activities listed in Exhibit 4 of the Mallinckrodt Bankruptcy Plan (Exhibit E of the National Opioid Settlement Agreements).

Will there be more payments from the Mallinckrodt Bankruptcy to Local Governments?

There are no more payments from the Mallinckrodt Bankruptcy to Local Governments. DHCS encourages expenditure of these funds to mitigate the additional administrative burden of reporting.

Use of Funds

Can Local Governments use bankruptcy funds for administrative expenses?

Yes. For Mallinckrodt bankruptcy funds, Local Governments may use a portion of their allocation to cover reasonable related administrative expenses. Approved administrative costs may not exceed five percent (5%) of the total allocation, as specified in the California Mallinckrodt Statewide Abatement Agreement.

Do funds from the Mallinckrodt Bankruptcy have to be expended during a specific timeframe?

No, the NOAT II Fund (Mallinckrodt Bankruptcy) does not have explicit expenditure timeframes designated in the Statewide Abatement Agreement. However, DHCS recommends that cities and counties follow expenditure timeframes similar to those described for the CA Abatement Accounts Fund. Funds from the Mallinckrodt Bankruptcy are required to be reported annually until fully expended.

Reporting Requirements

How do the reporting requirements for Mallinckrodt Bankruptcy funds differ from the National Opioid Settlements?

NOAT II funds are derived from a bankruptcy agreement with Mallinckrodt plc, while the National Opioid Settlements are derived from settlement agreements made with other opioid manufacturers, distributors, and pharmacies. Counties and cities are required to report on Mallinckrodt Bankruptcy expenditures to DHCS annually until all funds are expended. DHCS then aggregates reporting to complete a state report to the NOAT II Trustees on behalf of the Local Governments. Cities and counties will be asked to report on the total amount spent from their Mallinckrodt Bankruptcy funds, and to associate that spending with an Exhibit E category. Cities and counties will also have to certify that they do not exceed the 5% limit on administrative expenses for Mallinckrodt funds.

Are there reporting requirements for the McKinsey Settlement and Endo Bankruptcy funds?

The McKinsey Subdivision Settlement is separate and distinct from the National Opioid Settlements. The Endo Bankruptcy matter is also separate and distinct from the Mallinckrodt Bankruptcy. The McKinsey Subdivision Settlement and the Endo Bankruptcy matter are not monitored by DHCS, and DHCS does not collect expenditure information about these funds. You may reach out to your city, county, or outside counsel handling your opioid-related matters for additional guidance.

Information about the McKinsey Subdivision Settlement may be found on the settlement website.

Information about the Endo Trust, including copies of its governing documents, is accessible on this website. Should you have any additional questions, you may contact adminstrator@endotrust.com.