Alabama Opioid Settlement: Division, Uses, and Oversight

The Alabama opioid settlement has secured roughly $750 million from drug manufacturers, distributors, and pharmacy chains, with half the money going to the state and half to counties, cities, and certain public health entities that joined the litigation. Every dollar is restricted to opioid-related treatment, prevention, recovery, and harm reduction, and the payments stretch out over the next decade and beyond.

How the Money Is Divided

Every major Alabama opioid settlement follows the same split: 50 percent to the state and 50 percent to local entities.¹ The local half is then subdivided: 40 percent of the total settlement goes to participating political subdivisions (counties and municipalities that joined the litigation), and 10 percent goes to special districts, which include litigating public hospitals, county health departments, and county boards of health.²

The local share moves through the Attorney General’s office into a trust, which pays qualifying entities by formula. Only local governments and special districts that signed on to the settlements receive a share. Entities that opted out are not eligible.

The money doesn’t arrive all at once. Depending on the agreement, payments run anywhere from six years (Kroger) to fifteen years (Purdue Pharma). McKesson, for example, pays the state $7.05 million per year for ten years.³ Alabama will keep receiving opioid settlement dollars well into the 2030s.

What the Money Can Pay For

Settlement agreements restrict every dollar to opioid remediation. Funds cannot reimburse past expenses, backfill existing government budgets, or pay for projects unrelated to opioid addiction.¹ The national settlement agreements include a detailed list of approved uses, grouped into several areas:

Treatment: expanding medication-assisted treatment, funding the 988 crisis line, adding treatment beds for patients with co-occurring mental health and substance use disorders, and training healthcare providers on opioid use disorder.
Prevention: public education on opioid misuse, safe prescription-drug disposal, and school-based prevention programs.
Recovery support: recovery housing, employment assistance, peer support services, and educational programs that help people sustain long-term sobriety.
Harm reduction: buying and distributing naloxone to first responders, community organizations, schools, and families.⁴
Law enforcement and criminal justice: forensic laboratory capacity, drug courts and specialty courts, and pre-arrest diversion programs that route people to treatment instead of jail.

The agreements separate a shorter list of “core strategies” from the broader approved uses. Naloxone distribution and medication-assisted treatment sit at the top of the core strategies list.⁴

One important boundary: settlement money cannot be used to address problems related to non-opioid drugs, and it cannot pay for past costs. Only future costs of addressing the opioid crisis qualify. A county cannot use these funds to recoup past years of crisis response, no matter how legitimate those earlier expenses were.

Who Decides How the State Share Is Spent

The Alabama Legislature controls the state’s 50 percent through the regular appropriations process, guided by the Oversight Commission on Alabama Opioid Settlement Funds. The Commission was created by House Joint Resolution 204 and tasked with developing a statewide plan for investing the money and reviewing expenditures for compliance with settlement terms.⁵

The Commission has 16 members drawn from state government, the Legislature, and subject-matter experts, including the Commissioner of the Department of Mental Health, the State Health Officer, the Director of Finance, legislative leaders, and opioid treatment experts appointed by the Governor, Attorney General, and Lieutenant Governor.⁵

Once the Legislature appropriates funds, the Alabama Department of Mental Health handles day-to-day distribution. So far, the state has appropriated roughly $41 million through this process. The largest share, about $27.9 million, went to the Department of Mental Health for grants, Medicaid matching funds, 988 crisis line support, and treatment bed expansion. Smaller allocations went to the Department of Public Health, the Office of Prosecution Services, the Department of Forensic Sciences, and university programs training substance use treatment providers.

How Nonprofits and Community Organizations Can Apply

The Alabama Department of Mental Health runs a competitive grant program funded by opioid settlement appropriations, supporting prevention, treatment, and recovery services. Three rounds have been completed: Round 1 appropriated $8.5 million through Act 2023-384, Round 2 appropriated $8.06 million through Act 2024-426, and Round 3 appropriated $8.93 million through Act 2025-255.⁶

Each round runs through a request-for-proposals process. A multidisciplinary selection committee of prevention, treatment, and recovery professionals reviews and scores proposals. Committee members cannot submit their own proposals, work for an applicant, or be compensated for serving. Awards go out in order of score until the funding runs out.⁶

Organizations should watch the ADMH opioid settlement page at mh.alabama.gov for upcoming announcements. Application windows have been short, so groups with evidence-based programs, established community partnerships, and clearly defined outcome measures will be better positioned when the next round opens. Previous rounds have funded recovery centers, churches, and other groups delivering direct services.

Reporting Rules and Consequences for Misuse

Every entity that receives opioid settlement funds faces reporting obligations. The national settlement agreements require any money spent on purposes that don’t qualify as opioid remediation (including attorney fees, investigation costs, and litigation expenses) to be reported to the settlement fund administrator through the national settlement portal.⁷ The deadline for reporting on funds used through June 30, 2026, is September 30, 2026. Those reports are meant to be made available to the public.

Alabama does not currently publish a single dashboard showing how every settlement dollar is spent. The ADMH opioid settlement page lists grant awardees for each funding round, which is the most accessible window into how the state share flows out. KFF Health News and the Johns Hopkins Bloomberg School of Public Health maintain a national database tracking opioid settlement expenditures across all states, though that data typically lags actual spending by a year or more.

The consequences for spending outside approved categories are real. If a state or local government uses settlement funds for purposes that don’t qualify as opioid remediation, it risks losing future settlement payments.¹

Where the $750 Million Comes From

The total is built from a combination of state-specific deals and Alabama’s share of national multi-state agreements. Among distributors, Cardinal Health and Cencora (formerly AmerisourceBergen) together committed $220 million over ten years, and McKesson agreed separately to $141 million over ten years.³

Among pharmacies, Walgreens committed roughly $82.2 million and CVS roughly $75.9 million, both paid over ten years. Kroger agreed to approximately $19.8 million over six years.³

Manufacturers add several more layers. Johnson & Johnson agreed to pay $70.3 million, Teva committed approximately $57.1 million over thirteen years, and Allergan agreed to roughly $34 million over seven years.¹ Endo Pharmaceutical paid $25 million in a lump sum.⁸

In June 2025, Alabama signed on to a nationwide $7.4 billion settlement with Purdue Pharma, the maker of OxyContin, with Alabama’s share potentially reaching $75 million over fifteen years.⁹ A month later, the state joined settlements with eight secondary opioid manufacturers, adding roughly $11.7 million more.

1
Alabama Attorney General. Alabama Opioid Settlement Funds Presentation
2
Alabama Attorney General. Opioid Litigation Special Master Reports
3
Alabama Attorney General. State of Alabama Opioid Settlements
4
National Opioid Settlement. Exhibit E – List of Opioid Remediation Uses
5
Alabama Legislature. HJR204 – Creating the Oversight Commission on Alabama Opioid Settlement Funds
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Alabama Department of Mental Health. Oversight Commission on Alabama Opioid Settlement Fund Grant Program
7
National Opioid Settlement. National Opioids Settlement – Non-Opioid Remediation Use Reporting
8
Alabama Attorney General. Attorney General Steve Marshall Announces $276 Million in State of Alabama Settlements With Opioid Manufacturers, Distributor
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Alabama Attorney General. Attorney General Marshall Signs On to a Nationwide $7.4 Billion Purdue Settlement