New Mexico to use over one fourth of opioid settlement fees on outside lawyers, according to LFC
*Editor’s Note: This story has been updated to clarify which attorney general handled the initiation of settlements.
SANTA FE, N.M. (KRQE) – New Mexico has been promised more than $880 million in opioid-related settlements and nearly $250 million of that will go to outside council fees, according to the state’s Legislative Finance Committee (LFC).
New Mexico is one of the states that has been involved in lawsuits against national opioid companies. New Mexico is expecting hundreds of millions of dollars from settlements, much of which must be used for the treatment of opioid use disorders. But a large share will also go to lawyers.
“The national opioid summit represents one of the biggest health settlements, ever, and is a historic opportunity to address substance use disorders, and potentially save the lives of millions of New Mexicans,” LFC analyst Felix Chavez told lawmakers in a committee meeting on Thursday. But “high outside counsel fees have diminished the pool of monies that we have received from the settlement.”
New Mexico chose to pursue some of the lawsuits by hiring private law firms, rather than by participating in a National Opioids Settlement, the LFC notes. As a result, outside council fees for settlements with Albertsons, CVS, Walgreens, Kroger, Walmart and opioid distributors total $249.4 million.
The fees New Mexico is facing are higher than what some other states have to pay for private opioid settlements, the LFC says and faces significantly higher fees than states participating in the national settlement.
“The attorney general [Hector Balderas at the time] chose to contract to a private firm for this instead of a national framework because it does allow for greater settlement value,” Chaves said. “However, New Mexico still ended up paying higher rates than other states that decided to pursue it in a similar [private] fashion.”
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Chart from the LFC shows New Mexico is paying more in legal fees than some other states for opioid settlements.
The LFC also notes that fees to lawyers will be paid out years before the state gets its full share of settlement funds.
The remaining money that doesn’t go to lawyers will be split between state and local government in New Mexico. The state will get over $310 million while local governments will get $324.5 million, the LFC says. The money is intended to help address the issue of drug use and abuse within communities.
“In 2021, over 1,000 New Mexicans have died of drug overdoses,” Chavez told lawmakers. “That equates to three New Mexicans per day, with the state seeing nearly 200,000 residents living with substance use.”
*Note: Not all of New Mexico’s opioid-related settlements were moved outside of the national settlement; settlements with distributors followed the national settlement structure, the LFC says.
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