San Francisco Can’t Use Opioid Settlement Funds for Drug Sites, Attorney Says

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This week, San Francisco officials said the city would allow nonprofits to operate sites for controlled drug use. But a potential conflict is brewing over whether the money from the settlement can be used to fund sites that are banned by federal law.

The city is looking to raise more than $120 million in funding from a lawsuit that ended in August alleging drug companies AbbVie, Endo, Teva and Walgreens acted carelessly in fueling a drug crisis on the streets of San Francisco.

Supervisor Hillary Ronen, who drafted an agreement with Mayor Breeda of London to remove permit barriers to drug sites, called for these settlements to be used as a way to exempt the city from directly funding facilities contrary to federal law. Other council members agreed—despite warnings from the city attorney that it could expose the city to legal risks—or said it was the first time they had heard of a limitation on the use of settlement funds.

“It complicates things,” Dorsey said. “That would be a really elegant solution.”

The city attorney’s office said that because the funds for the settlement go to the state treasury, they cannot be used to fund the sites. Breed has supported the New York version of the safe consumption sites, which are operated by a non-profit organization with private donations, although the city funds other services offered in the same building.

The use of funds won from opioid lawsuits could lead to city liability, according to the city attorney’s office.

“To the extent that opioid billing funds are paid to the city, they are city dollars, regardless of the source. In this context, they cannot be distinguished from any other city funding,” said Jen Quart, a spokeswoman for the city’s attorney.

In an interview Friday, Ronen accused the city attorney of effectively blocking safe consumption sites with his determination not to use settlement funds.

“It’s really disappointing; I feel like the city attorney speaks on both sides of his mouth,” Ronen said.

According to Sam Rivera, executive director of OnPoint NYC, a nonprofit organization that runs the sites, the cost of running 28 drug collection points five days a week at two sites in New York City is $1.4 million a year. But sites in New York are at risk of shutting down as their private funding dries up, Rivera said.

Rivera estimated that running the two New York sites around the clock would require $4.3 million a year.

“The momentum is great. But in terms of another hurdle for us, it will be funding,” said Gary McCoy, vice president of policy and public relations for the nonprofit HealthRight 360.

HealthRight 360 is one of at least three non-profit organizations in San Francisco seeking to open sites for safe consumption. The Gubbio Project, a nonprofit providing shelter and resources for the homeless, said it could open a safe consumption site at a church in the Mission area. According to public records viewed by The Standard, the SF AIDS Foundation also has a proposal to open a safe consumption point at 444 Sixth Street.

McCoy is one of those pushing for the city to allocate funds from the opioid settlement to a private foundation, which could then distribute the funds to places of consumption.

“The overdose prevention site is pretty much what these settlement dollars are funded for,” McCoy said. “I don’t understand why we can’t use these funds.”

Many drug policy experts view the place of consumption as an essential part of a concerted plan to reduce drug deaths. Last year, for 11 months, a center called the Tenderloin Center operated in the city, during which more than 300 cases of overdose were prevented.

But the Tenderloin Center closed in December without a replacement amid controversy over client performance and the center’s impact on the surrounding area. Construction cost the city $22 million last year.

Supervisor Rafael Mandelman said he was not concerned about the legal risks associated with opening a safe consumption point and would support the use of settlement funds for this. But he added that the city should use most of the money for other activities.

“Nurses in private hospitals are being attacked by people being brought to emergency rooms because we don’t have a place to bring people who are psychotic and intoxicated,” Mandelman said.

“I just want to make sure we’re doing other things that I see we can’t do and that I’m much more excited about,” he said.

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