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intention of this litigation, which is to abate the continuing public health crisis of opioid <br />addiction within our communities. <br />While supported by the State, this requirement was imposed the defendants for tax and <br />other reasons. It is also necessary to militate against the United States seeking substantial <br />amounts of settlement lands from both the State and subdivisions as recoupment. <br />How are the funds :allocated amongst the States? <br />While not part of the MOU, the States have been negotiating the national allocation for <br />almost two years with an agreement reached in late 2019. Florida's interstate allocation is <br />7.03%. That allocation is tile, second largest allocation in the nation ahead of Texas, which is the <br />second largest state. Florida is one of a handful of states whose allocation is greater and greater <br />by a siinifcant percentage above its population (Florida has 6.54% of the. United States' <br />population). The only states that have larger gains over their population are the opioid belt <br />states: West Virginia, Kentucky, etc. The interstate allocation is the product of: two measures. <br />One calculated by the PEC and the other calculated by the States. The data sets chosen are <br />slightly different (including different years and what measures were selected), but the main <br />difference is that some states demanded that population play a more significant factor in the state <br />allocation and it is not a factor in the PEC calculation. Given how much Florida's allocation <br />percentage is above its population, the need in these settlements to maximize:the number of <br />states settling, and the potential litigation risks in the absence of such an agreement, it would be <br />our recommendation that cities and counties accept the interstate allocation. <br />Ilow much money does the State expect for it and its subdivisions? <br />It depends. Each of the current or proposed settlements are for different lengths of time <br />and each contain different variability. In Purdue, payments are paid over sten-year period and <br />vary with the perforniancc of the ongoing business of the new company and payments from third <br />parties. In Mallinckrodt, payment amounts are still beim; negotiated, but will be paid over seven <br />years and will vary depending on the value of tilt emerging company seven years later as part of <br />the recovery is warrants in the re-emerged company. In the Distributor and J&J proposed deal, <br />the proposed deal is over eighteen years and the amount paid varies depending on subdivision <br />participation and whether other subdivisions file opioid related litigation in the future. As part of <br />the MIOU, the State is willing to seek judicial or legislative action to reduce the variability of the <br />monies, especially in connection with the Distributor and J&J deal. Our current best guess based <br />on projections and assuming total participation is 5120-140M a year for the first few years, $90- <br />110M a year for the middle years, and then 560-70M a year for the later years of the deal for the <br />State and its subdivisions. Again, these numbers can and will vary and hopefully will increase if <br />additional settlements are reached. <br />I -low are the funds allocated amongst the State anti its subdivisions? <br />This Proposal divides all settlement finds between three funds: (1) the City/County Fund; <br />(2.) the Regional Fund; and (3) the State Fund. <br />Page 3 of 7 <br />55 <br />