Fifteen states that were previously against a settlement plan proposed by OxyContin manufacturer Purdue Pharma for its role in the opioid crisis now support a new version.
Deal Reached with Most States
On July 7, 2021, a filing in the U.S. Bankruptcy Court in White Plains, NY about Purdue Pharma’s settlement plan was disclosed. The agreement from multiple state attorneys general, including those who had aggressively opposed the company’s original plan, followed weeks of mediations.
The new settlement plan calls for Purdue to make tens of millions of internal documents public, a step that several attorneys general had demanded as a means of holding the company accountable.
“No One Is Happy with the Settlement”
In a joint online news conference on July 8, some of the attorneys general who signed on to the agreement noted that their states will receive more money more quickly to fund drug treatment and prevention. But they also expressed anger with Purdue Pharma and members of the Sackler family who own the company and have not accepted any blame.
“No one is happy with the settlement,” said New York Attorney General Letitia James. “Can the Sacklers do more? Hell yeah, they can do a lot better, but it should first begin with an apology.”
According to North Carolina Attorney General Josh Stein, the settlement plan now includes about $1.5 billion more than it initially did. Nevertheless, while 41 attorneys general total have signed on so far, nine states and the District of Columbia have not.
One holdout, Washington Attorney General Bob Ferguson, complained that “This settlement plan allows the Sacklers to walk away as billionaires with a legal shield for life.”
Most groups representing various creditors, including victims and local governments, had supported the original settlement plan. However, state attorneys general had been divided, with about half of them on board with the plan and half opposed. In a statement, Purdue said that it would try to build “even greater consensus” for the deal.
Sackler Contribution Up to $4.5 Billion
In 2019, Purdue sought bankruptcy protection in order to settle about 3,000 lawsuits against it from state and local governments and other entities. The suits claim that the company’s continued marketing of OxyContin contributed to a crisis that has been linked to nearly 500,000 deaths in the United States over the past twenty years.
The court filing came from a mediator appointed by the bankruptcy court. It shows that members of the Sackler family agreed to increase their contribution to the settlement up to a total of $4.5 billion in cash and assets. They are not admitting wrongdoing and no court has found any liability by a family member.
The agreement also prevents the Sacklers from obtaining naming rights related to their charitable donations until they have paid all the money owed under the settlement. Furthermore, the family has given up its business interests related to the manufacture or sale of opioids.
Additionally, Purdue’s settlement plan calls for members of the Sackler family to relinquish ownership of the company as part of a deal that it claims could be worth $10 billion over time, a number that includes the value of overdose-reversal drugs that Purdue plans to produce.
Money from the plan is geared to go to government entities, which have agreed to use it to remedy the opioid crisis, as well as to individual victims and their families.
Attorneys General Did Not Like Earlier Deal
Massachusetts Attorney General Maura Healey, who was the first state attorney general to sue Sackler family members, praised the modified deal. She also pointed to the $90 million that Massachusetts would receive and the way that Purdue could release hundreds of thousands of confidential communications with lawyers about its sales tactics and other matters.
Last month, however, she criticized the original plan, saying that “The Sacklers are not offering to pay anything near what they should for the harm and devastation caused to families and communities around this country.”
The attorneys general who had opposed the earlier deal said that they did not like having to rely on profits from the continued sale of painkillers to combat the opioid epidemic, though the new deal lets state and local governments opt out of receiving those funds. They also said that the initial plan did not hold the Sackler family sufficiently accountable or make documents public explaining the company’s role in the crisis.
Activists continue to be against the settlement plan, and two Democratic members of Congress have asked the Department of Justice to reject it. Reps. Carolyn Maloney and Mark DeSaulnier said in a statement that allowing Sackler family members “to obtain legal immunity through Purdue’s bankruptcy would be a tragic miscarriage of justice.” The Department has not commented.
Purdue Settlement Plan Still Not Approved
The support from the additional attorneys general arrives less than two weeks before the deadline to object formally to the settlement plan and approximately a month before a hearing on whether it should be accepted. However, with only nine states and the District of Columbia opposed, the federal bankruptcy judge looks more likely to confirm the deal.
Last year, Purdue pleaded guilty to federal criminal charges and agreed to pay $225 million to the government. In a separate civil settlement, the Sackler family also agreed to pay $225 million to the federal government while still admitting no wrongdoing.
Purdue’s bankruptcy case is the highest-profile piece of national litigation against drug manufacturers, distribution companies, and pharmacies. Trials against other companies in the pharmaceutical industry are currently happening in California, New York, and West Virginia, though negotiations have settled many of the lawsuits.
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