Purdue Pharma Is Dissolved and Sacklers Pay $4.5 Billion to Settle Opioid Claims | 04 September, 2021

Purdue Pharma, the maker of the highly addictive painkiller OxyContin, was dissolved on Wednesday in a wide-ranging bankruptcy settlement that will require the company’s owners, members of the Sackler family, to turn over billions of dollars of their fortune to address the deadly opioid epidemic.

But the agreement includes a much-disputed condition: It largely absolves the Sacklers of Purdue’s opioid-related liability. And as such, they will remain among the richest families in the country.

Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., approved the settlement, saying he wanted modest adjustments. The painstakingly negotiated plan will end thousands of lawsuits brought by state and local governments, tribes, hospitals and individuals to address a public health crisis that led to the deaths of more than 500,000 people nationwide.

The settlement terms have been harshly criticized for shielding the Sacklers. They are receiving protections that are typically given to companies that emerge from bankruptcy, but not necessarily to owners who, like the Sacklers, do not themselves file for bankruptcy.

Several states, including Connecticut and Washington State, have already said they intend to appeal the judge’s ruling. In exchange for the protections, the Sacklers agreed to turn over $4.5 billion, including federal settlement fees, paid in installments over roughly nine years. Those payments, and the profits of a new drug company rising from Purdue’s ashes with no ties to the Sackler family, will mainly go to addiction treatment and prevention programs across the country.

Judge Drain delivered his ruling orally from the bench in a marathon session that ran to six hours, meticulously working through his reasoning in a case he called the most complex he had ever faced. “This is a bitter result,” he said. “B-I-T-T-E-R,” he spelled out, explaining that he was frustrated that so much Sackler money was parked in offshore accounts. He said he had expected and wished for a higher settlement.

But the costs of further delay, he said, and the benefits of an agreement he described as “remarkable” in its ability to help abate the epidemic, tilted toward approval.

While the settlement serves as a benchmark in the nationwide opioid litigation aimed at covering governments’ costs and compensating families, it also means that a full accounting of Purdue’s role in the epidemic will never unfold in open court. Purdue pleaded guilty to federal criminal charges for drastically downplaying OxyContin’s addictive properties and, years later, for soliciting high-volume prescribers.

But in a concession that made the bankruptcy plan more palatable to many plaintiffs, the company and the Sacklers agreed to make public more than 30 million documents, including confidential emails, that may reveal comprehensive marketing strategies.

Just last month, Dr. Richard Sackler, a former president and co-chairman of the board, testified that neither the family, the company nor its products bore any responsibility for the opioid epidemic. Other Sacklers struck a more conciliatory note, saying they were horrified that a medication intended to alleviate pain had, in fact, caused pain to so many. But no one apologized or took personal responsibility.

“I don’t think anybody would say that justice has been done because there’s just so much harm that was caused, and so much money that has been retained by the company and by the family,” said Dr. Joshua Sharfstein, a professor at the Johns Hopkins Bloomberg School of Public Health who developed a set of priorities for opioid settlement funds. “But this is what the legal system is going to produce. So at this point, the question becomes, how can those resources be used as effectively as possible?”

A majority of states and other plaintiffs support the plan, reasoning that it is the best to help pay for a problem that has only grown worse during the pandemic, with a record number of opioid overdose deaths last year.

Steve Miller, the chairman of Purdue’s board, said in a statement that the plan “ensures that billions of dollars will be devoted to helping people and communities who have been hurt by the opioid crisis.” The Mortimer Sackler branch and the Raymond Sackler branch each issued statements calling the resolution an important step in providing funds to address the public health crisis.

The Purdue settlement aligns with what some experts predicted from the outset: The money extracted through litigation will not be sufficient to cover the costs of the epidemic — including for law enforcement, treatment and social services — which some economists put in the trillions.

(Source: New York Times)