The Washington Post: Purdue Pharma owners strike new $US6.5b deal in opioid case

The billionaire family that owns Purdue Pharma, maker of the pain medication blamed for helping fuel the nation’s opioid crisis, has agreed to increase payments to settle long-running litigation against the company, promising to pay $US6.5 billion ($10.2b) over 15 years as part of a deal announced Thursday by several State attorneys general.

The deal comes after the Supreme Court in June blocked a controversial bankruptcy plan for Purdue that shielded Sackler family members — who themselves did not file for bankruptcy — from future opioid lawsuits in exchange for paying up to $US6b over 18 years.

The new deal, if approved by a New York Federal bankruptcy judge and State courts, will allow governments and victims who don’t agree to the settlement to pursue lawsuits against the Sacklers.

The agreement also calls for setting aside an initial $US200 million — and up to $US800m — to use toward defending the Sacklers against those future claims, according to the offices of the New York and Connecticut attorneys general; money not used after five years would begin to revert to states.

“I have said since Day one that this fight has been about justice and accountability for the hundreds of thousands of victims and families wrecked by the opioid epidemic,” Connecticut Attorney General William Tong said in a statement.

“There will never be enough justice or dollars to restore those families or right this terrible wrong.”

The total deal is worth $US7.4b, with Purdue contributing nearly $US900m to pay governments and victims. If approved, a significant portion of the money will be paid within three years, State officials said.

The company, in a statement, said the new agreement will deliver billions of dollars to “compensate victims, abate the opioid crisis, and deliver treatment and overdose rescue medicines that will save lives.” Representatives from multiple branches of the Sackler family did not reply to requests for comment.

The announcement adds another chapter to the winding legal saga involving the pharmaceutical company that earned billions of dollars from the blockbuster painkiller OxyContin as sales representatives in the late 1990s and early 2000s aggressively marketed the drug while downplaying the risk of addiction.

Purdue, facing a tsunami of lawsuits from governments, tribes, hospitals, opioid victims and others, filed for bankruptcy in 2019, pausing legal claims against the company.

Sackler family members have denied wrongdoing or personal responsibility, although two branches of the family in an earlier statement to a bankruptcy court expressed regret that “OxyContin, a prescription medicine that continues to help people suffering from chronic pain, unexpectedly became part of an opioid crisis that has brought grief and loss to far too many families and communities”.

Lawsuits against Purdue and the Sacklers have loomed as part of wider litigation against pharmaceutical companies, drug distributors, pharmacy retail chains, pharmacy benefit managers and others accused of helping fuel the nation’s opioid crisis.

Governments have alleged that the distributors and pharmacies failed to flag suspicious orders of prescription opioids, stretching thin the public safety and health resources of communities hard hit by addiction.

Companies have agreed to about $US50b in settlements — money intended to help communities ease the effects of the epidemic by paying for overdose reversal medications, addiction treatment, education, police resources and other uses.

Purdue’s initial bankruptcy plan proved controversial, dividing families who have lost relatives to addiction and drug overdoses. Supporters insisted that the deal would provide much-needed money to communities to address the epidemic. They pointed out that nearly all the creditors who voted on the plan approved of the deal.

Critics asserted the Sacklers, who withdrew $US11b from the company in the years leading up to the bankruptcy, were not paying enough and would avoid civil trials. The family has long said the withdrawals were lawful and nearly half was paid to taxes.

The Justice Department objected, saying bankruptcy law did not allow the Sacklers to get shielded from lawsuits from future parties who did not consent. A divided Supreme Court in June ruled in the Justice Department’s favour.

The new deal hashed out through court-ordered mediation mirrors the previous plan in key ways. The family would relinquish control of Purdue, which would be refashioned into a company whose earnings would go toward curbing the opioid epidemic. Millions of internal Purdue documents chronicling the company’s role in the opioid crisis would be made public.

The settlement “represents justice for the untold victims who suffered because the Sacklers put profits above people,” New York Attorney General Letitia James said in a statement.

The new settlement will also pay between $US800m and $US850m in total compensation to opioid victims, a boost from the previous figure, which allowed for payments of up to $US750m.

“The new settlement is an improvement over the old one, but for those who say this is a vindication of the government’s senseless appeals … the hundreds of victims who lost their lives because of the delay, would beg to differ,” said Edward Neiger, an attorney who represents a committee made up of thousands of victims.

More than a dozen States — including California, Florida, New York and Virginia — participated in the talks and must now seek participation from other states and local governments who have sued. Some governments may roll the dice at trial. For instance, Nassau County, New York, has “made it clear the Sacklers will be in a courtroom in New York regardless of this new effort to derail a jury trial,” said attorney Hunter Shkolnik, who represents the county.

Relatives of some opioid victims also criticised the deal.

Since 2000, hundreds of thousands have died in the United States of prescription opioid overdoses, according to statistics from the Centers for Disease Control and Prevention. The crisis recently has evolved into an even deadlier phase, marked by the use of synthetic opioids such as fentanyl that typically are illegally manufactured and imported.

Ed Bisch, who lost his son to an overdose and runs a group called Relatives Against Purdue Pharma, said victims “paid with their lives and get peanuts in the end - while states collect billions in blood money.”

The Washington Post