Judge Rejects $4.5B Cash Deal to Protect OxyContin Pusher Family from Opioid Lawsuits

Even billionaires can’t buy their way out of sweeping opioid crisis lawsuits.
OxyContin® by Purdue Pharma – Shutterstock

Big pharma’s moment of reckoning for roles in the opioid crisis began to unravel recently. On November 24, 2020, opioid maker Purdue Pharma LP pleaded guilty to fraud and kickback conspiracies amid a flurry of litigation over its role in the opioid epidemic. Purdue Pharma pitched a massive bankruptcy settlement to essentially make the bulk of litigation go away.

But a federal judge tossed out OxyContin maker Purdue Pharma’s bankruptcy settlement on December 16—including thousands of individual lawsuits—because of one particular, pricey provision that would have shielded members of the Sackler family from facing lawsuits of their own.

The Rise of Opioid Drugs

The Sackler family’s company Purdue Pharma unveiled OxyContin® 25 years ago, before more powerful opioids started popping up everywhere, including on the street. Documents made public in 2020 show how Purdue Pharma actively pushed to get higher numbers of prescriptions for painkillers. This happened before America hit a “record high” of drug overdoses during the pandemic last year, crowning decades of addiction, caused largely by people who are introduced to drugs through opioids.

While a New York bankruptcy court initially approved the bankruptcy settlement, it was quickly struck down. U.S. District Judge Colleen McMahon said in a written opinion on Thursday the New York bankruptcy court that approved the settlement did not have authority to grant the Sacklers immunity from future opioid litigation.

The Sackler Family—accused of fueling the opioid epidemic through doctor perks and more—insisted on installing legal shields, or nondebtor releases, in exchange for a $4.5 billion cash payout to resolve opioid litigation. Nondebtor releases protect parties that have not filed for bankruptcy themselves.

Under the scrapped deal, members of the Sackler family would give up ownership of the company—which would continue to sell opioids—but redirect profits to “fight the opioid crisis.” Under the deal, Purdue Pharma would also develop more novel anti-addiction and anti-overdose drugs and provide them at “little or no cost.”

Per the deal, the Sackler family members would fork up $4.5 billion in cash, USA Today reports, and charitable assets as part of larger deal that could hit $10 billion, which includes the future value of the new anti-addiction drugs, if they pan out. In other words, Purdue Pharma would continue to cash out on both ends of opioid addiction. Even WebMD saw an ethical problem with Purdue making buprenorphine wafers to solve addiction caused by the same company, in a 2018 analysis.

An Appeal is in Order

Purdue said it would appeal the decision in a statement published Friday.

“While the district court decision does not affect Purdue’s rock-solid operational stability or its ability to produce its many medications safely and effectively, it will delay, and perhaps end, the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis,” said Steve Miller, Chairman of the Purdue Pharma LP Board of Directors. “These funds are needed now more than ever as overdose rates hit record-highs, and we are confident that we can successfully appeal this decision and deliver desperately needed funds to the communities and individuals suffering in the midst of this crisis.”

The Sackler saga was even turned into a live action series, Hulu’s Dopesick—which asks hard-hitting questions such as whether or not Purdue Pharma and the Sackler family are truly responsible for their roles in the opioid crisis.

The Associated Press reports that Connecticut Attorney General William Tong, who slammed the $4.5 billion deal, called the ruling “a seismic victory for justice and accountability.” He also said the judgement will “re-open the deeply flawed Purdue bankruptcy and force the Sackler family to confront the pain and devastation they have caused.”

In 2021, the opioid crisis is worse than ever before. It’s important to keep in mind that people living in high pain still need access to opioids, and often get confused with addicts.

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