Sunday, September 26, 2021

Judge approves Purdue Pharmaceuticals opioid settlement agreement

Author: Geoff Mulvihill | Associated Press

A federal bankruptcy judge conditionally approved a comprehensive plan submitted by OxyContin manufacturer Purdue Pharmaceuticals on Wednesday that may cost 10 billion U.S. dollars to resolve opioids that have killed 500,000 Americans in the past two decades Mass litigation for the role of the drug crisis.

According to the settlement agreement, the Sackler family will give up ownership of the company and contribute US$4.5 billion. But the Sackler family will be immune from any future lawsuits related to opioids.

The drugmaker itself will be reorganized into a new company with a board of directors appointed by public officials, and its profits will be used for government-led efforts to prevent and treat addiction.

In addition, the settlement agreement established a compensation fund that will pay an estimated $3,500 to $48,000 per person in compensation for some drug victims.

After a full day of hearings, he continuously analyzed the pros and cons of the plan within 6 1/2 hours. US Bankruptcy Judge Robert Drain stated that as long as two relatively small changes were made, He will approve the plan. He said that if so, he will make a formal decision on Thursday.

He said that although he “dislikes the Sacklers and does not sympathize with them,” it would be complicated to collect money from them through litigation rather than settlement.

The transaction is nearly two years after the Stamford, Connecticut-based company filed for bankruptcy under the weight of approximately 3,000 lawsuits filed by state and local governments, individuals, Native American tribes, hospitals, labor unions, and other entities. Reached later.

They accused Purdue Pharmaceuticals of actively promoting the sales of its best-selling prescription painkillers, thereby exacerbating the crisis.

According to the settlement agreement, the Sacklers did not receive immunity from criminal charges, although there is no indication that they will face any charges.

State and local governments overwhelmingly support the plan, although in many cases reluctantly. But nine states and other states opposed it mainly because of the protection of the Sackler family.

The attorneys general of Washington and Connecticut immediately announced that they would appeal the plan, as did the US bankruptcy trustee, an agency designed to protect the US bankruptcy system.

Connecticut Attorney General William Tang said that the Sackler family “should not be allowed to manipulate bankruptcy laws to evade justice and protect their blood debts.”

Some families who have lost loved ones due to drug use have also stood up against the settlement agreement, including Ed Bisch of Westampton, New Jersey, whose 18-year-old son died of a drug overdose nearly 20 years ago. “The Sackler family is buying their immunity,” he said.

But other families said they did not want to risk losing money for treatment and prevention.

“If they give me a million dollars, will it help me bring back my son?” said Lynn Wincus of Wrensom, Massachusetts. “Let us help those who really fight this disease.”

Purdue Pharmaceuticals said in a statement that the settlement agreement will avoid “years of value-destroying litigation,” but will ensure that billions of dollars will be used to help people and communities hurt by the crisis.

The bankruptcy judge, based in White Plains, New York, urged opponents to reach an agreement for the same reason.

“The resentment about the outcome of this case is completely understandable,” Drain said. “But people must also consider the process, issues, risks and rewards, and alternatives to continue the settlement stipulated in the litigation and plan.”

In the past two decades, some opioid deaths have been attributed to OxyContin and other prescription pain relievers, but most come from illegal forms of opioids, such as heroin and illegally produced fentanyl. Last year, the number of deaths related to opioids in the United States continued to increase at a record rate, reaching 70,000.

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This crisis destroyed the reputation of the Sackler family, whose names were carved on the walls of museums and universities around the world. Through the settlement, the family members who own the company will still be worth billions of dollars.

Whether the transaction makes the Sackler family bear sufficient responsibility is the most controversial issue in the entire litigation process. Many state attorneys general and advocacy groups working on behalf of opioid victims urged family members to pay more and initially opposed exemptions.

They succeeded in increasing the amount paid by the Sackler family in ten years from a possible US$3 billion to a guaranteed US$4.5 billion.

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Former Purdue board member David Sackler testified that family members will not accept the agreement unless the agreement protects them from lawsuits. Otherwise, he said, the family will defend itself in a lawsuit that may delay for many years, and the company and family assets will be swallowed up by attorney fees.

His father, Richard Sackler, the former president and chairman of the board of directors of Purdue University, said in an interview that he, his family and the company are not responsible for the opioid crisis.

Delane pointed out that none of the four Sackler testimonies apologized explicitly. “Forced to apologize is not a real apology, so we will have to live without an apology,” he said.

The judge asked for two slightly technical changes to the plan: one to clarify that members of the Sackler family will only be protected from opioid lawsuits, and the other is the process of filing non-opioid claims against them.

A forecast commissioned by a group of state attorneys general found that despite payments under the settlement agreement, the family’s wealth could increase from the current estimate of $10.7 billion to more than $14 billion by 2030. This is because the family can continue to benefit from investment returns and interest payments, as they gradually contribute according to the agreement.

However, lawyers from Purdue University and the Sackler family branch disputed the assumptions used in the forecast.

The settlement agreement also requires members of the Sackler family scattered in the United States, the United Kingdom and other parts of Europe to withdraw from the global opioid business.

Several attorneys-generals won another clause that would create a large public repository of company documents, including documents normally protected by attorney-client privileges. It is developing addiction treatments and overdose antidote drugs.

The bankruptcy is not the first time Purdue University has faced legal disputes over the marketing of its painkillers.

Judge approves Purdue Pharmaceuticals opioid settlement agreement
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