On Wednesday, a federal bankruptcy judge conditionally approved a comprehensive plan submitted by OxyContin manufacturer Purdue Pharmaceuticals that may cost 10 billion U.S. dollars to resolve opioids that have killed 500,000 Americans in the past two decades A large number of lawsuits for the role of the drug in the crisis.
According to a settlement agreement with creditors (including individual victims and thousands of state and local governments), the Sackler family will give up ownership of the company and contribute US$4.5 billion, but will be exempt from any opioid-induced problems in the future. litigation.
The drugmaker will be reorganized into a new company with a board of directors appointed by public officials and use its profits for government-led efforts to prevent and treat opioid addiction.
In addition, the settlement agreement established a compensation fund that will pay some drug addiction victims an estimated compensation of USD 3,500 to 48,000 per person.
U.S. Bankruptcy Judge Robert Drain (Robert Drain) said after speaking on the bench for more than six hours on Wednesday that he would approve the plan with only two technical changes. He said that if so, he will make a formal decision on Thursday.
Before the ruling, he stated that although he “dislikes the Sacklers and does not sympathize with them,” it would be complicated to collect money from them through litigation.
The settlement was reached nearly two years after the Stamford, Connecticut-based company filed for bankruptcy under the weight of approximately 3,000 lawsuits from various states, local governments, Native American tribes, hospitals, labor unions, and other entities. They accused Purdue Pharmaceuticals of actively promoting the sales of its best-selling prescription painkillers, thereby exacerbating the crisis.
Although there is no indication that they will face any criminal charges, the Sacklers have not been granted immunity from criminal charges.
State and local governments overwhelmingly support the plan, although many people do so reluctantly, as do groups representing people harmed by prescription opioids.
Nine states, Washington, D.C., Seattle, and the United States bankruptcy trustees seek to protect the country’s bankruptcy system and oppose the settlement, mainly because of the protection given to the Sackler family. At least some of them are expected to appeal.
Washington State Attorney General Bob Ferguson quickly announced that he would appeal the plan, saying that the plan was insufficient.
The bankruptcy judge in White Plains, New York, urged adherents to negotiate an agreement and warned that a delayed lawsuit would delay the payment of settlements to victims and the plans needed to deal with the epidemic.
“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.”
He pointed out that the payment issue was mediated by Kenneth Feinberg, who oversaw the government’s September 11 victim compensation fund.
Most states have sued Purdue University, claiming that it actively promotes OxyContin, which has led to an opioid overdose and addiction epidemic, which is related to the deaths of more than 500,000 people in the United States
Some deaths were attributed to OxyContin and other prescription opioids, but most came 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.
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 this transaction provides sufficient accountability for the Sacklers 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.
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 instead of being used to help resolve the crisis.
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.
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 general won another clause that would create a huge public repository of company documents, including correspondence with lawyers who are usually protected by lawyer-client privileges.
Purdue said that the total settlement will be worth about 10 billion U.S. dollars, and this figure includes the value of addiction treatments and overdose detoxification drugs it is developing.
The bankruptcy is not the first time Purdue University has faced legal trouble for the marketing of its prescription painkillers.
The company admitted in 2007 to federal accusations that it misled regulators and others regarding OxyContin’s addiction risks, and agreed to pay more than $600 million in fines.
In November last year, as part of a settlement agreement with the U.S. Department of Justice, Purdue University admitted to conspiring to defraud the United States and violating anti-kickback laws.
Purdue’s bankruptcy has always been the most compelling case in the field of complex opioid litigation.
The drug maker Johnson & Johnson and the three major US drug distribution companies recently announced a settlement agreement that could be worth as much as $26 billion if state and local governments agree.
Individual trials still exist, including one planned to begin in Cleveland in October on the role of pharmacies in the crisis. There have been other trials in California, New York and West Virginia this year, but no verdicts have yet been delivered.