About half of the 2,600 states have not signed onto the tentative deal. Several of them plan to object to the settlement in bankruptcy court and continue litigation in other courts against members of the Sackler family, who owns the company.
Under siege Purdue Pharma, the drug maker that made billions of dollars selling the prescription painkiller OxyContin, filed for bankruptcy in White Plains, New York, after reaching a tentative settlement with many state and local governments suing it over the human toll of opioids in the US.
“This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation,” Steve Miller, chairman of Purdue’s board of directors, said in a statement, “and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis. We will continue to work with state attorney generals and other plaintiff representatives to finalise and implement this agreement as quickly as possible.”
In 2007 Purdue Pharma paid out one of the largest fines (US$600 million) levied against a pharmaceutical firm for mislabeling its product OxyContin. Three executives – President Michael Friedman, company lawyer Howard R. Udell and former chief medical officer Paul D. Goldenheim – were all found guilty of criminal charges.
AP News reported that the Stamford, Connecticut-based Purdue Pharma is still defending itself in lawsuits from 2,600 government and other entities. About half the states have not signed onto the tentative deal. Several of them plan to object to the settlement in bankruptcy court and to continue litigation in other courts against members of the Sackler family, who owns the company. The family agreed to pay at least US$3 billion in the settlement plus contributions from the company itself, which is to be reformed with its future profits going to the company’s creditors.
The families of late company owners Mortimer and Raymond Sackler said in a statement that they have “deep compassion for the victims of the opioid crisis” and believe the settlement framework “is an historic step toward providing critical resources that address a tragic public health situation”.
The bankruptcy plan absolves the company of guilt, legally.
Miller said the company has not admitted wrongdoing and does not intend to.
“The alternative is to not settle but instead to resume the litigation,” he said in a conference call with reporters. “The resumption of litigation would rapidly diminish all the resources of the company and would be lose-lose-lose all the way around. Whatever people might wish for is not on the table now.”
Sackler family members said they are still trying to get more states to agree to the deal
“We are hopeful that in time, those parties who are not yet supportive will ultimately shift their focus to the critical resources that the settlement provides to people and problems that need them,” they said.
Court filings state that members of the Sackler family were paid more than US$4 billion by Purdue from 2007 to 2018. Much of the family’s fortune is believed to be held outside the US.
A court filing by the New York Attorney General’s office on Friday (local time) contended that Sackler family members used Swiss and other hidden accounts to transfer US$1 billion to themselves. The discovery of the transfers bolster several states’ claims that family members worked to shield its wealth because of the growing legal threats against them and Purdue.
Since OxyContin, a time-released opioid, was introduced in 1996, addiction and overdoses have surged in the US. In both 2017 and 2018, opioids were involved in more than 47,000 deaths, according to the U.S. Centres for Disease Control and Prevention. In recent years, there have been more deaths involving illicit opioids, including heroin and fentanyl, than the prescription forms of the drugs.