Appeals court paves way for Purdue Pharma opioids settlement
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A federal appeals court Tuesday cleared the way for drug manufacturer Purdue Pharma to settle thousands of lawsuits regarding its role in fueling the opioid epidemic in the United States, reinstating a bankruptcy settlement that controversially shields from future claims the family members who own the company. Wp Get the full experience. Choose your plan ArrowRight The U.S. Court of Appeals for the Second Circuit greenlit a plan in which the Sackler family will pay up to $6 billion in settlement money to help ease the opioid crisis, while relinquishing control of the company. In the mid-1990s and early 2000s, the company manufactured and aggressively marketed OxyContin, the potent — and lucrative — opioid painkiller that helped spark the nation’s unprecedented addiction crisis.
Tuesday’s ruling comes as the nation continues to grapple with overdoses killing more than 100,000 Americans each year, most now from illicit fentanyl, not prescription painkillers. Drug manufacturers, distribution companies and pharmacy chains have faced waves of lawsuits, with proposed or final settlements tallying tens of billions of dollars — money that local and state governments are supposed to use to fight addiction and save lives.
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Following the lawsuits, Purdue Pharma filed for bankruptcy in 2019, while members of the Sackler family did not. In September 2021, New York U.S. Bankruptcy Judge Robert D. Drain approved a deal — supported by creditors — that called for the Sackler family to contribute more than $4 billion to the settlement while affording family members sweeping legal protections, angering critics.
The Department of Justice and nine states objected. Critics argued that the Sackler family, which had received more than $10 billion in payouts from the company, was getting protection without having to declare bankruptcy themselves. The Sacklers have said nearly half that sum went toward taxes. Then in December 2021, U.S. District Judge Colleen McMahon threw out the proposed settlement, saying the law did not allow the Sackler family members — who were not direct parties in the bankruptcy — to be released from legal claims stemming from the opioid crisis.
But the three-judge panel ruled Tuesday that the Sacklers could be shielded, despite not having declared bankruptcy. The court ruled the Sacklers needed to be shielded from future lawsuits to “ensure the fair distribution” of the settlement money.
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As part of further negotiations, the Sackler family agreed to pay up to $6 billion over 18 years to victims, survivors and governments, including states that had objected to the earlier deal. The Sackler family members had long insisted on shields from civil lawsuits in exchange for making payments toward the settlement.
Connecticut, which first sued Purdue Pharma in 2018 and objected to the original deal, said it still believes that the Sacklers were hiding behind the nation’s broken bankruptcy code “to escape justice and shield their blood money”
“Our settlement was both significant and imperfect — there will never be enough justice to match the depths of pain and suffering the Sackler family caused,” Connecticut Attorney General William Tong said in a statement Tuesday. “But we recognized that we had pushed this as far as we could, and that it was necessary to get communities, victims and their families the resolution and billions of dollars [of] funding desperately needed to save lives and fight the opioid epidemic.”
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Under the settlement, Connecticut will receive about $95 million, which will be used for opioid treatment and prevention, and to fund a survivors trust to help survivors of the epidemic.
The Justice Department on Tuesday declined to comment on the ruling, or say whether it plans to appeal. An appeal could be made to the Supreme Court.
Edward Neiger, an attorney who represents relatives of victims who could get payouts under the deal, called Tuesday’s decision a “milestone.” He urged DOJ not to appeal; the settlement includes $750 million for relatives of victims.
“We hope they react with reason and compassion and allow the victims to start getting compensated,” Neiger said.
One of his clients, Kathleen Scarpone, 61, of New Hampshire, lost her 25-year-old son, Joseph, to an opioid overdose seven years ago. She said Joseph, a former Marine sergeant, started taking OxyContin before his addiction turned to heroin. His fatal dose was laced with fentanyl.
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“I don’t care about the money. We need those funds on the ground,” Scarpone said. “Without those funds going into the abatement program, things are going to continue to spiral.”
Scarpone was one of a slew of family members who confronted the Sackler family last year during a virtual court hearing.
In 2020, Purdue Pharma pleaded guilty to three felonies and agreed to pay $8.3 billion as part of a settlement with the Justice Department. If the bankruptcy settlement goes through, the company would be reborn as a company with no involvement from the Sacklers.
In a statement Tuesday, Purdue Pharma said its mission now is to “deliver billions of dollars of value for victim compensation, opioid crisis abatement, and overdose rescue medicines.”
Relatives of the late brothers Mortimer and Raymond Sackler said in a statement they were pleased with the decision. “The Sackler families believe the long-awaited implementation of this resolution is critical to providing substantial resources for people and communities in need,” the statement said.
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Source: The Washington Post
