Several members of the billionaire Sackler family and their company, Purdue Pharma, have reached an agreement with a group of states that had long opposed the company’s bankruptcy plan, according to a court filing on Thursday. The agreement is a critical step toward funnelling billions of dollars from the family’s fortune to addiction treatment programmes across the country.
In exchange for approving the settlement, the Sacklers would pay up to $6 billion to assist communities deal with the consequences of the opioid epidemic. Judge Robert Drain, who has ruled over Purdue’s bankruptcy proceedings in White Plains, New York, had already approved the accord. It would be in exchange for this that the Sackler family would get the prize they had been clamouring for for over three years: an end to all present and future legal lawsuits brought against them in connection with the company’s prescription opioid business.
The settlement agreement with Purdue Pharma and the Sackler family may still face legal challenges, but it is the first time in three years of discussions that all states have agreed to a settlement agreement with the company and the Sackler family. The Sacklers would be required to pay an additional sum of at least $1 billion under the terms of the new deal. As well as contributing with cash and earnings from future sales, Purdue is also making contributions, with payments estimated to total $1.5 billion by 2024 and much more to come in the future.
The agreement represents a watershed moment in the national opioid litigation, which is an effort by state, local, and tribal governments to hold companies across the vast pharmaceutical industry accountable for the opioid addiction crisis, which has resulted in at least 500,000 deaths since 1999 and is still growing.
Many other settlement negotiations in the national case have come to a halt due to disagreements over money and the refusal of firms to admit any responsibility. Despite the fact that Purdue has pled guilty twice to federal charges related to false marketing and reducing the danger of addiction linked with OxyContin, the Sacklers have always claimed that they operated ethically and with integrity. Dr. Richard Sackler, a former president and co-chairman of the board of directors of Purdue, testified before Judge Drain in August that neither the Sackler family, nor the corporation or its products were to blame for the opioid crisis.
The opioid epidemic started to wreak havoc throughout the nation in the late 1990s, and two branches of the Sackler family, whose forefathers, along with another branch, formed the privately held corporation in the 1950s, reigned in different leadership capacities at Purdue over the course of the next two decades. The corporation collaborated with a group of experts who appeared at medical conferences, praising OxyContin for being both safe and effective in their respective fields. Even though a slew of competing opioids quickly flooded the market, OxyContin stood out for two reasons: the no-holds-barred aggressiveness of Purdue’s sales staff and the drug’s overwhelming market domination.
States, local governments, tribes, and individuals had previously approved a $4.55 billion settlement proposal from the Sacklers, which included a $225 million settlement with the federal government. The Sacklers’ earlier settlement proposal had received overwhelming support from state, local governments, tribes, and individuals. However, in December, a federal court threw down that plan, challenging the constitutionality of the safeguards from responsibility offered to the Sacklers and the Sackler Foundation. In most cases, the corporate bankruptcy statute provides protection from litigation for the firm that is seeking reorganisation; however, it is uncommon for the company’s owners to also get this protection if they did not file for personal bankruptcy at the same time as the company.
Purdue will be called Knoa Pharma and would be governed by a public board of directors under the proposed restructuring. When Knoa reorganised and became a public benefit business, it would give monies to the plaintiffs’ programmes as well as more as it expanded into a maker of pharmaceuticals for addiction reversal and treatment, as well as other products, like OxyContin.
Overdoses increased dramatically during the epidemic, as long sessions of discussions stretched on for weeks at a time. The decision for the holdout countries was whether to continue chasing the Sacklers in court, a procedure that might take years with no assurance of success, or whether to just accept the money, which had grown in value as a result of the higher cash offer.
“At the very least, the $750 million is being safeguarded, which is better than no money at all,” said Ryan Hampton, who has been following the proceedings on behalf of families afflicted by the opioid crisis for many years. This bankruptcy must be brought to an end. Also necessary is for the Justice Department to show some muscle and conduct a criminal investigation against the Sacklers, which is permitted under the bankruptcy arrangement.”