Sept. 2, 2021 -- A judge says he’s ready to approve a complex settlement involving Purdue Pharma, the pharmaceutical giant that manufactured the highly addictive prescription drug OxyContin, and scores of public and private entities that sued the company.
In the most controversial point of the settlement, the Sackler family, which owns the company, would largely be shielded from any future lawsuits over opioids, The New York Times reported.
Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, NY, described the settlement during a hearing Wednesday and said he was prepared to approve it with two small changes, the Times reported.
The settlement could ultimately provide $10 billion to fight the opioid crisis that has killed about half a million people in the United States alone. Thousands of lawsuits filed against Purdue by local and state governments, hospitals, Native American tribes, and individuals would be settled and payments would be made to opioid victims or their families
The settlement would require the Sackler family to remove itself from ownership of the company and hand over about $4.5 billion for treatment programs.
Purdue Pharma would be organized into a new company with a board appointed by public officials. The company would have no ties to the Sacklers, and profits would go toward drug treatment programs.
Purdue Pharma came under scrutiny for the way it aggressively marketed OxyContin, an addictive painkilling medication. The CDC says about 500,000 people have died from opioid overdoses between 1999-2019, with some of those deaths attributed to OxyContin and others to other opioids like heroin and fentanyl, and other prescription painkillers.
The lawsuit protection given to the Sacklers drew sharp criticism because it would allow the family to retain much of its wealth. Last spring, the U.S. House Committee on Oversight and Reform investigated the Sacklers and OxyContin and estimated the family fortune to be worth around $11 billion.
The Times said that these kinds of protections are usually given to companies emerging from bankruptcy, not necessarily company owners who have not filed for bankruptcy themselves.
Several plaintiffs said they’ll appeal the ruling.
“This decision is a slap in the face to the millions of suffering and grieving Americans who have lost their lives and loved ones due to the Sacklers calculated and craven pursuit of opioid profits,” Connecticut Attorney General William Tong said in a statement.
A statement from the Sackler family noted the settlement does not involve a finding of wrongdoing nor an admission of liability by any member of the family.
“We want to express our determination to make a constructive difference through this resolution,” the statement said. “While we dispute the allegations that have been made about our family, we have embraced this path in order to help combat a serious and complex public health crisis. We hope that the resolution will signal the beginning of a far-reaching effort to deliver assistance where it is most needed.”
Drain acknowledged problems with the settlement.
“Bitterness over the outcome of this case is completely understandable,” he said. “But one also has to look at the process and the issues and risks and rewards and alternatives of continued litigation versus the settlement laid out in the plan.”
A proposed $26 billion settlement on opioid-related lawsuits was reached with four large drug companies -- Johnson & Johnson, Cardinal Health, AmerisourceBergen, and McKesson -- a group of state attorneys general announced last July.