Judge Conditionally Approves Purdue Pharma Opioid Settlement


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A federal bankruptcy judge on Wednesday gave conditional approval to a sweeping settlement that will remove the Sackler family from ownership of OxyContin maker Purdue Pharma and potentially spend $ 10 billion in tackling the opioid crisis that has killed a half -million Americans over the past two decades.

If it stands up to calls, the deal will resolve a mountain of 3,000 lawsuits filed by state and local governments, Native American tribes, labor unions and others who accuse the company of helping spark the overdose epidemic in aggressively marketing the prescription pain reliever.

Under the settlement, the Sacklers will have to completely withdraw from the opioid business and contribute $ 4.5 billion. But they will be safe from any future opioid lawsuits.

The drugmaker itself will be reorganized into a new charitable corporation with a board of directors appointed by officials and will direct its profits to government-led efforts to prevent and treat drug addiction.

In addition, the settlement establishes a compensation fund that will pay some drug victims between $ 3,500 and $ 48,000 each.

After a day of court hearings in which he analyzed the pros and cons of the plan for 6.5 hours non-stop, U.S. bankruptcy judge Robert Drain said he would approve it as long as two changes relatively minor were made. If so, he said, he will officially render the decision on Thursday.

He said that even if he had “no affection for the Sacklers and no sympathy for them,” it would be difficult to raise money from them through lawsuits instead of settlement. .

The deal comes nearly two years after the Stamford, Connecticut-based company filed for bankruptcy under the weight of lawsuits.

Under the deal, the Sacklers have not been granted immunity from criminal charges, although there is no indication that they will face it.

State and local governments have come overwhelmingly, if not reluctantly in many cases, to support the plan. But nine states and others had opposed it, in large part because of the protections afforded to the family.

Connecticut, District of Columbia and Washington state attorneys general immediately announced they would appeal the ruling or explore the possibility of doing so.

The Sacklers “should not be allowed to manipulate bankruptcy laws to evade justice and protect money with their blood,” said William Tong of Connecticut.

Some families who have lost loved ones to drugs have also spoken out against the settlement, including Ed Bisch, of Westampton, New Jersey, whose 18-year-old son died of an overdose almost 20 years ago. . “The Sacklers buy their immunity,” he said.

But other families have said they don’t want to risk losing the money that will go to treatment and prevention.

“If they gave me a million dollars, would that help bring my son back?” Said Lynn Wencus, of Wrentham, Massachusetts. “Let’s help the people who are truly struggling with this disease. “

In a statement, members of the Sackler family said: “While we dispute the allegations that have been made about our family, we have taken this path in order to help fight a serious and complex public health crisis. . “

Purdue Chairman Steve Miller said the settlement avoids “years of value-destroying litigation” and “ensures billions of dollars will be spent helping the people and communities that have been affected by the opioid crisis.” .

The bankruptcy judge, based in White Plains, New York, had urged holdouts to strike a deal for the same reason.

“The bitterness over the outcome of this case is completely understandable,” said Drain. “But it is also necessary to examine the process, the problems, the risks, the advantages and the alternatives of a continuing litigation compared to the settlement foreseen in the plan.”

Some of the opioid-related deaths over the past two decades have been attributed to OxyContin and other prescription pain relievers, but most are due to illicit forms of opioids such as heroin and illegally produced fentanyl . In the United States, opioid-related deaths continued at a record pace last year, reaching 70,000.

The crisis has devastated the reputation of the Sackler family, great philanthropists whose names were once carved on the walls of museums and universities around the world. With the settlement, family members who owned the business will still be worth billions. Another branch of the Sackler family has had no relationship with Purdue for decades.

Whether the deal holds the Sacklers sufficiently accountable was the most contentious issue in the proceedings. These lawsuits succeeded in increasing the amount the Sacklers would likely pay by $ 3 billion.

David Sackler, a former Purdue board member, had testified that family members would not agree to the deal unless it shielded them from lawsuits. Otherwise, he said, the family would defend themselves in litigation that could last for years and eat away at company and family assets in attorney fees.

His father, Richard Sackler, former chairman and chairman of the board of Purdue, said during questioning that he, his family and the company were not responsible for the opioid crisis.

Drain noted that none of the four Sacklers who testified offered an explicit apology. “A forced apology isn’t really an apology, so we’ll have to live without it,” he said.

The judge called for two somewhat technical changes to the plan: one specifying that members of the Sackler family would only be protected against lawsuits involving opioids, and the other on how to file a complaint against them without opioids. .

A projection commissioned by a group of attorneys general found that the family’s wealth could rise from the current estimate of $ 10.7 billion to more than $ 14 billion by 2030 despite the required payments. That’s because the family could continue to benefit from the returns on investment and interest as they pay their decade-long progressive contributions under the deal.

Lawyers for Purdue and branches of the Sackler family took issue with the assumptions used in the projection.

The settlement also requires members of the Sackler family, who are scattered across the United States, Britain and elsewhere in Europe, to withdraw from the opioid trade around the world.

Several attorneys general have won another provision that will create a vast public repository of company documents, including those that would normally be protected by solicitor-client privilege.

Purdue said the settlement would total around $ 10 billion, which includes the value of the drug treatment and overdose antidotes it develops.

The bankruptcy case is not the first time that Purdue has faced legal issues regarding the marketing of its pain relievers.

The company pleaded guilty in 2007 to federal charges, misled regulators and others about the dangers of OxyContin addiction, and agreed to pay more than $ 600 million in penalties.

Last November, in a settlement with the US Department of Justice, Purdue pleaded guilty to conspiring to defraud the United States and violating anti-recoil laws.

The Purdue bankruptcy has been the most high-profile case in a complicated world of opioid litigation.

Drugmaker Johnson & Johnson and America’s three largest drug distribution companies recently announced a settlement that could be worth up to $ 26 billion if state and local governments agree.

Individual trials also remain, including one set to begin in October in Cleveland on the role pharmacies played in the crisis. More trials have taken place this year in California, New York and West Virginia, although verdicts have yet to be rendered.


Associated Press writer John Seewer in Toledo, Ohio, contributed to this report.

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