Tentative deal hit in opioid litigation

Purdue bankruptcy, payout in accord

HARTFORD, Conn. — OxyContin maker Purdue Pharma reached a tentative deal Wednesday with about half the states and with thousands of local governments over its role in the nation’s opioid epidemic, but criticism by several state attorneys general clouded prospects for an end to litigation against the company and the family that owns it.

The agreement would have Purdue file for a structured bankruptcy and pay as much as $12 billion over time, with about $3 billion coming from the Sackler family. That number involves future profits and the value of drugs currently in development. In addition, the family would have to give up its ownership of the company and contribute another $1.5 billion by selling another of its pharmaceutical companies, Mundipharma.

Several attorneys general said the agreement was a better way to ensure compensation from Purdue and the Sacklers than taking their chances if Purdue files for bankruptcy on its own.

Arizona Attorney General Mark Brnovich said the

deal “was the quickest and surest way to get immediate relief for Arizona and for the communities that have been harmed by the opioid crisis and the actions of the Sackler family.”

Opioid addiction has contributed to the deaths of about 400,000 Americans over the past two decades, hitting many rural communities particularly hard.

The lawsuits against Purdue of Stamford, Conn., say the company’s aggressive marketing of OxyContin downplayed addiction risks and led to more widespread opioid prescribing, even though only a sliver of the opioid painkillers sold in the U.S. were its products.

The tentative agreement and expected bankruptcy filing would remove Purdue from the first federal trial over the opioids epidemic, scheduled to begin next month in Ohio.

Even with Wednesday’s development, many states have not signed on. Several state attorneys general vowed to continue their legal battles against the company and the Sacklers. About 20 states have sued members of the Sackler family in state courts.

Connecticut, Massachusetts, Nevada, New York, Pennsylvania, North Carolina and Wisconsin are among the states saying they were not part of the agreement.

“Our position remains firm and unchanged and nothing for us has changed today,” Connecticut Attorney General William Tong said in a statement.

New York Attorney General Letitia James accused the Sacklers of “attempting to evade responsibility and lowball the millions of victims of the opioid crisis.”

Arkansas Attorney General Leslie Rutledge’s spokeswoman, Amanda Priest, declined to say whether Rutledge’s office was a part of the proposed settlement, calling such discussions “highly, highly confidential.”

Rutledge sued Purdue Pharma in Pulaski County early last year. The drug company has also faced lawsuits by the Arkansas Association of Counties and the Arkansas Municipal League in both state and federal courts. Around the same time Rutledge filed her lawsuit against Purdue and two other drugmakers in March 2018, a coalition of 87 separate cities and counties across the state filed a lawsuit in Crittenden County against a host of opioid-makers — including Purdue — alleging that the companies created a “marketing scheme” to entice doctors to prescribe the drugs despite their addictive risks.

“There is no settlement in Arkansas on any of the cases,” said Arkansas Association of Counties Executive Director Chris Villines. “I do think the ball is beginning to roll.”

About 2,000 lawsuits lodged by local governments, American Indian tribes, unions and hospitals have been consolidated under a federal judge in Cleveland, who has been encouraging the parties to settle. U.S. District Judge Dan Polster invited state attorneys general, who had filed their own lawsuits, to lead the negotiations.

How any money from the proposed settlement will be divided among all the entities is not entirely clear. Nevertheless, the attorneys representing the local governments issued a statement saying they recommended the governments agree to the deal as a way to bring relief to their communities.

There was no immediate response from Purdue, and attempts to reach members of the Sackler family were not immediately successful.

In March, Purdue and members of the Sackler family reached a $270 million settlement with Oklahoma to avoid a trial on the toll of opioids there.