Activists see Purdue bankruptcy case as last chance to call Sacklers to account
With most Americans transfixed for months by the election, Donald Trump’s impeachment, the coronavirus and economic catastrophes and antiracism protests, the nation’s opioids crisis risks becoming “the forgotten epidemic”.
But millions of people continue to struggle with painkiller addiction or recovery efforts amid the Covid-19 pandemic, while billions of dollars and – as important to many – a sense of justice are at stake in huge legal battles still raging between opioid victims and “big pharma”.
Now activists who lost loved ones, battled addiction or almost died of opioid overdoses themselves are focused on what could be a final opportunity to hold a key pharmaceutical company and its billionaire owners to account.
Lawyers and campaigners are battling in the $10bn case in a New York bankruptcy court of Purdue Pharma, the US manufacturer of the prescription painkiller OxyContin, which is accused of fueling the opioids crisis that has killed more than 450,000 Americans in the last 20 years.
The company seeks a modest settlement, paying out to states, cities and individuals harmed by opioids, in return for an end to coast-to-coast legal action. And it wants to shield Purdue’s executives, and multibillionaire owners within the Sackler family, from future government litigation – while also resolving a Department of Justice criminal investigation.
As the case lengthens, the costs of Purdue’s legal representation to the court are mounting. By April, the seventh month since the company filed for chapter 11 bankruptcy protection, its legal team (Skadden, Arps, Slate, Meagher & Flom) had submitted $1,420,799 in fees and expenses to the court.
In a filing with bankruptcy court last week, lawyers for a group of activists, including the American art photographer Nan Goldin, claimed that the pharmacy chain CVS “may have acted in concert with Purdue to injure creditors” – while itselfregistering as a creditor.
This despite CVS being named among defendants in a huge opioids civil case in Ohio, where it is accused of working in partnership with Purdue to offer questionable seminars on pain management to its pharmacists.
And Dan Schneider, a campaigner against the overprescription of opioid painkillers, who starred in the Netflix documentary The Pharmacist, informed the court that it was “reprehensible” that health insurance companies listed as creditors, including Blue Cross Blue Shield, are seeking a large claim to funds.
“Funds awarded should go to support individual victims and mechanisms that should be used to abate the crisis that Purdue helped create,” Schneider wrote.
Opponents of Purdue’s bankruptcy settlement argue that the public deserves to know exactly what role the Sacklers played in the opioids public health crisis and how much profit insiders stripped from Purdue before cloaking it in bankruptcy protection last fall. If they never stand trial there are efforts at least to force a broader airing of allegations.
“The goal of this bankruptcy seems to be to prevent the discovery and publication of meaningful information about the role the Sacklers played,” Jonathan Lipson, a professor of law at Temple University in Philadelphia, told the Guardian. In a letter to the court last year, co-signed by 20 other bankruptcy law experts, Lipson called on Judge Robert Drain, presiding over the bankruptcy case in White Plains, New York, which has to approve any settlement deal, to appoint an independent examiner to the case.“Bankruptcy is about getting creditors and the debtor to reach a compromise, but in this case you’ve got problems no amount of money can address. There’s a very real concern that without an independent examiner people will say the Sacklers used the process to hide evidence of wrongdoing,” Lipson added.
And the Wisconsin senator Tammy Baldwin has written to the judge asking him to lift the injunction shielding the Sacklers from legal action during the bankruptcy process, saying: “Wisconsin and other states need to investigate the Sackler family.”
Purdue and eight members of the Sackler family had already been sued (although two have since died, matriarch Beverly Sackler last year and her son Jonathan on 30 June), including allegations that “eight people in a single family made the choices that caused much of the US opioid epidemic” via a “deadly, deceptive … illegal scheme”.
The company and family deny all the allegations, but had been named alongsideother opioids manufacturers, pharmaceutical distributors and pharmacy chains as defendants in lawsuits, not only in the huge case that’s combined more than 2,000 civil suits by US county, city and tribal governments into one federal case in Ohio, but also in suits brought by almost all state attorneys general.
Those cases against Purdue and the Sacklers were halted by an initial injunction from the bankruptcy court, since extended. Plaintiffs in those lawsuits are split, some supporting some opposing and arguing against the $10$12n bankruptcy settlement and corporate restructuring offer now being thrashed out in White Plains.
Senator Baldwin complained in her letter: “The Sackler family is not bankrupt. In fact, they made billions of dollars through their ownership of Purdue and its decades-long deceptive marketing campaign for addictive opioids.”
Baldwin has asked the court “to remove the Sackler family from the injunction and allow them to be held accountable for their actions”.
She added: “Today we find ourselves in the midst of another public health crisis, this time from coronavirus. State health and safety budgets, which have yet to recover from the opioid crisis, will be strained further by the demands placed on them by this pandemic.”
While the greater part of the offer by Purdue is focused on restitution to state and local authorities, as of late May, approximately 6,800 personal-injury claim forms had also been filed, according to records seen by the Stamford Advocate. And more than 27,000 new individual claims are pending, according to lawyers. Judge Drain recently extended the deadline for such claims to the end of July.
And the campaign group led by Goldin has entered documents into the court’s docket , linking Purdue to a kickback scheme involving medical records company Practice Fusion, which admitted in January encouraging doctors to overprescribe opioids and receiving a $1m payment from “Pharma Co X”, later named as Purdue Pharma.
San Francisco-based Practice Fusion, now owned by AllScripts, agreed to pay $145m in fines to resolve federal criminal and civil allegations that it solicited and received kickbacks from the drugmaker in exchange for embedding alerts in physicians’ software to boost sales of their products.
The records firm “targeted” patients via their doctors with software that triggered a drop-down menu on doctors’ computer screens, prompting them to assess a patient’s level of pain and suitability for pain medication.
Pharma Co X was identified by media outlets as Purdue based on language used in DoJ documents, and those details have also been submitted to the bankruptcy court by Goldin’s campaign. One of the investigators on the case described the scheme as “abhorrent”, although Purdue itself was not accused of wrongdoing.
While representatives for Purdue declined to comment on the Practice Fusion case, the company is estimated to have gained almost 3,000 extra customers and between $8m and $11m in additional revenue over a three-year period, according to the Statnews website.
“The companies illegally conspired to allow the drug company to have its thumb on the scale at precisely the moment a doctor was making incredibly intimate, personal, and important decisions about a patient’s medical care,” Christina Nolan, US attorney for the district of Vermont, commented at the time of the settlement.
Goldin became a campaigner against Purdue and its Sackler family owners’ academic and arts philanthropy after surviving a dependency on OxyContin and a near-fatal overdose of fentanyl, the drug that killed music star Prince. She has filed a personal injury claim against Purdue and said in a statement: “We want the truth of their deadly schemes revealed in full to the American people.”
She warned: “The bankruptcy proceedings will bring no justice to those who have lost their loved ones or have suffered the mean reality of addiction if the Sacklers do not admit culpability.”
Judge Drain has ruled that the patients Practice Fusion’s kickback scheme targeted do not have to be notified because they are not “reasonably ascertainable”.
That, campaigners say, could mean that people affected will not be alerted to the possibility that they were inappropriately prescribed opioids.
“The patients Purdue targeted will never know that Purdue interfered with their medical care,” Michael Quinn, counsel to the the group of plaintiffs led by Goldin, told the Guardian. “Those people deserve to know. If the bankruptcy court is unable to expose the truth, then Congress ought to do what it did in the tobacco cases and hold hearings for the world to see.”
Meanwhile, the National Institute on Drug Abuse, the federal research body, warned: “Individuals with a substance use disorder are more likely to experience homelessness or incarceration than those in the general population, and these circumstances pose unique challenges regarding transmission of the virus that causes Covid-19.”
The bankruptcy case continues.