The Register Citizen (Torrington, CT)
Purdue cases won’t lead to longterm payouts
When you think about the lawsuits and ongoing talks with Purdue Pharma and other makers and distributors of opioid painkillers, consider the immense tobacco settlement.
Connecticut state coffers hauled in another load of cash this year through the master tobacco settlement of 1998: $124,507,709.65, to be exact.
In all, since the tobacco cash started flowing in 2000, Connecticut’s share has tallied almost $2.5 billion in combined annual paydays. In theory at least, this will go on forever. That’s almost definitely more than the state would harvest from fully legalized marijuana.
All states combined have collected well over $130 billion so far, with Connecticut claiming an outsized share because thenstate Attorney General, now U.S. Sen. Richard Blumenthal was a ringleader among plaintiffs.
Now, state Attorney General William Tong is playing a key role in the Purdue Pharma battles — which Blumenthal also fought, more than a decade ago. And that raises the question: When and if Connecticut and other states realize a settlement of the opioid crisis with Stamfordbased Purdue Pharma, maker of OxyContin, why not a longterm, openended payout?
It appears we’re not going to see a perennial, longterm payout, according to
Tong and others involved in the cases, and from what I can tell from media reports.
Still, conditions might seem to favor such a scheme. Here we have a multibilliondollar industry defending lawsuits by almost every state and more than 2,000 municipalities. Players in the industry stand accused of unfair trade practices, fraudulent marketing and other offenses that might rise to criminal convictions.
What’s more, like the tobacco industry, the opioid business appears likely to flourish and make lots of money indefinitely, all the more because — unlike tobacco — opioid painkillers do have a legitimate health purpose.
The Purdue Pharma cases are all the stronger because of litigation against Purdue Pharma more than a decade ago.
In 2007, the U.S. Department of Justice settled a criminal case against Purdue Pharma and three of its top executives for $600 million, though, unfortunately, no prison time. Blumenhthal coled a group of 26 states that won a smaller, $19 million settlement from Purdue Pharma in 2009, and later sued the U.S. Food and Drug Administration for failing in its duty to regulate OxyContin.
The latest round of lawsuits, including Tong’s, filed this past spring, allege that many similar improper and illegal practices carried on for years after those cases.
So why not seek a perpetual payout?
“I don’t think this is a perfect analog to tobacco,” Tong explained. “People’s standards are different.”
Again and again, Tong returned to the idea that the cases are bigger than whatever cash will come out of them for Connecticut and the other plaintiffs.
“This is not about money, this is about justice,” he said. “If you accept that the right question is how do you get the most money from the stone, then that leads to one conversation or set of outcomes . ... I think the right question is what is the most just outcome that provides the most resources for addiction treatment and prevention?
And that, he said, includes going after Purdue Pharma and the Sackler family, which owns the company, aggressively. It does not mean negotiating with the goal of leaving a strong and financially healthy Purdue Pharma just so it can pay us back for hundreds of thousands of adiction deaths.
“Many people in the general public, particularly people who have lost someone to addiction or from opioid use disorder, they want to see people go to jail. They want to see Sacklers go to jail,” Tong said.
The lawsuits by states and municipalities are civil, not criminal, but the allegations could lead to criminal charges eventually.
Clearly, the money totals in this legal war are far lower than the $250 billionplus the Big Four tobacco companies and some 50 other cigarette industry companies will pay out over three decades and beyond. Purdue Pharma and the Sacklers have offered at least $3 billion in cash, plus the proceeds of the sale of their international businesses, plus opioid addiction treatment drugs free of charge for years to come.
The Sacklers also bargained to exit the business and leave Purdue Pharma as some sort of public trust, with unclear benefits to we the people.
Connecticut is among about half the states that have rejected that offer, which the company has valued at at least $10 billion — a figure that makes Tong scoff.
One big difference between this and the tobacco cases of the ’90s is that in the tobacco cases, the companies acted more or less the same over the decades, and the allegations applied equally to most or all of them. In opioids, Purdue Pharma is accused of actions that don’t apply to, say, Johnson & Johnson, another large maker of addictive painkillers.
And another difference: Purdue Pharma has filed for bankruptcy protection, which complicates matters. And yet another, Tong points out: The patent for OxyContin expires in 2023, and that could mean the asset value drops significantly.
“Whatever the recovery is, it has to in some way reflect the gravity of the misconduct, the pain and the damage that they’ve inflicted on Connecticut and on people across the country, and also reflect a clawing back of the money they took out of the company,” Tong said.
How much was that? We don’t know, but it’s in the billions.
Blumenthal isn’t secondguessing Tong and the other attorneys general. Multiyear payouts such as the tobacco settlement are unusual and the circumstances may not line up in the opioid cases. There were not thousands of municipal cases against the tobacco companies and the states remained united, Blumenthal said.
“Different product, different companies, different plaintiffs, different times,” he said.
The goal was not to keep the tobacco companies alive and well so they could make payments. But Blumenthal said, “They were not going to agree to a settlement that shut them down, and nor could we.”
That included a potential ban on tobacco, which, Blumenthal recalled, was not viable in the eyes of public health officials then, or now. And so the companies, some in restructured form, carried on to make payments we’re still seeing.
“Blumenthal said of Tong, a fellow Democrat from Stamford, “I admire him and his colleagues for hanging tough and demanding larger settlements as he is doing.”
Larger, Tong insists, under the right conditions. “I don’t think anybody would trade payments for lives.”