Purdue opioid settlement gets conditional approval
$10 billion plan would settle suits connected to OxyContin
A federal bankruptcy judge on Wednesday gave conditional approval to a sweeping, potentially $10 billion plan submitted by OxyContin maker Purdue Pharma to settle a mountain of lawsuits over its role in the opioid crisis that has killed a half-million Americans over the past two decades.
Under the settlement reached with creditors including individual victims and thousands of state and local governments, the Sackler family will give up ownership of the company and contribute $4.5 billion but will be freed from any future lawsuits over opioids.
The drugmaker will be reorganized into a new company with a board appointed by public officials and will funnel its profits into government-led efforts to prevent and treat opioid addiction.
Also, the settlement sets up a compensation fund that will pay some victims of drug addiction an expected $3,500 to $48,000 each.
U.S. Bankruptcy Judge Robert Drain said Wednesday after speaking from the bench for more than six hours that he would approve the plan as long as two technical changes were made. If so, he said, he will formally enter the decision Thursday.
He said before his ruling that although he does not have “fondness for the Sacklers or sympathy for them,” collecting money from them through litigation would be complicated.
The settlement comes nearly two years after the Stamford, Connecticut-based company filed for bankruptcy under the weight of about 3,000 lawsuits from states, local governments, Native American tribes, hospitals, unions and other entities. They accuse Purdue Pharma of fueling the crisis by aggressively pushing sales of its bestselling prescription painkiller.
The Sacklers were not given
immunity from criminal charges, although there have been no indications they will face any.
State and local governments came to support the plan overwhelmingly, although many did so grudgingly, as did groups representing those harmed by prescription opioids.
Nine states, Washington, D.C., Seattle and the U.S. bankruptcy trustee, which seeks to protect the nation’s bankruptcy system, opposed the settlement, largely because of the protections granted to the Sacklers. Some of them are expected to appeal.
Washington state Attorney General Bob Ferguson quickly announced he would appeal the plan, calling it inadequate.
The bankruptcy judge, based in White Plains, New York, had urged the holdouts to negotiate an agreement.
“Bitterness over the outcome of this case is completely understandable,” Drain 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.”
Most states have sued Purdue, claiming it aggressively marketed OxyContin, contributing to an opioid overdose and addiction epidemic that has been linked to more than 500,000 deaths in the U.S.