Opioid maker agrees to deal
Maryland AG one of several to criticize tentative settlement
HARTFORD, CONN. – A tentative settlement announced Wednesday over the role Purdue Pharma played in the nation’s opioid addiction crisis falls short of the far-reaching national settlement the OxyContin maker had been seeking for months, with litigation sure to continue against the company and the family that owns it.
Several state attorneys general, including Maryland Attorney General Brian Frosh, criticized the proposed settlement as inadequate.
After calling it “insufficient,” Frosh said Maryland will not agree to the terms.
“Here, we have the people who owned and operated Purdue Pharma, who left a trail of addiction and death in Maryland and throughout the country and they’re literally not going to write a check to get out of this,” Frosh said.
The city of Baltimore is not part of the settlement, but Anne Arundel County is participating, officials said Wednesday.
The agreement with about half the states and attorneys representing roughly 2,000 local governments 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 called the deal “the quickest and
surest way to get immediate relief” for communities harmed by the opioid crisis.
Maryland and more than two dozen cities and counties in the state have sued opioid makers, distributors and others over the mounting overdose fatalities and costs associated with treatment and prevention. Some sued in federal court while the state’s and Baltimore’s cases were filed in state courts. Talk of an umbrella settlement similar to those reached with tobacco companies has been simmering for some time.
Overdose deaths in the state exceeded 2,300 in 2018, with the majority attributed to opioids, according to the state Department of Health.
While deaths linked to prescription opioids have declined and those from heroin and the powerful synthetic opioid fentanyl have surged, health officials still say many people’s substance use disorder began by with the use of legally prescribed opioids.
In May, Maryland joined four other states in filing charges against the owners and former directors of Purdue Pharma, saying the company engaged in a pattern of deceptive conduct, encouraging inappropriate use of opioid painkillers and fueling the opioid crisis.
Frosh said the Sackler family’s $3 billion would be paid using foreign assets, not cash, essentially putting profits from foreign assets owned by the family into a pool that would help pay for the settlement.
“They’re saying ‘We’ll throw our foreign assets into the pot and we’ll guarantee that they’ll bring $3 billion,’” Frosh said.
Maryland’s top attorney said he doesn’t believe the Sacklers are contributing enough and that, while the state is still open to a settlement, Maryland likely will continue to pursue its own lawsuit unless halted by the courts.
“There has to be some significant accountability and this just doesn’t cut it for us,” Frosh said.
Baltimore also is not part of the settlement reached Wednesday, according to Suzanne Sangree, an attorney for the city. The city sued Purdue Pharma and others in the city’s Circuit Court last year and the settlement involves the multi-district federal litigation, she explained.
Anne Arundel County officials are involved in the settlement, said Chris Trumbauer, a former county councilman who now serves as a senior adviser to County Executive Steuart Pittman.
The county sued Purdue Pharma and other companies in the opioid industry in January 2018 amid record fatal overdose numbers.
A spokesperson for Annapolis, which sued Purdue Pharma and others in February, said the city is not involved in any settlement at this point.
Jonathan Novak, an attorney with Dallas-based Fears Nachawati, which is representing 18 local governments in the state, also did not respond to messages seeking comment.
In anticipation of a settlement, the Maryland General Assembly passed legislation creating an opioid restitution fund and directing how officials spend any revenue recovered by the state, said Del. Sandy Rosenberg, a Baltimore Democrat who sponsored the bill. He said spending is authorized for improving access to the overdose antidote Naloxone, expanding access to crisis beds and residential treatment services, organizing school education campaigns, enforcement of laws related to opioid prescriptions and sales, and supporting and expanding other substance use treatment and prevention programs.
But even as news of the settlement spread Wednesday, attorneys general from New York, Connecticut, Pennsylvania and other states vowed to continue their legal battles against the company and the Sacklers
New York Atty. Gen. Letitia James accused the Sacklers of “attempting to evade responsibility and lowball the millions of victims of the opioid crisis.”
“Adeal that doesn’t account for the depth of pain and destruction caused by Purdue and the Sacklers is an insult, plain and simple,” James said in a statement. “As attorney general, I will continue to seek justice for victims and fight to hold bad actors accountable, no matter how powerful they may be.”
New York is among the states that joined Maryland in filing charges against the companies, their owners and directors.
Connecticut Atty. Gen. William Tong said in a statement that nothing has changed with proposed settlement and the state would continue to pursue Purdue if it files for bankruptcy.
“The scope and scale of the pain, death and destruction that Purdue and the Sacklers have caused far exceeds anything that has been offered thus far,” Tong said.
Pennsylvania Attorney General Josh Shapiro called the tentative deal “a slap in the face to everyone who has had to bury a loved one due to this family’s destruction and greed.”
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.
The lawsuits assert that Purdue aggressively sold OxyContin as a drug with a low risk of addiction despite knowing that wasn’t true.
There was no response Wednesday from Purdue, and attempts to reach members of the Sackler family were not successful. In court filings, Purdue has argued its products were approved by federal regulators and prescribed by doctors.
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.
A court filing made public in Massachusetts this year asserts that members of the Sackler family were paid more than $4 billion by Purdue from 2007 to 2018. Much of the family’s fortune is believed to be held outside the United States, which could complicate lawsuits against the family over opioids.
The Sacklers, the controlling family of Stamford, Conn.-based Purdue Pharma, would give up control of the firm.