Opi­oid maker cuts ten­ta­tive set­tle­ment deal

Agree­ment would give bil­lions to states, cities; some say it’s not enough.

The Atlanta Journal-Constitution - - FRONT PAGE - By Aaron Davis, Lenny Bern­stein, Joel Achen­bach and Scott Higham

HARTFORD, CONN. — Pur­due Pharma, man­u­fac­turer of painkiller OxyCon­tin, has reached a ten­ta­tive set­tle­ment with 22 states and more than 2,000 cities and coun­ties that sued the com­pany over its role in the opi­oid cri­sis of the past two decades, sev­eral peo­ple close to the deal said Wed­nes­day.

The ex­ec­u­tive com­mit­tee of lawyers rep­re­sent­ing cities, coun­ties and other groups in a fed­eral law­suit against Pur­due and other drug com­pa­nies is rec­om­mend­ing the deal be ac­cepted.

But some state at­tor­neys gen­eral, who sued Pur­due and its own­ers, the Sack­ler fam­ily, in state courts are still op­posed to a deal.

Un­der terms of a plan ne­go­ti­ated for months, the Sack­lers would re­lin­quish con­trol of Stam­ford, Con­necti­cut-based Pur­due Pharma.

The com­pany would de­clare bank­ruptcy and be res­ur­rected as a trust whose main pur­pose would be to com­bat the opi­oid epi­demic.

If the deal be­comes fi­nal, it would be the first com­pre­hen­sive set­tle­ment in the broad le­gal ef­fort to hold drug com­pa­nies ac­count­able for their role in the opi­oid epi­demic. To date, Pur­due has also set­tled with one state, Oklahoma, for $270 mil­lion, and won a vic­tory when a North Dakota judge threw out the state case against the com­pany.

The deal also would mark the end of Pur­due, the com­pany widely blamed for its role in driv­ing the pre­scrip­tion opi­oid epi­demic as it spread in the late 1990s and the first years of this cen­tury. In 2007, Pur­due and three of its ex­ec­u­tives pleaded guilty to crim­i­nal charges of mis­lead­ing doc­tors and the pub­lic about the safety of OxyCon­tin and paid a $635 mil­lion fine.

On Wed­nes­day, the di­vide over the set­tle­ment broke down largely along party lines, with most Repub­li­can state at­tor­neys gen­eral in fa­vor of it and Democrats largely op­posed.

Penn­syl­va­nia’s Demo­cratic at­tor­ney gen­eral, Josh Shapiro, who tried to ne­go­ti­ate a set­tle­ment he could ac­cept, op­poses the fi­nal deal and has vowed to sue the Sack­lers per­son­ally. An­other Demo­cratic op­po­nent, North Carolina at­tor­ney gen­eral, Josh Stein, said Wed­nes­day he would do the same.

“These peo­ple are among the most re­spon­si­ble for the trail of death and de­struc­tion the opi­oid epi­demic has left in its wake,” Stein said.

But Ohio’s Repub­li­can at­tor­ney gen­eral, Dave Yost, backs the agree­ment. “The pro­posed set­tle­ment with Pur­due pro­vides the great­est cer­tainty for all Ohioans to re­ceive re­lief as quickly as pos­si­ble in light of ru­mored bank­ruptcy,” said a spokes­woman for Yost.

The deal was said to be worth $10 bil­lion to $12 bil­lion, in­clud­ing a $3 bil­lion pay­ment from the Sack­lers. It also would in­clude at least $1.5 bil­lion from the sale of the fam­ily’s in­ter­na­tional drug con­glom­er­ate, Mundipharm­a, ac­cord­ing to doc­u­ments and peo­ple close to the talks.

The fed­eral plain­tiffs and many at­tor­neys gen­eral ap­par­ently felt the pro­posal was as good as they could get. The lawyers for the cities and coun­ties agreed to rec­om­mend that the mu­nic­i­pal­i­ties “move for­ward in support of the cur­rent pro­posal, sub­ject to sat­is­fac­tory doc­u­men­ta­tion of the es­sen­tial terms and fi­nal doc­u­ments,” said Paul Hanly Jr., Paul Far­rell Jr. and Joseph Rice, three of the lead­ers of that group. “We feel good progress has and will con­tinue to be made.”

But some states ob­jected that the Sack­lers were not con­tribut­ing enough cash from their per­sonal for­tunes, built al­most en­tirely on the sale of OxyCon­tin and taken out of the com­pany in re­cent years, ac­cord­ing to court pa­pers filed by some states.

Con­necti­cut At­tor­ney Gen­eral Wil­liam Tong said he re­mained op­posed to any deal be­cause of that.

“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,” he said in a state­ment.

An­other ma­jor con­cern is that the deal re­lies in sig­nif­i­cant mea­sure on the as­sumed value of Pur­due’s as­sets and the sale of a sub­sidiary. States op­pos­ing it fear these val­ues may be over­es­ti­mated, and some of set­tle­ment money may never ma­te­ri­al­ize.

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