Opioid maker cuts tentative settlement deal
Agreement would give billions to states, cities; some say it’s not enough.
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.