purdue pharma

Throwing out the $4.5 billion settlement with Purdue Pharma is the right call

A federal judge’s decision to overturn a $4.5 billion settlement between Purdue Pharma and assorted state, local, and tribal governments is the right call. The settlement wrongly shielded the billionaire Sackler family, who owned the company that made the prescription painkiller OxyContin, from any and all civil liability in opioid-related tragedies.

As reported by The New York Times, the settlement was part of a complex restructuring plan for Purdue Pharma that was approved in September by a bankruptcy judge. But Judge Colleen McMahon of the US District of New York pulled the plug on it, because it protected the Sackler family from future civil lawsuits. After the Sacklers took more than $10 billion out of it, Purdue Pharma filed for bankruptcy. The Sacklers, who did not file for personal bankruptcy, offered to contribute toward the original settlement, “if – and only if – every member of the family could ‘achieve global peace’ from all civil [not criminal] litigation,” the judge wrote. And that, she said, was wrong. She did, however, also call the legal issue of the Sacklers’ release “a great unsettled question” of bankruptcy law and wrote, “This opinion will not be the last word on the subject, nor should it.”

Purdue Pharma Seeks Bankruptcy Protection

Purdue Pharma has filed for Chapter 11 bankruptcy protection as part of a plan for settling some of the opioid-related litigation it faces in federal and state courts across the country.

These settlements have an estimated value of more than 10 billion dollars.

The company has announced the agreement in principle for the settlement framework with 24 state attorney generals, officials from 5 United States territories, the Plaintiffs’ Executive Committee in the multidistrict litigation (MDL), and co-lead counsel in the MDL. The parties included in this agreement in principle represent some of the more than 2600 lawsuits filed against Purdue Pharma concerning opioids, including the company’s OxyContin products.

The more than 2600 civil actions filed against Purdue Pharma generally allege that the company engaged in deceptive and false marketing tactics to sell its opioid products and is liable for the ongoing national opioid crisis.

Purdue Pharma has denied claims made against the company in these lawsuits.

Purdue’s Sackler family wants global opioids settlement

Mary Jo White of Debevoise & Plimpton represents four members of the family that controls Purdue Pharma, the company that developed and marketed the painkiller OxyContin. Purdue, along with other opioid makers, wholesalers and distributors, is facing more than 2,000 suits by state, city and county officials who blame prescription opiates for sparking an unprecedented epidemic of drug abuse.

In rare public comments on behalf of the Sacklers, White told me why the family believed the litigation against them and their company is legally dubious, factually misleading and politically motivated.

Sackler Family’s Role in Opioid Crisis Revealed

The Sacklers had a new plan.

It was 2014, and the company the family had controlled for two generations, Purdue Pharma, had been hit with years of investigations and lawsuits over its marketing of the highly addictive opioid painkiller OxyContin, at one point pleading guilty to a federal felony and paying more than $600 million in criminal and civil penalties.

But as the country’s addiction crisis worsened, the Sacklers spied another business opportunity. They could increase their profits by selling treatments for the very problem their company had helped to create: addiction to opioids.

Details of the effort, named Project Tango, have come to light in lawsuits filed by the attorneys general of Massachusetts and New York. 

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