New Proposal Could Settle Purdue/Sackler Opioid Payment Cases With 15 States

Originally published by our sister publication Pharmacy Practice News

By Fran Kritz

Seven months after the U.S. Supreme Court overturned a bankruptcy reorganization of OxyContin maker Purdue Pharma, the company-together with members of the family that own the firm-have renegotiated a settlement that has been accepted by more than a dozen state Attorneys General.

The case that was overturned by the court, 5 to 4, last June included legal protections for the Sackler family. According to the court’s majority opinion, however, the bankruptcy court that approved the settlement did not have the authority to protect the Sackler family members from legal claims made by opioid victims.

Under the framework of the new deal, the Sacklers would not receive immunity from future opioid lawsuits but would pay up to $6.5 billion—$500 million more than the previous agreement called for. Claimants in the case, including states, municipalities and individuals, would have to set aside and not spend up to $800 million that the family could use for legal fees in any future cases. 

Purdue Pharma would pay out an additional $900 million in the settlement. While the family’s payments are staggered over three years, Purdue must provide the full $900 million in the first payment, according to the agreement, which must be approved by a bankruptcy court.

States included in the settlement are New York, California, Colorado, Connecticut, Delaware, Florida, Illinois, Massachusetts, Oregon, Pennsylvania, Tennessee, Vermont, Virginia and West Virginia.

The deal would also end the Sackler family’s ownership of Purdue Pharma. The company filed for bankruptcy in 2019, and a board of trustees selected by participating states will determine what happens to the company in the future.

According to the agreement, the proposed settlement allows states and individuals who want to sue Purdue and members of the Sackler family independently, to do so.

‘Instrumental Role’ in Opioid Crisis

In a press release announcing the proposed settlement, New York State Attorney General Letitia James said the states had brought their cases against the company and the Sackler family “for their instrumental role in creating the opioid crisis.” Purdue, under the Sacklers’ leadership, “invented, manufactured and aggressively marketed opioid products for decades, fueling waves of addiction and overdose deaths across the country,” Ms. James said. She added that the settlement ends the Sacklers’ control of Purdue and ability to sell opioids in the United States, and will deliver funding directly to communities across the country over the next 15 years to support opioid addiction treatment, prevention and recovery programs.

According to the press release, there have also been multi-state settlements for billions of dollars from opioid manufacturers and distributors for their role in the opioid epidemic. They include Indivior, Amneal Pharmaceuticals, Hikma Pharmaceuticals, Teva Pharmaceuticals, Johnson & Johnson, Mallinckrodt, Allergan, Endo, McKesson, Cardinal Health and Amerisource Bergen. 

Additionally, multi-state coalitions have reached settlements for billions of dollars with CVS, Walgreens and Walmart “for their roles in failing to properly regulate opioid prescriptions,” as well as settlements with consulting firm McKinsey & Company and the marketing firm Publicis Health for their roles in fueling the opioid crisis.

As of last February, more than $4.3 billion had been paid out to state governments in opioid settlement funds, according to KFF Health News. The publication created a tracker to see how the settlement money is being spent. According to the news organization, “the top priority to emerge from early opioid settlement spending was treatment, with more than $416 million spent or committed to residential rehabs, outpatient counseling, medications for opioid use disorder, and more.”

The full impact of the settlements, including the Purdue/Sackler proposal, remains to be seen. “With regard to the Purdue settlement, I don't think the funds will have much impact,” Andrew Kolodny, MD, a senior scientist at the Heller School for Social Policy and Management at Brandeis University, in Waltham, Mass., who focuses on the opioid epidemic, told Pharmacy Practice News. “When you spread 7.5 billion [dollars] across the country and over …  years for a disease epidemic (opioid use disorder) affecting about 5% of the adult U.S. population, even if the money is well spent (which is a big if) the impact will be minimal.”

Dr. Kolodny reported no relevant financial disclosures.