The United States Court of Appeals for the Second Circuit in New York has approved a new agreement in the Purdue Pharma settlement, ordering the Sackler family to pay $6 billion – about half of their estimated wealth – to fight the opioid crisis. In exchange, the family will receive immunity from civil lawsuits stemming from the company’s sale of the highly addictive prescription painkiller OxyContin.
The FDA approved OxyContin in 1995 and Purdue Pharma marketed it as the first painkiller that was non-addictive and therefore safe for long-term use, fueling its widespread prescription by doctors.
“The Sackler families believe that the long-awaited implementation of this resolution is essential to providing substantial resources to people and communities in need,” the Sackler family said in a statement.
Critics of the family, as the artist Nan Goldin-of which advocacy organization Sackler PAIN directed A succeeded campaign For to withdraw Family name Since establishments as the Metropolitan Museum of Art and the Solomon R. Guggenheim Museum in New York – argue that the Sacklers knowingly misled the public about the dangers of OxyContin and that the drug spawned a deadly opioid epidemic.
Harvard University students and PAIN members demonstrate outside the school’s Arthur M. Sackler Museum. Photo by Dumebi Malaika Menakaya, courtesy of PAIN.
The United States recorded more than 564,000 deaths from opioid use between 1999 and 2020, according to the Centers for Disaster Control and Prevention.
The new ruling by a three-judge panel brings Purdue’s bankruptcy deal, which has dragged on for years, one step closer to completion. But the settlement must still be approved by the federal bankruptcy judge assigned to the case. Additionally, the Office of the US Bankruptcy Trustee – which is an arm of the US Department of Justice and the only party still opposed to the deal – could appeal to the US Supreme Court.
Purdue filed for first bankruptcy in September 2019, following a series of trials of states across the United States, with an estimated total of $40 trillion in claims against the company. As part of an October 2020 plea agreement on criminal charges, the company agreed to an $8 billion settlement with the DOJ that included $225 million in civil penalties of the Sackler family.
But the bankruptcy proceedings dragged on, with the Sacklers’ future immunity claims becoming one of the main sticking points for both sides.
Maintaining the ability to sue their Sacklers for their actions could be seen as a way to get justice for the victims, but the protracted legal battle has undoubtedly delayed the payment of much-needed funds to fight painkiller addiction. (THE Centers for Disease Control estimates that the opioid crisis cost the United States more than $1 trillion in 2017.)
This week’s court ruling ‘allows nearly $500 million of Purdue Pharma’s ill-gotten gains to be returned to California, to heal our communities and bring real relief to countless hurting families,’ the attorney general said. of California, Rob Bonta, in a statement. “However, unfortunately, the decision does not require Purdue to lift the Sacklers’ liability shield against private claims. The victims of this crisis deserve justice and they should have the opportunity to sue Purdue for it. »
A second bankruptcy plan submitted by Purdue in March 2021 included $4.275 billion in payments to OxyContin victims and their surviving family members. Two dozen state attorneys general initially rejected the plan, in part because it did not include provisions allowing the deletion without repercussion of the Sackler name The establishments.
But when the Sacklers agreed to stop seeking naming rights for nine years, 15 states, including New York, dropped their opposition in July of that year. By year’s end, however, a U.S. district judge had overturned the caseruling that the Sackler family could not enjoy immunity from civil suits because it was the company that declared bankruptcy, not the family itself.
The case appeared to be on the verge of being resolved last March, when the last nine states dropped their opposition to the settlement. In return, the Sacklers agreed to increase their cash payout from $4.3 billion to $6 billion.
Additionally, institutions would be allowed to renege on naming rights agreements with the Sacklers, provided they did not disparage the family by announcing changes. Last month, the University of Oxford in the UK, one of the last institutions with links to the Sacklers, removed its name from the Ashmolean Museum and Bodleian Libraries buildings following an investigation, as the reported the FinancialTimes.
The latest ruling could prove significant in bankruptcy case law, granting bankruptcy court judges the power to approve bankruptcy protections for third parties, i.e. anyone other than debtors. real in the case.
The judges concluded that because the Sacklers were so closely tied to Purdue Pharma, a settlement involving financial concessions from the family would not be possible without protection from civil lawsuits. (Criminal charges against the family would still be possible under the agreement.)
As part of the settlement, Purdue will be restructured as Knoa Pharma, a new pharmaceutical company overseen by a public board. In addition to producing OxyContin, it will also manufacture drugs for the treatment of drug addiction, the profits of which will be used to combat the opioid crisis.
“Our goal going forward is to provide billions of dollars in value for victim compensation, opioid crisis relief and overdose rescue medication,” said company president Steve Miller, in a statement. statement. “Our creditors understand that the plan is the best option to help those who need it most, the fairest and fastest way to resolve the dispute, and the only way to provide billions of dollars in value specifically to fund efforts to address the opioid crisis.”
The settlement will provide OxyContin victims and their survivors with payments of $750 million, between $3,500 and $48,000 each.
Ed Neiger, an attorney representing individual victims, endorsed the decision. “It is a great day for the victims, some of whom are in desperate need of money and have been waiting for this day for a long time,” he said. Associated Press.
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