Purdue Pharma LP, the makers of controversial opioid OxyContin, won court approval for its $4.5 billion bankruptcy plan. A New York bankruptcy court judge said he will confirm a restructuring plan to dispose of the company’s assets.
OxyContin Owners Get Immunity From Lawsuits
In addition, Purdue Pharma earned its owners, the Sackler family, freedom from additional lawsuits. In exchange, the company will liquidate its assets to pay for funding for opioid awareness programs.
Last Wednesday, Judge Robert Drain of the US Bankruptcy Court in White Plains, NY confirmed the bankruptcy plan. He said that the plan involves restructuring Purdue Pharma and turning it into a public benefit company. It will also settle civil lawsuits filed by government lawyers and opioid users.
Open To Appeal
However, federal and state officials can still appeal Judge Drain’s ruling. Government lawyers say that the current bankruptcy plan is disadvantageous. They argued that the proposed settlement structure is unconstitutional.
In addition, the Sackler family isn't giving up much of the wealth they earned from the opioid. In fact, the Sackler got more than $10 billion in income between 2008 to 2017. Half went to taxes or went back as reinvestments.
A Washington lawyer representing the state said that Drain is making a “historic” mistake. He also said an appeal will overturn the ruling.
Even worse, Sackler family members will gain immunity from present and future lawsuits. The Sacklers will receive releases that will drop all current civil litigation against them.
However, the bankruptcy plan will need to undergo some minor changes as issued by Drain. While he wanted the family to pay more, he said he cannot force them to do so.
Purdue Pharma is the Latest Company Making Drug Settlements
OxyContin maker Purdue is the latest among drug manufacturers seeking to settle lawsuits over the opioids they sold. According to federal records, around half a million people died from an opioid overdose between 1999 to 2019.
Several companies contributed to pay a $26 billion settlement with various US states over opioid use. Meanwhile, consulting firm McKinsey & Co forked out $573 million due to its role in heavily advertising opioids such as OxyContin and fentanyl.
During the pandemic, Americans who died from drug-related overdoses rose by more than 30%. At this point, the widespread availability of fentanyl was the main culprit.
When making his decision, Judge Drain did not consider Purdue or the Sackler family’s culpability in the opioid crisis. Instead, he only looks at the family’s $4.5 billion contributions to Purdue’s creditors.
He said the amount is a fair resolution to its bankruptcy suit. In addition, Drain noted that even if four Sackler family members testified during the trial, none would issue an apology. However, they did express regret for what the company did.
Forced Apology Not Really An Apology
“A forced apology is not really an apology, so we will have to live without one,” Drain said. He added that he understands the bitterness over the bankruptcy case.
Purdue pled guilty last year to three federal felonies over its marketing and sale of OxyContin. The Sacklers denied wrongdoing. Last year, the family settled civil allegations with the Justice Department for $225 million separately. They did so without admitting any liability.
Watch the CBS Evening News video reporting that Purdue Pharma's opioid settlement sparks backlash:
Do you agree with the way Purdue and the Sackler family settled lawsuits against their role in the opioid crisis? Also, do you think the company and the family could do more to help? Finally, do you agree that the Sackler family deserves immunity from current and future lawsuits?
Let us know what you think. Share your comments below.
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