Purdue Pharma’s Opioid Settlement Overturned—What’s Next?
Purdue Pharma’s settlement was approved by a U.S. federal judge in September but now that ruling has been overturned. What's the latest update?
Dec. 20 2021, Published 11:50 a.m. ET
In September 2021, Purdue Pharma’s opioid settlement was done, which allowed Purdue Pharma to be dissolved. The Sackler family (which owns Purdue) got immunity from any further legal claims in exchange for a $4.5 billion payout to victims of the opioid crisis. However, there has been a new twist in the tale. What's the Purdue Pharma settlement update?
The opioid addiction crisis has been raging across the U.S. Purdue Pharma created OxyContin in 1996 as a long-lasting pain reliever. According to The Star, while Percocet releases 5 mg of oxycodone all at once, the strongest OxyContin pills release 80 mg over a period of 12 hours. The company has been at the center of the controversy since the federal government accused it of misbranding the drug in 2007.
Purdue Pharma is one of the most successful pharma companies in the world. Now, it's infamously known to be the manufacturer of OxyContin, an opioid medication used to treat moderate to severe pain. The drug is highly addictive and causes what came to be known as the OxyContin opioid crisis. The opioid addiction crisis led to over 500,000 overdose deaths in the U.S. over the past 20 years. Purdue Pharma pleaded guilty twice for federal crimes around the unethical marketing of OxyContin.
Purdue Pharma’s settlement got overturned.
On Dec. 16, a federal judge, Colleen McMahon of the Southern District of New York, overturned the September ruling that provided the Sackler family with immunity from additional civil lawsuits. There are over 800 lawsuits that name the Sackler family. The ruling said that the company’s owners couldn't receive protection by contributing $4.5 billion.
The immunity granted was contentious from the very start. The Sacklers hadn't filed for personal bankruptcy and this type of release is typical of bankruptcy. Purdue Pharma filed for bankruptcy in New York in 2019 amid a wave of litigation from cities, states, individuals, and others.
What's the contention regarding Purdue’s September settlement?
The contentious September ruling was immediately appealed by the United States Trustee—a branch of the Justice Department that monitors bankruptcy cases—eight states, and many others. The states claimed that the Slacker family members took billions from the company, steered it towards bankruptcy, and then used a settlement to gain legal protection for themselves. The states claim that this is an abuse of the bankruptcy process.
The Sacklers admitted that they have profited at least $10 billion off of OxyContin sales over the years. Judge McMahon said she was troubled by the billions made by the family as the opioid epidemic was cresting. The funds were largely deposited in offshore accounts and trusts that aren't accessible to U.S. authorities.
Purdue will challenge the latest court order.
Judge McMahon said that the federal judge who approved Purdue’s September settlement didn't have the authority to prevent additional lawsuits against the Sackler family, except in cases of intentional misconduct.
Within hours of the Dec. 16 ruling, Purdue said that it will appeal. Purdue and its lawyers argue that without the Sackler contribution, Purdue would likely be dissolved, which would leave plaintiffs, who are in dire need of resources, largely uncompensated.
