OxyContin-maker Purdue Pharma reaches $4.5B settlement with NY, 14 other states
David RobinsonNew York State Team
New York and 14 other states have reached a $4.5 billion settlement with Purdue Pharma, the maker of OxyContin, potentially ending years of legal battles over the company's connection to the opioid epidemic.
The major opioid settlement was revealed in a mediator's report filed late Wednesday in federal bankruptcy court in White Plains, in which the 15 states — including New York, New Jersey, Pennsylvania and Massachusetts — supported the deal and agreed to drop their opposition to Purdue's bankruptcy.
“For nearly two years, since Purdue Pharma declared bankruptcy, the company and the Sackler family have used every delay tactic possible and misused the courts — all in an effort to shield their misconduct,” New York Attorney General Letitia James said in a statement Thursday.
“While this deal is not perfect, we are delivering $4.5 billion into communities ravaged by opioids on an accelerated timetable and it gets one of the nation’s most harmful drug dealers out of the opioid business once and for all," she added.
The settlement comes after New York state last week created an Opioid Settlement Fund, which requires money from legal settlements with the opioid industry to go into a new fund intended to ensure the proceeds go toward combating the opioid epidemic.
As part of the settlement, members of the Sackler family, which control Purdue, will be required to pay $4.325 billion over the next nine years, with New York state expected to receive at least $200 million, and possibly more, for abatement of the opioid epidemic, according to James' office.
The resolution also requires the Sacklers to relinquish control of family foundations — which will hold no less than $175 million in assets — to the trustees of a contemplated National Opioid Abatement Trust dedicated to abating the opioid crisis, thus increasing the total being delivered to communities nationwide to more than $4.5 billion.
Additional money is expected to be paid out by the Sacklers and Purdue Pharma directly to people impacted by the opioid epidemic as part of the bankruptcy case that could take years to complete, James noted. Nine states have yet to agree to the deal, according to NPR. They include Connecticut, where the company is headquartered, and California, Delaware, Maryland, New Hampshire, Oregon, Rhode Island, Vermont and Washington.
Purdue Pharma issued a statement about the settlement's impact on the company's reorganization plan, "which would transfer billions of dollars of value into trusts for the benefit of the American people and direct critically-needed medicines and resources to communities and individuals nationwide who have been affected by the opioid crisis."
Members of the Raymond and Mortimer Sackler families issued a statement calling the settlement "an important step toward providing substantial resources for people and communities in need. The Sackler family hopes these funds will help achieve that goal.” The settlement is subject to final approval by the court, and nine other states listed in the case have yet to approve the deal, according to court records.
The new legal settlement with Purdue Pharma, as well as members of its owners in the Sackler family, also came as the New York Attorney General's Office is in the midst of its sprawling lawsuit against the largest manufacturers and distributors of opioids.
The lawsuit, which was filed in March 2019, will unfold with a trial over coming months in Suffolk County State Supreme Court on Long Island. The manufacturers and distributors have denied wrongdoing, claiming in part to have been providing pain medication that was approved by federal regulators and prescribed by doctors.
Some aspects of the settlement reached this week had been established during prior years of legal proceedings, but several new key measures were included as part of the final deal, according to James and other attorneys general.
The new measures include the finalizing of plans to shut down Purdue Pharma and end the Sackler family’s ability to manufacture opioids.
The Sackler family would also be banned from pursuing naming rights related to charitable contributions until they have fully paid all obligations owed by them under the terms of the settlement and exited, worldwide, all businesses that engage in the manufacturing or sale of opioids, court records show.
Opioids: Cuomo signs Opioid Settlement Fund bill as major manufacturer trial begins Further, the settlement requires the public disclosure of tens of millions of documents related to the company and the Sackler family’s roles in igniting the opioid crisis, James said, calling it "an unprecedented disclosure about the role Purdue and the Sacklers played in hooking Americans on opioids." Among the information being made public, according to James:
More than 30 million documents, including privileged communications about the U.S. Food and Drug Administration (FDA) approval of OxyContin, as well as all documents relating to the manufacturing, sale, or marketing of opioids in the country.
Purdue will also waive its attorney-client privilege to reveal confidential communications with its lawyers about tactics used for pushing opioids, “pill mill” doctors and pharmacies diverting drugs, and about the billions of dollars Purdue paid out to the Sacklers.
Specifically, Purdue will turn over for public disclosure the evidence from lawsuits and investigations of Purdue over the past 20 years, including deposition transcripts, deposition videos, and 13 million documents.
The documents and evidence will be posted online, though details have yet to be finalized. During a virtual press conference Thursday, James joined Massachusetts Attorney General Maura Healey and Minnesota Attorney General Keith Ellison in describing the settlement as part of an imperfect resolution to a generational failure by federal law enforcement, as well as governmental regulators, to protect the public from highly addictive opioids being improperly marketed, distributed and prescribed. The attorneys general in part attributed the failure to rich and powerful people and companies exploiting cracks in all facets of government. "Before we sued, the Sacklers had always used their wealth to keep their deception going, their profits flowing," Healey said, adding the settlement delivered "a reckoning that exposes the Sackers' misconduct and strips them of their power." David Robinson is the state health care reporter for the USA TODAY Network New York. He can be reached email@example.com and followed on Twitter:@DrobinsonLoHud