Purdue Pharma, U.S. states agree to new opioid settlement

OxyContin maker Purdue Pharma reached a settlement Thursday over its role in the nation’s deadly opioid crisis that includes U.S. states and thousands of local governments, with the Sackler family members who own the company boosting their cash contribution to as much as $6 billion.

The deal follows an earlier settlement that had been appealed by eight states and the District of Columbia. They agreed to sign on after the Sacklers kicked in more cash and accepted other terms, including apologizing. In exchange, the family would be protected from civil lawsuits.

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In all, the plan could be more than $10 billion over time. It calls for members of the Sackler family to give up control of the Stamford, Connecticut-based company so it can be turned into a new entity with profits used to fight the crisis.

An apology is something Sackler family members have not unequivocally offered in the past. And victims are to have a forum in court to address Sackler family members — something they have not been able to do in a public setting.

The settlement, in a mediator’s report filed in U.S. Bankruptcy Court in White Plains, New York, still must be approved by a judge.

“The Sackler families are pleased to have reached a settlement with additional states that will allow very substantial additional resources to reach people and communities in need,” the apology reads. “The families have consistently affirmed that settlement is by far the best way to help solve a serious and complex public health crisis. While the families have acted lawfully in all respects, they sincerely regret that OxyContin, a prescription medicine that continues to help people suffering from chronic pain, unexpectedly became part of an opioid crisis that has brought grief and loss to far too many families and communities.”

The new plan was hammered out with attorneys general from the eight states and D.C. who had opposed the earlier one, arguing that it did not properly hold Sackler family members accountable.

Though members of the Sackler family would be protected from lawsuits over opioids, the deal would not shield them from criminal charges, though there’s no indication any are forthcoming.

Individual victims of the opioid crisis and their survivors are to share a $750 million fund, a key provision not found in other opioid settlements. About 149,000 people made claims in advance and could qualify for shares from the fund; others with opioid use disorder and the survivors of those who died are shut out.

That amount is unchanged in the new plan, but states will be able to create funds they can use to compensate victims beyond that, if they choose.

Other new provisions include an agreement from Sackler family members that they won’t fight when institutions attempt to take the names off of buildings that were funded with the family’s support. And additional company documents are to be made public.

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Most of the money is to flow to state and local governments, Native American tribes and some hospitals, with the requirement that it be used to battle an opioid crisis that has been linked to more than 500,000 deaths in the U.S. over the past two decades.

Purdue, the originator of time-release versions of powerful prescription painkillers, is the highest-profile company out of many that have faced lawsuits over the crisis. It has twice pleaded guilty to criminal charges related to its business practices around OxyContin.

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The latest announcement follows another landmark settlement late last week, when drugmaker Johnson & Johnson and three distributors finalized a settlement that will send $26 billion over time to virtually every state and local governments throughout the U.S. If the latest Purdue deal wins approval, the two settlements will give local communities that have been devastated by opioid addiction a significant boost to help them combat the epidemic.

There are two key differences between the the latest Purdue settlement and the previous one struck last year: The Sacklers’ cash contribution has gone up by at least $1.2 billion, and the attorneys general for all 50 states and the District of Columbia have now agreed. As recently as Feb. 18, a mediator said a small but unspecified number of states were still holding out.

Last year, eight states and the District of Columbia refused to sign on and then appealed after the deal was approved by the bankruptcy judge.

In December, a U.S. district judge sided with D.C. and the eight holdout states — California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont and Washington. The judge, Colleen McMahon, rejected the settlement with a finding that bankruptcy judges lack the authority to grant legal protection to people who don’t themselves file for bankruptcy when some parties disagree.

Purdue appealed that decision, which, if left standing, could have scuttled a common method of reaching settlements in sweeping, complicated lawsuits.

Meanwhile, U.S Bankruptcy Judge Robert Drain, who had approved the earlier plan, ordered the parties into mediation and on several occasions gave them more time to hammer out a deal.

The new plan still requires Drain’s approval. Appeals related to the previous version of the plan could continue moving through the court system.

In a separate push to hold the Sacklers accountable for the opioid crisis, a group of seven U.S. senators, all Democrats, wrote the U.S. Department of Justice in February asking prosecutors to consider criminal charges against family members.