The Purdue Pharma Settlement And The Opiate Crisis
The news of the Department of Justices $8 billion opioid settlement with Purdue Pharma signals that there is a legal resolution within sight.
However, much of this federal settlement will go toward criminal fines and penalties. Of the $8 billion, $2 billion will go toward civil penalties: $225 million now and $1.775 billion later. The U.S. Treasury has agreed to earmark $1.775 billion for municipalities, states, and tribes to abate the opioid crisis. Only $225 million of the settlement will be set aside in a public benefit trust and will go toward states and local communities for use now. Purdue will also be providing addiction medications to patients in need as part of this settlementbut the cost of those medications will come out of the $8 billion.
Through separate Purdue bankruptcy proceedings, only families that have filed wrongful death lawsuits against Purdue for the loss of their loved one to OxyContin will receive settlement dollars, in an amount yet to be determined.
This federal settlement is separate from the other lawsuits consolidated in the opioid multi-district litigation. While this separate civil litigation is ongoing, its critical to ensure that Purdue and the other defendants are not able to promote products with a propensity for addiction again. It might seem unfathomable, but as of right now, Purdue will still be able to produce OxyContin for pain and will not be barred from investing in future addictive products.
Purdue Pharma Bankruptcy Judge Sets Aside 11 Days For Trial
- Trial to begin on Aug. 12
- Legal protections for Sacklers remain key issue
- Judge says he will ‘cut people off’ if they waste time
– The trial over Purdue Pharmas settlement of opioid-related litigation will last up to 11 days, a judge said on Monday, warning parties that he will “cut people off if they are wasting time.”
During a virtual status conference, U.S. Bankruptcy Judge Robert Drain in White Plains, New York set the stage for the trial that will determine whether the OxyContin maker can bring its nearly two-year-long Chapter 11 case to a close.
You are all of you to fit within that time, period. Because I believe any capable lawyer can do so, he said.
Purdues bankruptcy reorganization plan rests on a settlement with the Sackler family members that own the company which protects them from future opioid-related claims in exchange for a $4.5 billion contribution to the deal.
The settlement has support from U.S. states, municipalities, hospitals, and individuals, but faces opposition from a handful of states and the U.S. Department of Justices bankruptcy watchdog, the U.S. Trustee.
Purdue says the deal, which steers funds toward opioid abatement programs, is worth more than $10 billion.
Critics of the settlement oppose the third-party releases that would provide legal protections to the Sacklers. The company has said that without the releases, the entire settlement, including billions of dollars for state and local opioid abatement programs, would collapse.
Purdue Pharma Opioid Settlement Update
Last September, thousands of families across the country who have been devastated by opioid addiction breathed a sigh of relief when Purdue Pharma, the manufacturers of OxyContin, agreed to a $4.5 billion bankruptcy settlement. Purdues owners, the Sackler family, also found relief in the possible end to the litigation plaguing the company. But when the settlement was rejected in December by a federal judge, confusion set in. What would this mean for the parties involved?
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Purdue Pharmas Involvement With The Opioid Crisis
The Sackler family has long been accused of fueling the nations Opioid crisis, tracing back to the 90s. Purdue Pharmas aggressive and misleading advertisements of OxyContin neglected to disclose its highly addictive nature. The company and family members have denied these allegations.
When OxyContin was first introduced in 1996, Purdue Pharma marketed OxyContin to healthcare providers as a safe and effective pain reliever for managing non-malignant pain.
Trusting the pharmaceutical company at its word, healthcare providers began prescribing OxyContin at higher rates leading to widespread misuse of both prescription and non-prescription Opioids. By 2006, there were 215,917,663 Opioid prescriptions in the US. This number translates to a prescribing rate of 72.4 prescriptions per 100 people. By 2020, this rate has dropped to 43.3.
In September 2019, the Purdue company filed for bankruptcy in the face of nearly 3,000 lawsuits accusing the company of contributing to the public health crisis that has claimed more than half a million American lives since 1999. In 2019, of the nearly 71,000 drug overdose deaths, 70.6% involved Opioids.
Attorney General Formella Announces Up To $6 Billion National Settlement With Purdue Pharma And Sacklers New Hampshire To Receive $46 Million If Agreement Approved
Attorney General John M. Formella today announced a national settlement with Purdue Pharma and its owners, the Sackler family, for their role in the opioid crisis, that will increase the amount of funds paid by the Sacklers from $4.325 billion under the original bankruptcy plan to at least $5.5 billion.
The settlement funds, which could increase the total amount being paid by the Sacklers to up to $6 billion if certain conditions are met, will be used to fund opioid treatment and prevention. As part of the agreement, the Sackler family must provide a statement of regret and allow institutions to remove the Sackler name from buildings and scholarships. If approved, New Hampshire will receive approximately $46 million from the settlement. The result is an increase over the $27 million allocated to New Hampshire in Purdues original bankruptcy planâa plan objected to by Attorney General Formella.
I would like to thank the Attorney General for forcing Purdue Pharma and the Sackler family back to the negotiating table to secure a better deal for New Hampshire, said Governor Chris Sununu. This necessary financial relief will help New Hampshire continue to make substantial progress in our fight against this crisis, and this settlement will deter irresponsible actions that would fuel this epidemic further.
Todays settlement is the product of a court-ordered mediation, which began on January 3, 2022. Settlement highlights include:
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Oxycontin Victims Fight For Their Share In Purdue Bankruptcy Case
The Sacklers want protection from future suits. Victims families want them to know what their greed has caused
Stephanie and Troy Lubinski met when they were teenagers, and they were married for three decades. Troy was big-hearted, kind, the best fisherman around, a devoted father who cared for the kids during the day after long night shifts as a firefighter.
But he had back pain that began when he worked in construction and then grew worse over the years. His doctor prescribed OxyContin, and that was the beginning of the end.
Everything just went downhill, Stephanie said.
Troy suffered a decades-long battle with opioid use disorder. The family lost everything their home, their belongings, even one sons football championship rings as Troys condition spun out of control.
Stephanie is one of more than 138,000 claimants alleging that the Sackler family and its company, Purdue Pharma, the maker of OxyContin, contributed to the ongoing opioid epidemic. The Sacklers deny wrongdoing.
Facing about 3,000 lawsuits, Purdue filed for bankruptcy in 2019, but not before Sackler family members took more than $10 bn from the company over the course of a decade.
This case, brought by states and victims of opioids, is now being settled in bankruptcy court.
But it is proving difficult to settle. A previous agreement was blocked in December. After intense negotiations, the Sackler family is now offering $6 bn in settlement negotiations, paid out over several years.
Plan Of Reorganization Of Purdue Pharma Lp Receives Bankruptcy Court Approval
Sep 1, 2021 | News
- Overwhelmingly supported Plan will deliver billions in value to communities across the country to fund programs specifically for abatement of the opioid crisis.
- Plan crafted and shaped by multiple fiduciaries for the victims, governments, and creditors determined to be fair and equitable.
- Purdues assets will be transferred to a new post-emergence company dedicated to the public good. Purdue will cease to exist.
- Plan provides for unprecedented transparency regarding both past conduct and future operations of the new company.
STAMFORD, Conn. September 1, 2021 The United States Bankruptcy Court for the Southern District of New York today approved the Purdue Pharma L.P. chapter 11 plan of reorganization . The Plan received overwhelming support from more than 95% of voting creditors, including every voting class of creditors and bi-partisan state attorneys general from 43 states and territories.
Confirmation is proof positive that representatives of disparate stakeholders can work together under difficult circumstances and produce an outcome that is truly in the public interest, said Steve Miller, who joined Purdue Pharma L.P. in mid-2018 as chairman of its Board of Directors. Instead of years of value-destructive litigation, including between and among creditors, this Plan ensures that billions of dollars will be devoted to helping people and communities who have been hurt by the opioid crisis.
Purpose, Governance & Oversight
Advancing Public Health
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Purdue Pharma Bankruptcy: A Battle Over Much More Than Dollars And Cents
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In 2019, opioid manufacturer Purdue Pharma filed bankruptcy in the Southern District of New York. A large portion of the debt listed on its bankruptcy schedules came from judgments and potential lawsuits against it for its role in the opioid epidemic. Purdues owners, the Sackler family, were named in many of those lawsuits and would likely have been named in many more. Within Purdues bankruptcy the Sackler family obtained protection from lawsuits against its members for claims related to Purdue Pharma while the bankruptcy was pending, protection that they continue to enjoy to this day. However, this was only the beginning of the protections the Sacklers sought through Purdues bankruptcy.
Federal Judge Reverses Purdue Pharma Settlement
On Thursday, a federal judge overturned a nearly $4.5 billion bankruptcy settlement that granted immunity to the Sackler family from civil lawsuits linked to their company Purdue Pharmaceuticals, the manufacturer of OxyContin. According to NPR, the settlement also included hundreds of individuals, companies, and other organizations vying for a clean legal slate. The judge, Colleen McMahon of the US District Court for the Southern District of New York, stated in a written opinion on Thursday that the New York bankruptcy court that approved the settlement back in September did not have the authority to shield the Sackler family from future Opioid-related lawsuits.
The settlement was first approved by Judge Robert Drain of the US Bankruptcy Court in White Plains, New York. It settled that the owners of Purdue Pharma, members of the Sackler family, would renounce their ownership of the company and must pay back billions of their fortune to address the deadly Opioid epidemic. In addition, the Purdue company would be dissolved and re-emerge as Knoa Pharma which would still produce OxyContin and other drugs. By doing so, however, the family and related parties would be absolved from any liability related to the Purdue company.
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Purdue Pharma Bankruptcy Update
Purdue Pharmas chapter 11 bankruptcy filing in the Southern District of New York on Sunday evening came as no surprise to anyone. The filing is an integral part of deal between Purdue and some 24 states to settle more than 2,000 lawsuits against the company arising from Purdues alleged role in nations current opioid crisis. Purdue and the settling states expect to use the chapter 11 bankruptcy case to restructure Purdue as a public trust from which profits derived from the sale of the companys opioid products will be directed to state and local governments for use in programs designed to address the crisis. Connecticut and New York are among the states that are not part of the settlement and expected to opposed the bankruptcy restructuring.
Purdue has no secured debt in fact relatively no debt to speak of at all. As such, if Purdue is able to halt the non-settling lawsuits, it will be able to press forward with its restructuring plans unhindered by the power of secured creditors to keep a chapter 11 debtor on a tight leash through limiting and conditioning use of cash collateral.
Impact On Future Mass Tort Bankruptcy Cases
The District Courts rejection of non-consensual third-party releases in a bankruptcy plan, if affirmed on appeal, would also make it more difficult for other companies to reorganize in future Chapter 11 proceedings by limiting their ability to fund future complex restructurings involving the settlement of mass tort and fraud claims. This is because the debtor companies themselves often lack the assets to significantly compensate their creditors. For over 30 years, non-consensual third-party releases have been a critical tool used to incentivize investors and target companies and individuals to contribute substantial amounts of money toward a reorganization of the debtor company, while allowing them to avoid further legal liability without having to file their own bankruptcy cases. Their contributions allow for faster and usually higher recoveries to creditors by avoiding the delay and costs of years of litigation against non-debtor parties outside of bankruptcy. Without such financial support, companies facing massive tort liabilities will be more likely to liquidate than reorganize in bankruptcy resulting in much lower recoveries for creditors .
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Fentanyl Overdoses: What To Know
Devastating losses.Drug overdose deaths, largely caused by the synthetic opioid drug fentanyl, reached record highs in the United States in 2021. Heres what you should know to keep your loved ones safe:
Understand fentanyls effects.Fentanyl is a potent and fast-acting drug, two qualities that also make it highly addictive. A small quantity goes a long way, so its easy to suffer an overdose. With fentanyl, there is only a short window of time to intervene and save a persons life during an overdose.
Stick to licensed pharmacies.Prescription drugs sold online or by unlicensed dealers marketed as OxyContin, Vicodin and Xanax are often laced with fentanyl. Only take pills that were prescribed by your doctor and came from a licensed pharmacy.
Talk to your loved ones.The best way to prevent fentanyl use is to educate your loved ones, including teens, about it. Explain what fentanyl is and that it can be found in pills bought online or from friends. Aim to establish an ongoing dialogue in short spurts rather than one long, formal conversation.
Learn how to spot an overdose.When someone overdoses from fentanyl, breathing slows and their skin often turns a bluish hue. If you think someone is overdosing, call 911 right away. If youre concerned that a loved one could be exposed to fentanyl, you may want to buy naloxone, a medicine that can rapidly reverse an opioid overdose and is often available at local pharmacies without prescription.
Mediation And A New Opioid Settlement
After the settlement was thrown out, attorneys for the Sackler family and Purdue Pharma appealed the ruling and began formulating a new agreement in January. One of the main points contested by attorneys on both sides is whether the Sackler family should be shielded from opioid-related litigation. The original deadline for negotiations to conclude was February 7. After both parties stressed that additional time was needed to finalize a potential new settlement, they were granted an extension to February 17.
Under the latest proposal filed by the appointed mediator in the U.S. Bankruptcy Court on February 18, the Sackler family would contribute between $5.5-6 billion to settle lawsuits in exchange for protection against current and future lawsuits. The exact amount would be determined by how much the family would make from selling its international drug companies.
Victim and family advocates are concerned that the additional money will go into the governments pockets rather than support those who suffered. Advocate Ryan Hampton noted that the new proposal would not increase the original $750 million set aside for treatment and support programs.
The governments pot will continue to get larger as additional settlement negotiations may continue, yet theres no increase for direct payments to families and survivors, he said. Its dead wrong and unjust.
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District Court Overturns Purdue Pharmas Chapter 11 Plan And Related Releases Of Sackler Family From Opioid Liability Claims
On December 16, 2021, Judge McMahon of the United States District Court for the Southern District of New York issued her decision in In re: Purdue Pharma LP, overturning the bankruptcy judges confirmation of Purdue Pharmas Chapter 11 plan. The District Court ruled that the Bankruptcy Code does not permit the granting of non-consensual releases to non-debtor third-parties outside of the asbestos context. In doing so, Judge McMahon at least temporarily called into question the primary tool used to provide plan funding in non-asbestos mass tort bankruptcy cases – the grant of releases to the non-debtor parties providing plan funding. Chapter 11 plans ordinarily provide for voluntary releases whereby creditors are given an opportunity to consent to or opt out of such releases. However, when non-consensual third-party releases are sought to support a proposed plan , the debtor company requests that the bankruptcy court mandate releases for third parties by all claimants regardless of whether a subset of holdout creditors wants to preserve claims against the non-debtor parties.
Purdue Pharma Is Dissolved And Sacklers Pay $45 Billion To Settle Opioid Claims
The ruling in bankruptcy court caps a long legal battle over the fate of a company accused of fueling the opioid epidemic and the family that owns it.
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Purdue Pharma, the maker of the highly addictive painkiller OxyContin, was dissolved on Wednesday in a wide-ranging bankruptcy settlement that will require the companys owners, members of the Sackler family, to turn over billions of dollars of their fortune to address the deadly opioid epidemic.
But the agreement includes a much-disputed condition: It largely absolves the Sacklers of Purdues opioid-related liability. And as such, they will remain among the richest families in the country.
Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., approved the settlement, saying he wanted modest adjustments. The painstakingly negotiated plan will end thousands of lawsuits brought by state and local governments, tribes, hospitals and individuals to address a public health crisis that led to the deaths of more than 500,000 people nationwide.
The settlement terms have been harshly criticized for shielding the Sacklers. They are receiving protections that are typically given to companies that emerge from bankruptcy, but not necessarily to owners who, like the Sacklers, do not themselves file for bankruptcy.
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