Several weeks ago, we reported on the $26 Billion settlement with multiple states to resolve thousands of lawsuits over the country’s opioid crisis, a crisis that cost the lives of over 500,000 Americans.
Now we get to meet the Sackler family, private owners of Purdue Pharma, the company that created, marketed, and distributed Oxy Contin. They have an estimated net worth of $11 billion.
On Wednesday (Aug 31, 20210), a federal bankruptcy judge gave conditional approval to a sweeping immunity for the Sackler family from opioid lawsuits linked to their privately owned company and OxyContin. Federal Judge Robert Drain’s bankruptcy approval grants the Sacklers “global peace” from any liability for the opioid epidemic.
Under the settlement, the Sacklers, who reside worldwide, will have to exit the opioid business altogether and pay $4.5 billion (of an estimated $11B net worth). They will have immunity from any future lawsuits over opioids. However, they were not granted immunity from criminal charges. It doesn’t look like they will face any anyway.
The attorneys general of Connecticut, the District of Columbia, and Washington state immediately announced they would either appeal the ruling or explore the possibility of appealing the verdict.
Connecticut’s William Tong said that the Sacklers “should not be allowed to manipulate bankruptcy laws to evade justice and protect their blood money,”
If it withstands appeals, the deal will resolve over 3,000 lawsuits from state and local governments, Native American tribes, and unions, among others that have accused the company of aggressively marketing the prescription painkiller, thereby causing the overdose pandemic.
The drugmaker itself, Purdue Pharma, will be reorganized into a new “charity-oriented company” with board-appointed public officials and will channel its profits into government-led efforts to prevent and treat addiction.
In addition, the settlement sets up a compensation fund that will pay some victims anywhere from $3,500 to $48,000 each.
Judge Drain said that while he does not have “fondness for the Sacklers or sympathy for them,” collecting money from them through lawsuits instead of a settlement would be complicated.
Purdue Pharma chair Steve Miller said the settlement deflects “years of value-destructive litigation” and “ensures that billions of dollars will be devoted to helping people and communities who the opioid crisis has hurt.”
Former board member David Sackler testified that family members would not accept the agreement unless it protected them from lawsuits. He said that the family would defend itself, otherwise, in litigation that could drag on for years and eat up the company’s and the family’s assets in lawyers’ fees.
Richard Sackler, former president, board chair, and patriarch of the family, said under questioning that he, his family, and the company did not bear responsibility for the opioid crisis.
Several attorneys general won another provision that will create a massive public repository of company documents, including those generally protected by the attorney-client privilege.
This isn’t the first time the family has been in hot water, legally speaking.
In 2007, the company pleaded guilty to federal charges admitting that it misled regulators and others about the addiction dangers of OxyContin. They agreed to pay more than $600 million in penalties. And last November, as part of a settlement with the U.S. Justice Department, Purdue pleaded guilty to conspiring to defraud the United States and violating anti-kickback laws.
Judge Drain summed the whole thing up succinctly by saying that “A forced apology is not really an apology, so we will have to live without one.”
That’s unfortunate.
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