Purdue Pharma proposes $12B settlement to clean up opioid mess — report
After months of negotiations with states and federal plaintiffs accusing it of instigating the opioid crisis through aggressive and deceptive marketing tactics, Purdue Pharma is ready to pay $10 to $12 billion to settle it all.
Dan Polster Federal Bar Association The potential deal would cover hundreds of lawsuits being waged against the company by states, cities, towns and tribes, which is being overseen by United States district judge Dan Polster in Cleveland, alongside cases involving other prescription opioid makers. As part of the deal, the Sackler family — who had been charged with building a “multibillion-dollar drug empire based on addiction” — will give up ownership in Purdue.
The majority of the settlement will come in the form of in-kind drug donations and profits, with the exception of a $3 billion cash payment from the Sackler family ($4.5 billion if they manage to sell Mundipharma, another drug company they own, for more). Purdue has reportedly pledged to provide more than $4 billion in drugs, including marketed and experimental treatments for opioid addiction and overdose reversals, to the public for free. Under a new public benefit trust structure, all sales of its other drugs — including OxyContin, the opioid at the center of its misdeeds — would also go to the plaintiffs.
If the settlement is reached, Purdue will set a restructuring plan into motion by first declaring Chapter 11 bankruptcy, then transition into a trust made of court-appointed trustees, who will then select a board of directors to run the day-to-day operations.
“While Purdue Pharma is prepared to defend itself vigorously in the opioid litigation, the company has made clear that it sees little good coming from years of wasteful litigation and appeals,” the company said in a statement to NBC News, which first reported the deal.
Purdue Pharma — which has reportedly made more than $35 billion in OxyContin sales — and the Sackler family have previously denied the legal allegations against them.
It’s unclear whether, or how many, plaintiffs are on board with the proposed terms of the deal. Purdue is framing it as a take it or leave it deal, since they plan to file for bankruptcy no matter the outcome and the resulting amount that could go into a settlement would be lower than currently offered, according to NBC.
Andrew Pollis Case Western Reserve “(The deal is) very significant. Never before have we ever seen a member of a private industry offer so much money to try to deal with a public health crisis of this magnitude,” Andrew Pollis, a law professor at Case Western Reserve University, told NBC.
Opioid-related overdoses have claimed almost 400,000 lives from 1999 to 2017, according to the CDC. Government attorneys have brought over 2,000 lawsuits against opioid manufacturers and distributors, both seeking damages and attempting to hold executives behind the decisions to boost opioid sales at all costs accountable.
In May, executives at Insys — which markets a potent fentanyl spray — were found guilty of engaging in a bribery scheme to get doctors to prescribe their drug, Subsys. The company had previously agreed to pay $225 million to settle federal litigations, but are still in settlement talks with states after declaring bankruptcy. And on Monday global pharma conglomerate J&J was found guilty and fined $572 million in an Oklahoma court for its role in the opioid epidemic there.
The parties have until Friday to report back to Polster on the deal, the district judge who had encouraged the settlement talks, the Washington Post noted.
