Purdue threatens to walk away from settlement, asks to pay employees millions in bonuses
There are two updates on the lawsuit against Purdue Pharma over its role in fueling the opioid epidemic, as the Sackler family threatens to walk away from their pledge to pay out $3 billion if a bankruptcy judge does not stop outstanding state lawsuits against them. At the same time, the company has asked permission to pay millions in bonuses to select employees.
Purdue filed for chapter 11 bankruptcy this week as part of its signed resolution to over 2,000 lawsuits. The deal would see the Sackler family that owns Purdue give $3 billion from their personal wealth and the company turned into a trust committed to curbing and reversing overdoses.
But the backlash to the proposed settlement was almost immediate, with Pennsylvania Attorney General Josh Shapiro calling it a “slap in the face” to families of overdose victims. AGs from Massachusetts, New York, New Jersey and Connecticut also did not sign the settlement.
“It allows the Sackler family to walk away billionaires and admit no wrongdoing,” Shapiro said in a statement.
The attorney generals asked the family to sell its British company Mundipharma immediately, stop creating drugs for international markets and commit another $1.5 billion.
Now the family is saying that if a judge does not halt lawsuits from those states for 270 days, they will pull their commitment. Lawyers said the company is spending $5 million per week in legal fees that could instead go to claimants and the public if litigation is stopped.
On Tuesday, Purdue requested permission to pay $34 million in bonuses to select employees, the Washington Post reported, saying they were vital to keeping the company strong as it converts into a public trust.
But Connecticut Attorney General William Tong objected in court to the proposal, saying the money should go to victims. And the request drew larger condemnation, including from Senator Joe Manchin, whose home state of West Virginia has by some measures been the hit the hardest by the opioid epidemic.
Although J&J has already been found guilty and fined by an Oklahoma judge for its role in the crisis and other companies face lawsuits, Purdue is often blamed for starting the epidemic in the 90s through its revival of oxycodone in the form of OxyContin and the aggressive and allegedly misleading sales tactics it used to market the drug to doctors, which included the claim that concerns about opioid addiction were overblown.