Seven months after the Supreme Court issued a settlement that would have settled thousands of opioid lawsuits against Purdue Pharma, the company’s owners, members of the Sackler family, have increased their money to settle the case — but with a novel catch.
Under the terms of the new settlement, the Sacklers would not receive immunity from future opioid lawsuits, a condition they had long insisted on but the court’s ruling invalidated.
Instead, they will pay up to $6.5 billion – $500 million more than the previous agreement – but with a new condition: The plaintiffs, including states, municipalities and individuals, will have to set aside up to $800 million in a similar legal account. -fund to protect billionaires to fight such crimes, according to people familiar with the negotiations.
More details of the draft – but not the legal defense fund – were announced Thursday by New York’s attorney general, Letitia James. He said the total compensation is up to $7.4 billion, which will include $897 million from Purdue.
New York could receive up to $250 million, he said.
“The Sackler family continuously pursued profit at the expense of vulnerable patients and played a significant role in starting and fueling the opioid epidemic,” Ms. James said.
Once the deal is completed, he added, the Sacklers “will no longer have control over Purdue and will no longer be allowed to sell opioids in the United States.”
Along with other settlements in opioid courts across the country, these payments are intended to support efforts to prevent and treat addiction in hard-hit communities across the country.
“We are very pleased that a new agreement has been reached that will bring billions of dollars to compensate victims, stop the opioid crisis, and bring treatment and rescue drugs that will save lives,” Purdue said in a statement, noting that the restructuring. the plan was still in progress.
The Sacklers did not respond to requests for comment.
How many plaintiffs will agree to the new terms is unclear. Ms. James noted that 14 other states involved in the negotiations were on board: Florida, Connecticut, Massachusetts, Tennessee, California, Colorado, Illinois, Delaware, Pennsylvania, Oregon, Texas, Vermont, Virginia and West Virginia.
But the deal has to be sold to all the plaintiffs — not just the remaining states and thousands of local governments, but hundreds of Native American tribes and 140,000 personal injury victims.
While many of those accepting the settlement found the Sacklers’ reserve fund a hard pill to swallow, the truth is that in the years of Purdue’s lawsuits piling up, not a single dollar has been sent to the plaintiffs, hurting for immediate and ongoing damages. of the opioid crisis. In recent months, there has been an urgent need for a new deal to start flowing. Under the latest terms, those who oppose the deal have the right to file new lawsuits against the Sacklers. Under the previous settlement, they were prevented from doing so.
In fact, the Sacklers’ legal reserve could be quickly depleted: Already, lawsuits against the Sacklers have been threatened by a number of states, counties, cities and individuals.
A spokesman for Washington State, which has succeeded in pursuing other pharmaceutical companies instead of signing national agreements, said the state is considering its options.
The states, which are responsible for the bulk of the reserve fund payments, will have to keep at least $200 million in the account, with contributions totaling $800 million. After five years, unused funds will begin returning to the states.
Final figures for how much of the Purdue settlement will be deducted to cover attorneys, consultants and administrative fees are still being negotiated.
The Sacklers will pay about $3 billion over the first three years, with remaining payments over an additional 12 years.
If the plan is approved by the plaintiffs, the Department of Justice unit that oversees the bankruptcy program called the US Trustee and the federal bankruptcy judge, Purdue will emerge at the end of this year from bankruptcy that has blocked it since 2019. immediately paid its $897 million fee to the parties that signed the agreement.
At that time, 15 years of Sackler payments would also begin. And most of the lawsuits that began more than a decade ago — which eventually turned into a series of unwieldy lawsuits brought by cities, states, tribes, hospitals and individual victims, and contested by multiple groups of lawyers — will likely end.
In a plan denied by the Supreme Court, the Sacklers, who have been portrayed for a long time in all films, television and news articles as the public face of the predatory opioid manufacturers, are seeking a guarantee to put 6 billion dollars: a ban on any current and future claims against them related. at Purdue and opioids.
Purdue itself receives that protection as a standard benefit provided when a company emerges from bankruptcy. But because the Sacklers did not file for bankruptcy on their own, the Supreme Court ruled in June that granting them permanent public protection was outside the scope of bankruptcy law.
The purpose of the legal maintenance fund, where, in effect, petitioners will be paying to defend the Sacklers against other petitioners, is to satisfy the court’s decision.
“If states are expected to fund the Sacklers’ legal defense, petitioners and the public will want to hear more about the impact of that money going to the Sacklers and their lawyers than to cut opioids,” said Melissa B. Jacoby. bankruptcy specialist at the University of North Carolina School of Law.
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