Purdue Pharma Settlement Gives Sackler Family ‘Global Peace’ from Opioid Liability

Liz Carey

New York, NY (WorkersCompensation.com) – The recent approval of a bankruptcy settlement in the case against Purdue Pharma for its role in the opioid crisis granted the Sackler Family that owned the company sweeping immunity from opioid lawsuits.

Federal Judge Robert Drain approved the settlement at a hearing in White Plains, New York, which dissolved the company, but grants the Sacklers “global peace” from any liability for their role in the opioid crisis still ravaging the country.

Negotiated in a series of mediation sessions over the past two years, the bankruptcy plan calls for the Sackler family to forfeit ownership of Purdue Pharma and pay roughly $4.3 billion, while granting “releases” from liability for harm caused by opioids, including OxyContin made by Purdue Pharma, to the Sacklers, many of their associates and their other companies and trusts. It also requires the family to relinquish control of family foundations with over $175 million in assets, and turn them over to the trustees of a National Opioid Abatement Trust.

The operating assets of Purdue Pharma will be transferred to a new public benefit company, none of whose stakeholders can be from the Sackler family. The public benefit company will continue to make opioid products, with the profits of all sales going to opioid abatement programs.

The settlement resolves all civil litigation against the Sackler family members, Purdue Pharma and other parties. But the settlement does not protect the company or the family from any criminal charges.

The Sackler family filed for bankruptcy protection in 2019, to protect the family’s assets from thousands of lawsuits filed against the company for their role in the opioid crisis. The U.S. Department of Justice announced a settlement with the family and company in 2020, that needed to be approved by the bankruptcy court.

Drain expressed some disappointment in the settlement’s freeing the Sackler’s of any liability.

“This is a bitter result,” Drain said. “I believe that at least some of the Sackler parties have liability for those [opioid OxyContin] claims. … I would have expected a higher settlement.”

In his ruling, Drain said the harm caused by Purdue Pharma’s opioid products contributed to a “massive public health crisis.”

On August 18, in a rare court appearance, Dr. Richard Sacker, a former president and co-chairman of board of directors of Purdue Pharma, testified during a bankruptcy hearing they did not. During the third hour of testimony, in response to questions about whether or not he, his family or his company bore any responsibility for the opioid crisis, Sackler only replied, “No.”

The family maintained their denials in statements on Wednesday.

“While we dispute the allegations that have been made about our family, we have embraced this path in order to help combat a serious and complex public health crisis. We hope that the resolution will signal the beginning of a far-reaching effort to deliver assistance where it is most needed,” the family said.

They did, however, express remorse for the drug’s role in the epidemic.

“It distresses us greatly that it also became involved in suffering from addiction or abuse. We are truly sorry for the suffering and loss people have experienced and recognize the anger or hurt that many people have felt alongside their grief,” the statement said.

New York Attorney General Letitia James said the settlement will inject billions into funds that will prevent and treat opioid addiction issues, as well as fund recovery programs in communities across the country.

“No deal is perfect, and no amount of money will ever make up for the hundreds of thousands who lost their lives, the millions who became addicted, or the countless families torn apart by this crisis, but these funds will be used to prevent future death and destruction as a result of the opioid epidemic,” James said. “For nearly two years, Purdue Pharma and the Sackler family have used every delay tactic possible and misused the courts, all in an effort to shield their misconduct. But this resolution will deliver $4.5 billion into communities ravaged by opioids on an accelerated timetable and it gets one of the nation’s most harmful drug dealers out of the opioid business once and for all. We’ll be able to more quickly invest these funds in prevention, education, and treatment programs, and put an end to the delays and legal maneuvering that could possibly continue for years and across multiple continents.”

The settlement will also make available to the public information related to the company’s and the family’s roles in the opioid epidemic by requiring the disclosure of tens of millions of documents.

The conditionally approved mediation resolves Purdue Pharma’s part of a March 2019 lawsuit filed by James against Purdue Pharma, the Sacklers, Janssen Pharmaceuticals and its affiiliates (including its parent company Johnson & Johnson), Mallinckrodt LLC, Endo Health Solutions, Teva Pharmaceuticals USA and Allergan Finance LLC, as well as distributors McKesson Corporation, Cardinal Health Inc., Amerisource Bergen Drug Corporation, and Rochester Drug Cooperative Inc.

Cases against Mallinckrodt and Rochester Drug Cooperative are in U.S. Bankruptcy Court. In June, a settlement ended Johnson & Johnson’s sale of opioids, while a settlement with McKesson, Cardinal Health and Amerisource Bergen was settled in July. Those settlements had a global value of an estimated $26 billion.

The trial against all the remaining defendants is ongoing in a Suffolk County State Supreme Court.

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