Senators, Attys. General Balk At DOJ, Purdue Pharma Deal

Liz Carey

Washington, D.C. (WorkersCompensation.com) – At least 25 state Attorneys General and six U.S. Senators oppose the $8 billion settlement agreement between the U.S. Department of Justice, Purdue Pharma and the Sackler family in regard to their role in the opioid crisis.

Recently, U.S. Sens. Elizabeth Warren (D-Mass.), Ed Markey (D-Mass.),Tina Smith (D-Minn.), Chris Van Hollen (D-Md.), Richard Blumenthal (D-Conn.), and Ron Wyden (D-Ore.) wrote a letter to U.S. Attorney General William Barr asking the DOJ to provide information on how the department decided on the irregular agreement and what alternatives the department had considered as well.

At issue for the senators, and states’ attorneys general, was the provision in the agreement that would dissolve Purdue Pharma and reorganize it as a “public benefit company,” with the profits from the sales of opioids the company produces going to abatement programs across the country.

That provision, the senators said, creates a “significant conflict of interest” by putting state and local governments in a position to profit from the drug over which they are suing the company.

“While the full contours of the proposal remain murky, the proposed public benefit company arrangement raises a number of urgent concerns. If approved, this arrangement could create a significant conflict of interest, giving the same states and local governments that are responsible for regulating the opioid industry a financial interest in the sale of opioids,” the senators wrote. “The terms of the settlement would force state and local governments, victims and survivors, and other stakeholders to accept an arrangement that many had already rejected or played no role in developing.”

Purdue Pharma was the leading manufacturer of Oxycontin, an opioid widely thought to be the start of the opioid epidemic. Purdue is owned by the Sackler family, who has taken more than $13 billion from the company in the past few years.

As part of the settlement, Perdue will pay $3.544 billion in criminal fines and pay an additional $2 billion in forfeiture of past profits. The company will also pay $2.8 billion to resolve the company’s civil liabilities. Much of that money will come from the PBC.

Almost as soon as the agreement was announced it faced backlash from attorney generals who had sued the company for its part in the opioid crisis.

In an October letter to Barr, 25 states’ attorneys general asked that Barr overturn the agreement.

“We ask you to reverse that decision for three reasons. First, as we explained above, the Sacklers’ proposal to cloak the OxyContin business in public ownership compromises the proper roles of the private sector and government. Thousands of Americans have died, and it is a top priority of every State to enforce the law against the perpetrators whose misconduct caused the opioid crisis. The last business our States should protect with special public status is this opioid company,” the attorneys general wrote. “Second, even if DOJ disagrees with the principles that keep government out of the opioid business, DOJ should not impose its view on States, cities, families, and all other stakeholders in the bankruptcy. Instead, the relevant parties in the bankruptcy should be permitted to negotiate without DOJ putting its thumb on the scale.”

The attorneys general said they would continue to oppose the plan and vote against it in court as the proposal moves through the court system. In September 2019, Purdue announced it would be declaring bankruptcy citing the many opioid lawsuits against it. Because of that, the agreement with the DOJ will have to go through the bankruptcy court, and others, in order to get approved.

In their letter, the senators asked the DOJ to provide them with information about its process for deciding to include the reorganization of the company into the settlement agreement, what alternatives it considered, the precedent for the DOJ’s decision and how the DOJ assessed the value of the resulting PBC.

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