By Dietrich Knauth and Tom Hals
(Reuters) – Purdue Pharma on Wednesday is urging a bankruptcy judge to approve a $6 billion opioid settlement funded by its Sackler family owners, over objections from 20 states and the U.S. Department of Justice’s bankruptcy watchdog.
Purdue, which makes the addictive painkiller OxyContin, has been sued thousands of times over the drug’s central role in the U.S. opioid epidemic.
Under the settlement, the Sacklers would pay between $5.5 and $6 billion to a trust that will be used to pay the claims of opioid creditors, including states, victims of addiction, hospitals, and municipalities.
The Sackler family owners said last week in a statement that they “sincerely regret” that OxyContin “unexpectedly became part of an opioid crisis.” The family members said they acted lawfully but a settlement was by far the best way to help resolve a “serious and complex public health crisis.”
There have been nearly 500,000 U.S. opioid overdose deaths over two decades, according to the U.S. Centers for Disease Control and Prevention.
The new agreement replaces an earlier $4.3 billion agreement, which was upended on appeal after nine attorneys general and others argued that the Sacklers should not receive sweeping protection from current and future opioid lawsuits as part of the deal.
The revised deal is opposed by the DOJ and several states that supported the earlier settlement.
The DOJ’s Office of the U.S. Trustee said on Thursday that the bankruptcy court does not have authority to approve the settlement because an appeals court must first decide whether the Sacklers can receive sweeping legal immunity in exchange for the payment.
The Sacklers’ payment is contingent on ending their exposure to opioid lawsuits, but a U.S. District Judge ruled in December that the protections they seek fall outside the bankruptcy court’s authority. Purdue is appealing that decision in the U.S. 2nd Circuit Court of Appeals.
The nine attorneys general that negotiated the deal have agreed to drop their opposition to granting the Sacklers immunity from current and future opioid lawsuits.
The 20 states that objected to the new settlement after agreeing to the prior deal oppose inclusion of a $277 million payment exclusively to the states that negotiated the $6 billion deal. Some have said it would unfairly reduce the percentage of funds received to abate the opioid crisis in their own states.
Purdue said last week that the new settlement would provide additional funding for opioid abatement programs, overdose rescue medicines, and victims, while putting the company on track to resolve its bankruptcy case on “an expedited schedule.”
The revised settlement must still be written into a new reorganization plan before getting final approval in bankruptcy court.
Purdue filed for bankruptcy in 2019 in the face of thousands of lawsuits accusing it and members of the Sackler family of igniting the opioid epidemic through deceptive marketing of OxyContin.
Purdue pleaded guilty to misbranding and fraud charges related to its OxyContin marketing in 2007 and 2020. Members of the Sackler family have denied wrongdoing.
(Reporting by Dietrich Knauth and Tom Hals; Editing by Noeleen Walder and Bill Berkrot)
