Sacklers and Purdue Reach Settlement as Opioids Crisis Continues
However, the new settlement still faces two potential obstacles. Even if Judge Drain, the bankruptcy judge, signs it, the U.S. Court of Appeals for the Second Circuit must approve the plan, formally overturning the December decision that rejected the previous plan.
A key component of the deal – protecting the Sacklers’ immunity from civil suits – is being contested by the US Trustees Program, which serves as a watchdog over the bankruptcy system. The Justice Department did not respond to a request for comment as to whether it would continue to investigate the case.
Under the agreement, Purdue will be renamed Knoa Pharma and is controlled by the public council. The restructured company will promote $1.5 billion through 2024 to fund Plaintiff’s programs, and more as the company transforms into a drug maker for addiction and treatment, including other drugs, including OxyContin.
The Sacklers’ defense of the lawsuits was a major sticking point for the states that opposed the plan. The District of Columbia and nine states—California, Connecticut, Delaware, Maryland, New Hampshire, Oregon, Rhode Island, Vermont, and Washington—voted against the earlier proposal, arguing that they should have the right to prosecute the Sacklers under state civil law.
The previous deal, which included a $225 million federal settlement, there was less money, but it had to be paid out within about nine years. Under the revised plan, the Sacklers now have 18 years to pay an additional $1 billion.
As marathon negotiating sessions dragged on, the opioid crisis continued to deepen, and overdoses during the pandemic soared. The dilemma for dissenting governments was whether to continue to prosecute the Sacklers, a process that could take years with no guarantee of victory, or simply take the money now that the supply of cash had increased.
While all states, and in turn their local governments, will receive a larger payout than what was specified in the original deal, the states holding it will receive even more as a bonus for their resistance. The $750 million earmarked to compensate the more than 100,000 individual victims and survivors whose stories fuel government lawsuits will not grow, but states have committed to funding an “opioid survivor fund” specifically for them
