15 states support Purdue Pharma plan to reorganize and combat US opioid crisis | Opioids crisis

OxyContin maker Purdue Pharma’s plan to reorganize into a new entity that helps combat the US opioid epidemic got a big boost as 15 states that had previously opposed the new business model now support it.

The agreement from multiple state attorneys general, including those who had most aggressively opposed Purdue’s original settlement proposal, was disclosed late Wednesday night in a filing in US bankruptcy court in White Plains, New York. It followed weeks of intense mediations that resulted in changes to Purdue’s original exit plan.

The new settlement terms call for Purdue to make tens of millions of internal documents public, a step several attorneys general, including those for Massachusetts and New York, had demanded as a way to hold the company accountable.

In a joint online news conference Thursday, some of the attorneys general who signed on noted that their states are in line to get more money faster to fund drug treatment and prevention.

The North Carolina attorney general, Josh Stein, noted Thursday that the deal includes about $1.5bn more than it initially did.

But they continued to express ire with the company and especially members of the wealthy Sackler family who own it and have not accepted any blame. “No one is happy with the settlement,” the New York attorney general, Letitia James, said. “Can the Sacklers do more? Hell yeah, they can do a lot better, but it should first begin with an apology.”

In a statement, members of the Sackler family called the support of more states “an important step toward providing substantial resources for people and communities in need”.

Still, nine states and the District of Columbia did not sign on. One of the holdouts, Washington attorney general Bob Ferguson, complained: “This settlement plan allows the Sacklers to walk away as billionaires with a legal shield for life.”

Purdue said in a statement that it will try to build “even greater consensus” for its plan.

Last year, the company pleaded guilty to federal criminal charges and agreed to pay $225m to the federal government.

In a separate civil settlement announced at the same time, Sackler family members agreed to pay the federal government $225m, while admitting no wrongdoing.

Purdue also sought bankruptcy protection in 2019 as a way to settle about 3,000 lawsuits it faced from state and local governments and other entities. The lawsuits claimed the company’s aggressive marketing of its powerful prescription painkiller contributed to a crisis that has been linked to nearly 500,000 deaths in the US over the past two decades.

Purdue’s bankruptcy case is the highest-profile piece of complicated nationwide litigation against drugmakers, distribution companies and pharmacies. The court filing came from a mediator appointed by the bankruptcy court and shows that members of the Sackler family agreed to increase their cash contribution to the settlement by $50m. They also will allow $175m held in Sackler family charities to go toward abating the crisis.

In all, Sackler family members are contributing $4.5bn in cash and assets in the charitable funds toward the settlement. They are not admitting any wrongdoing and no court has found any by a family member.

The agreement prohibits the Sackler family from obtaining naming rights related to their charitable donations until they have paid all the money owed under the settlement and have given up all business interests related to the manufacturing or sale of opioids.

Purdue’s plan also calls for members of the Sackler family to give up ownership of the Connecticut-based company as part of a sweeping deal it says could be worth $10bn over time. That includes the value of overdose-reversal drugs the company is planning to produce.

Money from the deal will go to government entities, which have agreed to use the funds to address the opioid crisis, along with helping individual victims and their families.

Massachusetts’ Maura Healey, who had been the first attorney general to sue members of the Sackler family, praised the modified deal in a statement early Thursday. She pointed to the $90m her state would receive and the arrangement allowing the company to waive attorney-client privilege and release hundreds of thousands of confidential communications with lawyers about its tactics for selling opioids and other matters.

“While I know this resolution does not bring back loved ones or undo the evil of what the Sacklers did, forcing them to turn over their secrets by providing all the documents, forcing them to repay billions, forcing the Sacklers out of the opioid business and shutting down Purdue will help stop anything like this from ever happening again,” Healey said.

Yet activists dislike the plan, and two Democratic members of Congress have asked the US Department of Justice to oppose it. Representatives Carolyn Maloney of New York and Mark DeSaulnier of California said in a statement Thursday that allowing Sackler family members “to obtain legal immunity through Purdue’s bankruptcy would be a tragic miscarriage of justice”. The justice department has not weighed in.

Most groups representing various creditors, including victims and local governments, had grudgingly supported the plan. But state attorneys general until now were deeply divided, with about half of them supporting the plan and half fighting against it.

The attorneys general who had opposed the plan said they didn’t like the idea of having to rely on profits from the continued sale of prescription painkillers to combat the opioid epidemic. The revised deal lets state and local governments opt out of receiving those funds. Attorneys general also said the deal didn’t do enough to hold Sackler family members accountable or to make public documents that could help explain the company’s role in the crisis.

Nevertheless, the new support from additional states comes less than two weeks before the deadline to object formally to Purdue’s reorganization plan and about a month before a hearing on whether it should be accepted.

With just nine states and the District of Columbia remaining opposed to the plan, it is likely the federal bankruptcy judge will confirm the deal.

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