Plutocrats up the ante by a few billion to settle a sorry opioids saga

oxycontin-150x150A plutocratic clan has upped its ante by $1.5 billion in an apparently successful bet that using bankruptcy courts, mediation, and offering to settle giant claims in the opioid abuse and drug overdose crisis will be cheaper and less risky than battling on with thousands of plaintiffs seeking billions of dollars more.

Members of the Sackler family, thus, may elude still the harshest possible reckoning that they have fought tooth and nail to avoid — losing maximum amounts of the fortune they amassed through their company, Purdue Pharmaceutical, and its potent, path-blazing painkiller OxyContin, and getting held personally liable in the civil system in a public health nightmare that has claimed 500,000 lives in a decade.

(Family members would not be free of potential criminal charges, though experts have long said these would be difficult to press.)

Under a plan now accepted by dissenting parties, the Sacklers will pay $6 billion of a prospective $10 billion-plus settlement with thousands of states, counties, cities, Indian tribes, and individuals, all claiming that Purdue’s hype for OxyContin and opioids helped inundate the country with highly addictive, debilitating, and deadly prescription drugs.

The Sacklers, as was previously agreed in a bankruptcy proceeding whose judgment was upended by a federal court, will lose control of Purdue. It slowly will cease to exist and be converted into an enterprise producing drugs to combat opioid overdoses and other products whose profits will go to fund the proposed settlement. The family agreed to allow, without contest, the institutions that benefited from the clan’s philanthropy to scrub the Sackler name from their gifts of buildings, scholarships, and programs.

And, while the Sacklers still will not concede involvement in any wrongdoing or issue a formal apology, family members did express “regret” over the harms that have occurred. They will attend a videoconference hearing at which victims will describe the harms they suffered due to the actions of Purdue and its once, hot-selling painkiller OxyContin.

That drug, early on, provided a template for Big Pharma, doctors, hospitals, insurers, and others to inaccurately promote opioids to the public, opening the door not only to abuse of prescription painkillers but also even more powerful synthetic medications like fentanyl and illicit narcotics.

Communities across the country have been devastated as they struggled to deal with the overwhelming problems caused by addiction, debilitation, and death linked to opioids and street drugs. The abuse of opioids has led to spiking, deadly overdoses that killed 100,000 Americans last year alone as the opioid crisis worsened during the loneliness, isolation, and despair of the coronavirus pandemic. Authorities have warned that criminals have turned to tainting even lesser intoxicants like marijuana with street fentanyl, which packs a huge and potentially deadly wallop in the smallest of doses.

When plaintiffs found few other avenues to seek justice and find financial remedies for what they said were the enormous harms they have suffered in what has been one of the worst public health crises recent times, they filed huge numbers of lawsuits against Big Pharma and others. The federal court system moved to consolidate the cases and hoped a judge in Cleveland could get the huge numbers of plaintiffs and defendants to strike a “global” settlement, as occurred years ago with Big Tobacco.

But Purdue short-circuited this plan, hand-picking a quiet bankruptcy court in suburban New York and asking a judge there to not only resolve the myriad claims against the company but also to grant the Sacklers immunity from further civil lawsuits, in exchange for a settlement.

The judge heard what he described as exasperating testimony from experts that the Sacklers may have siphoned money from Purdue, stashing it offshore and pushing it further into insolvency. The family’s fortune, most of which would be shielded from civil claimants, was estimated to be as much as $13 billion.

Over time, the Sacklers’ settlement proposals have slowly risen — from $3 billion or less (minus $225 million to settle a civil action with the U.S. Justice Department), then to $4.5 billion in a plan approved by a bankruptcy judge and supported by many of the plaintiffs suing Purdue.

That plan was thrown out by a federal judge on appeal, and negotiations have continued, with the latest settlement nearing $6 billion in Sackler money winning over the objections of a minority of influential plaintiffs. They said they did not wish to hold up $750 million agreed upon in the settlement package to be paid to 100,000 individual plaintiffs, many of whom are in dire need of financial help.

Those parties will get relatively small sums in the settlement, which they have welcomed while denouncing the Sacklers and the paltry payments victims will get.

Connecticut Attorney General William Tong explained in a statement quoted by the Washington Post why dissenters agreed to the latest settlement:

“Five months ago, Connecticut said no to a Purdue bankruptcy plan that allowed the Sackler family to purchase lifetime legal immunity without so much as an apology. After months of negotiation and consultation with victims and their families, Connecticut has forced Purdue Pharma and the Sacklers to pay a $6 billion settlement and apologize in dollars, words, and actions.”

To be sure, the payment of the Purdue settlement will hardly be swift, taking years to fulfill. The various governments say the money will go to battle the opioid crisis and repay huge sums expended already in dealing with it. The courts, though, may not be through with legal issues connected with the Purdue case and whether it properly ever belonged in bankruptcy courts, which more typically deal with the disposition of assets of failed enterprises and not issues of wrongdoing and liability.

The Purdue settlement, though, provided yet another prospective resolution of big opioid-related claims, as the New York Times reported:

“Other manufacturers, distributors and big retailers such as CVS, Walgreens, and Walmart, are still defendants in opioid cases. A few have resulted in verdicts, with mixed outcomes for plaintiffs and the company defendants. Some significant settlements have already been reached, notably a $26 billion agreement last month by three major distributors — AmerisourceBergen, Cardinal Health and McKesson — along with Johnson & Johnson and states and localities, and a separate one with tribes. But seasoned lawyers involved in the cases said it will take years to resolve them all.”

In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damage that can be inflicted on them by dangerous drugs.

The opioid crisis took time to blow up, fueled by Big Pharma and abetted by doctors, nurses, hospitals, insurers, regulators, and many others in health care. While progress appeared to have been made in dealing with this mess, this public health menace exploded anew during the pandemic. It demands a full-on, urgent response to put down. We have much work to do to halt one of the major health crises confronting the country.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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