On Tuesday, a federal judge issued a verdict that allowed Purdue Pharma, the producer of OxyContin, to settle hundreds of lawsuits over the devastating effects of opioids.
The affluent Sackler family of Stamford, Connecticut, would sell their stake in Purdue to a new business called Knoa, with the proceeds going towards combating the opioid crisis. This proposal was authorized by the 2nd U.S. Circuit Court of Appeals in New York. They would also make a long-term monetary investment of between $5.5 and $6 billion. At least $750 million will be distributed to opioid crisis victims and their families. Victims’ compensation is included in only one other large opioid lawsuit settlement.
Even though the Sackler family did not file for bankruptcy on Tuesday, they are shielded from legal action related to the opioid crisis due to the court’s judgment.
The judgment overturned a lower court decision from 2021, which held that judges in bankruptcy court had the authority to accept a deal that would extend bankruptcy protections to people who have not formally filed for bankruptcy.
The proposed settlement to resolve claims against Purdue brought by hundreds of state, local, and Native American tribal governments and other entities centers on these safeguards.
Ed Neiger, a lawyer for individual victims, said, “It’s a great day for victims, some of whom desperately need the money and have been waiting for this day for a long time.”
Members of the Sackler family have made it plain that they will only fulfill their obligations under the agreement if they are granted certain legal protections.
In a statement released on Tuesday, the Sackler family, who owns Purdue, said, “The Sackler families believe the long-awaited implementation of this resolution is critical to providing substantial resources for people and communities in need.” To paraphrase, “We are pleased with the Court’s decision to allow the agreement to move forward and look forward to it taking effect as soon as possible.”
A federal judge issued a verdict that allowed Purdue Pharma, the producer of OxyContin, to settle hundreds of lawsuits over the devastating effects of opioids.
In its statement, Purdue hailed the decision as “a victory for Purdue’s creditors, including the states, local governments, and victims who overwhelmingly support the Plan of Reorganisation.” The business has stated that it will prioritize providing “billions of dollars in value for victim compensation, opioid crisis abatement, and overdose rescue medicines.”
After a second round of negotiations late last year, all states previously on the fence about supporting the proposal finally joined in. There was only one major holdout, the Justice Department’s U.S. Bankruptcy Trustee’s Office.
In April 2022, a lawyer from that department argued before the 2nd Circuit that it was “fundamentally inconsistent” to allow some lawsuits to be dismissed from the cases of people who did not file for bankruptcy and thereby lost most of their assets.
The Justice Department did not immediately announce its intention to appeal the Supreme Court’s verdict on Tuesday. On Tuesday, a spokeswoman said they would not comment.
A judge in the bankruptcy court will need to approve the most recent version of the deal before it can go into effect.
Even while the Sackler family is still the legal owner of Purdue, they have not been compensated in years.
A federal judge issued a verdict that allowed Purdue Pharma, the producer of OxyContin, to settle hundreds of lawsuits over the devastating effects of opioids.
After hearing arguments in the Purdue case last year, all three federal appeals judges concluded that the Sackler family could be shielded from legal action. Even if courts permit such arrangements, bankruptcy law does not, as one judge, Richard Wesley, pointed out in a separate judgment.
Regarding the opioid industry, Purdue may be the most well-known company. However, not only has one medicine manufacturer been sued by state and local governments, but so have several distribution corporations and pharmacies. Some lawsuits have gone to trial, but many more are being settled out of court.
More than $50 billion has been offered or paid out in settlements in the past few years. Drug manufacturers Johnson & Johnson and Teva, wholesalers AmerisourceBergen, Cardinal Health, McKesson, and retail pharmacies CVS, Walgreens, and Walmart all have agreements. More than half a million deaths in the United States over the previous two decades have been connected to the opioid problem, with over 70,000 deaths annually in recent years.
Fentanyl and other illegal synthetic opioids, not prescription painkillers, have been mostly responsible for deaths in recent years.
SOURCE – (AP)
