Members of the billionaire Sackler family that own Purdue Pharma LP are weighing whether to add $1 billion to the OxyContin-maker’s faltering opioid settlement bid in an effort to win over holdouts, according to people familiar with the offer.
The move would bring the family’s total contribution to $5.325 billion to get a handful of state attorneys general to drop their opposition to Purdue’s bankruptcy plan, the people said. In return, the states would abandon appeals of the Sacklers’ demands to be freed from liability in current and future opioid lawsuits, the people added.
“This sounds like a good deal for the Sacklers to me,” Carl Tobias, a University of Richmond law professor who has followed opioid litigation and the Purdue bankruptcy case. “They get their releases for another $1 billion after they helped devastate large swaths of the country with OxyContin? I doubt it’s enough.”
Purdue and other companies involved in the opioid industry face thousands of lawsuits by states and municipalities that allege they helped create a crisis that’s claimed hundreds of thousands of lives in the U.S. Most of the cases are still pending, though some companies, including Johnson & Johnson and McKesson Corp., have proposed broad settlements.
The latest development is a result of court-ordered mediation that came after a judge in December threw out the original settlement deal over litigation releases granted to Sackler family members. That ruling came after some states appealed the deal, saying Purdue’s owners shouldn’t get lifetime immunity from suits targeting them for the company’s role in the U.S. opioid epidemic.
A representative for Purdue Pharma said the mediation is governed by strict court-ordered confidentiality and declined to comment further. A representative for the Mortimer Sackler wing of the family declined to comment. Representatives for the Raymond Sackler wing of the family didn’t immediately respond to a request for comment.
‘Even Closer’
U.S. Bankruptcy Judge Shelley Chapman — serving as mediator in the Purdue case — said earlier this week the family and states are “even closer” to a deal than before. Chapman asked Judge Robert Drain, who is overseeing Purdue’s bankruptcy, to extend the mediation to Feb. 16.
Purdue’s settlement would let the company resolve trillions of dollars in claims against it over its role in the opioid crisis. The accord calls for handing nearly all of the drugmaker’s assets to the states and local municipalities that sued and would provide billions of dollars to anti-addiction programs.
States and local governments accuse Purdue of duping doctors and patients about OxyContin’s addictive properties and blame the Sacklers and the company for fueling a public-health crisis. Their suits seek compensation for billions of tax dollars spent battling the opioid epidemic, which has claimed almost 500,000 lives in the U.S. over the past two decades.
As part of the $1 billion increase to the settlement, the Sacklers would get more than nine years to pay that portion, the people said. That’s longer than the payout deadline for the original $4.325 billion deal, they said.
The Holdouts
The expanded offer must be approved by attorneys general from eight states and the District of Columbia, who rebuffed the family’s earlier offer, the people added. Some of the states accused the Sacklers of overreach for pushing the controversial litigation-immunity provisions for family members.
Representatives of Maryland Attorney General Brian Frosh, Connecticut Attorney General William Tong, District of Columbia Attorney General Karl Racine, Washington Attorney General Bob Ferguson and Oregon Attorney General Ellen Rosenblum declined Thursday to comment. A spokesperson for California Attorney General Rob Bonta didn’t immediately respond to a request for comment.
Even though the family is considering a bump in their cash contribution, that may not be enough to get all the states on board, said Elizabeth Burch, a University of Georgia law professor who has been following the Purdue case. “For some people, I don’t think it’s all about the money,” Burch said in an interview. “It’s about accountability. Some see the Sacklers’ cash as the equivalent of hush money.”
The bankruptcy case is Purdue Pharma LP, 19-23649, U.S. Bankruptcy Court for the Southern District of New York (White Plains).
Photo: A bottle of Purdue Pharma L.P. OxyContin medication sits on a pharmacy shelf in Provo, Utah, U.S., on Wednesday, Aug. 31, 2016. Photographer: George Frey/Bloomberg
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