Judge OKs OxyContin maker Purdue Pharma’s $4.3B opioid payout plan

A New York judge on Wednesday approved a bankruptcy settlement that pays victims across the country but shields the Sackler family, which owns OxyContin maker Purdue Pharma, from future lawsuits over the opioid crisis.

U.S. Bankruptcy Judge Robert Drain signed off on the plan which grants the family legal protection in exchange for paying $4.3 billion over a nine-year period. It also requires the family to transfer ownership of Purdue to a trust that will dissolve the drugmaker and turn it into a new company dedicated to combating the opioid epidemic, which has killed more than 500,000 Americans over the last two decades.

The family members’ payment and profits from the new company will be used to compensate some victims of the crisis, with payouts estimated between $3,500 and $48,000.

The judge’s decision ends years of litigation with states and local governments that alleged the company and its owners aggressively marketed OxyContin despite knowing it was highly addictive and subject to abuse.

Judge Drain said that while he does not have “fondness for the Sacklers or sympathy for them,” collecting money from them through lawsuits instead of a joint settlement would be complicated, the Associated Press reported.

Washington state Attorney General Bob Ferguson, however, said he plans to appeal the order which “is insulting to victims of the opioid epidemic who had no voice in these proceedings.”

“This order lets the Sacklers off the hook by granting them permanent immunity from lawsuits in exchange for a fraction of the profits they made from the opioid epidemic — and sends a message that billionaires operate by a different set of rules than everybody else,” Mr. Ferguson said in a statement on Wednesday.

The bankruptcy court, he said, does not have the authority to block state attorneys general from enforcing state law, which includes the ability to take future legal action against the family.

Two dozen other state attorneys general, Washington, D.C., Seattle and the Justice Department’s U.S. Trustee Program, which oversees bankruptcy-related cases, have also opposed the settlement over its contentious provision giving legal protections to the Sackler family. 

An appeal could halt the cash payouts and reignite other suits targeting Purdue and the Sackler family members.

Purdue Pharma said in a statement late Wednesday that the settlement would avert “years of value-destructive litigation” and would guarantee the funds provided would go directly to help people and jurisdictions most affected by the crisis.

The bankruptcy judge, based in White Plains, New York, said other unhappy with the settlement should continue to negotiate rather than launch an entire new legal battle.

“Bitterness over the outcome of this case is completely understandable,” Judge Drain said. “But one also has to look at the process and the issues and risks and rewards and alternatives of continued litigation versus the settlement laid out in the plan.”