Top critics of Purdue Pharmas bankruptcy deal withdraw opposition

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Top line

Fifteen states have given up on their fight against the bankruptcy deal proposed by Purdue Pharmas, according to a federal court filed Wednesday evening, after members of the Sackler family who made billions selling OxyContina agreed to pay $ 50 million more and share more material on how they got the opioid approved and turned into a $ 30 billion drug through marketing and sales tactics that have been widely blamed for playing a key role in the opioid crisis.

Massachusetts Attorney General Maura Healey (AP Photo / Steven Senne, file)

ASSOCIATED PRESS Highlights

States including New York and Massachusetts, whose attorney general was one of Purdue’s main antagonists, have withdrawn their opposition to the $ 4.5 billion bankruptcy settlement against Purdue, according to the filing.

New concessions will make the Sacklers spit [tens of] millions of documents, said Keith Ellison, Attorney General of Minnesota, who will help tell how Purdue secured FDA approval for OxyContin and the company’s marketing and sales tactics that have helped the addicting opioid to earn over $ 30 billion in revenue.

Even if the States disagreed, they would still be barred from suing Purdue and the Sackler family once the bankruptcy settlement was approved, forcing them to use the influence they had before the agreement could not be reached.

After arguing in May that the settlement would set a terrible precedent, Massachusetts Attorney General Maura Healey, the first of her peers to sue the Sacklers, admitted the new deal was the best they could get without changing the bankruptcy law.

The regulation would fund treatment and prevention to help stop the opioid crisis, which early CDC data shows has worsened during the pandemic.

Creditors have until Wednesday to vote on the deal, and a judge will decide whether or not to approve the plan in August.

Members of the Sackler family called the development a milestone in a statement.

Nine states and Washington, DC voted against the mediation agreement.

Crucial quote

We have done our best under the current law, Healey said. As difficult as it may be to accept the resolution, we have reached the limits of what the law offers us. Bankruptcy law allows members of the Sackler family to be protected from future lawsuits under the proposed settlement, a judge said in June when he allowed the settlement to go ahead, despite arguments from Healey and others that they shouldn’t be protected if they haven’t declared bankruptcy. themselves. Democrats have proposed a law that would prevent the Sacklers and others from using corporate bankruptcy as a shield for their own wealth, but there’s no chance it will be passed anytime soon.

Key context

The $ 4.5 billion settlement, approved by the Trump administration in October, was cleared by a federal judge in June for a creditors vote, who have until July 14 to make their decision. The judge will decide whether or not to approve the final deal in August. Critics of the deal noted that the bankruptcy deal protects members of the Sackler family from further lawsuits, even if they have not personally declared bankruptcy. Family members withdrew at least $ 10 billion from the company in the decade before Purdue filed for bankruptcy.

Further reading

Top Democrat urges attorney general to dismiss Purdue Pharma bankruptcy (Forbes)

Despite years of litigation, the Sackler family behind OxyContin are still worth billions (Forbes)

Trump administration sends mixed messages on tackling opioid epidemic as election looms (Forbes)

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