More than a dozen states have dropped their long-standing objections to OxyContin maker Purdue Pharma’s restructuring plan, moving the company closer to settling its bankruptcy case and turning itself into a new entity. It helps combat the US opioid epidemic through its own profits.
Several state attorney general’s agreements, including the most aggressively opposed to Purdue’s original settlement proposal, were disclosed late Wednesday in a filing in US Bankruptcy Court in White Plains, NY. exit plan.
The new settlement terms call for Purdue to make public millions of internal documents many attorneys general, including Massachusetts and New York, have demanded as a way to hold the company accountable.
Attorney generals for both states were among 15 who agreed to the new plan, joining half of the states that had previously approved it. Nine states and the District of Columbia did not sign.
Purdue sought bankruptcy protection in 2019, settling nearly 3,000 lawsuits it faced from state and local governments and other entities. He claimed the company’s marketing of its potent prescription pain reliever contributed to a crisis that has been linked to nearly 500,000 deaths in the US over the past two decades.
The court filing came from a bankruptcy court-appointed arbitrator and showed that members of the wealthy Sackler family, who own Purdue, agreed to increase their cash contributions to the settlement by $50 million. They will allow the $175 million donated to the Sackler family to go toward mitigating the crisis.
In total, members of the Sackler family are contributing $4.5 billion in cash to the settlement.
In addition, the settlement prohibits the Sackler family from acquiring naming rights related to their charitable donation until they have paid all money owed under the settlement and from leaving all business interests related to the manufacture or sale of opioids. Have given.
Attempts to reach representatives for the Sacklers, Purdue and the attorney general late Wednesday and early Thursday were unsuccessful.
Purdue’s plan also calls for members of the Sackler family to relinquish ownership of the Connecticut-based company, which it says could be worth $10 billion over time. This includes the value of the overdose-reversal drugs the company plans to produce.
Money from the deal is to go to government entities that, along with individual victims and their families, have agreed to use it to address the opioid crisis.
The broad outline of the plan is almost the same as two years ago when Purdue first sought bankruptcy protection.
Most groups representing the victims and various creditors, including local governments, reluctantly supported the plan. But the state attorney general was still deeply divided, with about half of whom supported the plan and half fought against it.
The attorney general who opposed the plan said he did not like the idea of relying on profits from continued sales of prescription painkillers to combat the opioid epidemic. He also said the deal was not enough to hold members of the Sackler family accountable or create a public document that could help explain the company’s role in the crisis.
Last month, Massachusetts Attorney General Maura Healy, who along with Purdue was the first to sue members of the Sackler family, told the Associated Press, “They will not be required to pay anything for the damage and devastation caused to the Sacklers’ families and communities.” are not offering around this country.”
Purdue’s restructuring plan gets support from additional states two weeks before the deadline to formally object and about a month before hearing whether it should be accepted.
With only nine states and the District of Columbia remaining opposed to the plan, it is more likely that a federal bankruptcy judge will ratify the deal.
Activists also dislike it, and two Democratic members of Congress have asked the US Justice Department to oppose it. Reps. Caroline Maloney of New York and Mark Dessoulier of California said the deal would unfairly protect members of the Sackler family from civil lawsuits. There is no weight in the Department of Justice.
Last year, the company pleaded guilty to federal criminal charges that included conspiracy to defraud the United States and violation of anti-kickback laws. As part of the deal, the company agreed to pay $225 million to the federal government. More than $8 billion in fines had to be waived if the company entered into a bankruptcy settlement that worked to fight the opioid crisis.
In a separate civil settlement announced at the same time, members of the Sackler family agreed to pay $225 million to the federal government while doing no wrong.
The opioid crisis includes an overdose of prescription drugs as well as illegal ones such as heroin and fentanyl. Purdue’s bankruptcy case is the highest-profile piece of complex nationwide litigation against drug manufacturers, distribution companies and pharmacies.
Trials against other companies in the industry are ongoing in California, New York and West Virginia, and talks are on to settle multiple claims.