Enlarge / Friends and family members of people who have died during the opioid epidemic protest against a bankruptcy deal with Purdue Pharmaceuticals that allows the Sackler family to avoid criminal prosecution and to keep billions of dollars in private wealth, on August 9, 2021, outside the Federal courthouse in White Plains, New York.
A federal bankruptcy judge on Wednesday approved a $4.5 billion opioid settlement that provides sweeping lifetime legal immunity for the billionaire Sackler family behind Purdue Pharma.
“This is a bitter result,” Federal Judge Robert Drain said Wednesday in a lengthy explanation of his approval of the settlement. “I believe that at least some of the Sackler parties also have liability for those [opioid] claims… I would have expected a higher settlement.”
The Sacklers owned and were largely directing Purdue Pharma in the late 1990s when the company allegedly began aggressively and deceptively selling its highly addictive opioid painkiller, OxyContin. Purdue, which has twice pled guilty for wrongdoing in marketing OxyContin, is widely seen as sparking the nationwide epidemic of opioid addiction and overdoses. The opioid crisis has killed nearly 500,000 people in the US in the past two decades.
The Sacklers, who are currently worth about $11 billion, have estimated that they earned more than $10 billion from opioid sales, according to NPR. They will get to keep most of their billions in the settlement and shield it from future opioid-related legal challenges.
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The deal
The $4.5 billion settlement brings to a close thousands of lawsuits brought by states, local governments, tribes, individuals, and hospitals. Under the agreement, Purdue Pharma, which had declared bankruptcy, will be dissolved, and the Sacklers will never again be allowed to manufacture opioids. In an initial announcement of the agreement on July 8, New York Attorney General Letitia James explained that the Sackler family will hand over control of family foundations, valued at no less than $175 million, to a public trust dedicated to abating the opioid crisis. They will also provide $4.325 billion to fund “prevention, treatment, and recovery programs in communities across the country.”
However, that $4.325 billion will be doled out over nine years. In that time frame, the Sacklers’ wealth will rise from about $11 billion to an estimated $14.6 billion, according to an analysis commissioned by state attorneys general.
The agreement also grants the Sacklers—who have not filed for bankruptcy—”releases” from liability for harm caused by OxyContin and other opioids. The immunity extends to the Sacklers’ other companies and trusts and to hundreds of associates.
Though many states strongly objected to granting immunity, the Sacklers demanded these protections and threatened to walk away from the rest of the $4.5 billion settlement if they weren’t included.
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This, according to Judge Drain, forced his hand in approving the settlement. In his approval, Judge Drain narrowed who among the Sacklers’ associates would be shielded from liability. He also excluded immunity from most non-opioid claims. But the main legal releases were left in place. “Without the releases, the plan would unravel,” he said, according to Stat. And if the settlement plan had failed, litigation would advance to a stage of bankruptcy called Chapter 7, which would make it far more difficult to see any payouts, according to the judge.
“It is clear to me after a lengthy trial that there is now no other reasonably conceivable means to achieve this result,” Judge Drain said.
Murky future
Many parties seemed to agree with the judge and grudgingly accepted the terms.
“No deal is perfect, and no amount of money will ever make up for the hundreds of thousands who lost their lives, the millions who became addicted, or the countless families torn apart by this crisis, but these funds will be used to prevent future death and destruction as a result of the opioid epidemic,” New York Attorney General James said in a statement Wednesday.
Still, others remain vehemently opposed to the deal and vow to appeal the settlement and push for bankruptcy reform.
In a statement Wednesday, Connecticut Attorney General William Tong said that he will appeal and is currently weighing all legal options to continue fighting the Sacklers in court. “The Sacklers are not bankrupt, and they should not be allowed to manipulate bankruptcy laws to evade justice and protect their blood money,” Tong said. “This decision is a slap in the face to the millions of suffering and grieving Americans who have lost their lives and loved ones due to the Sacklers’ calculated and craven pursuit of opioid profits.”
Likewise, Washington Attorney General Bob Ferguson also vowed to appeal. “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,” Ferguson said. “This order is insulting to victims of the opioid epidemic who had no voice in these proceedings—and must be appealed.”
NPR also notes that the Department of Justice could appeal the settlement. The outlet reported on Tuesday that Purdue had launched a stealth campaign to discourage the DOJ from doing so.
In a statement, the family of Purdue Pharma founder Raymond Sackler called the settlement approval “an important step toward providing substantial resources for people and communities in need, and it is our hope these funds will help achieve that goal.”
