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OxyContin-maker Purdue Pharma filed for bankruptcy in New York State Sunday, which effectively stalls the 2,000-plus opioid lawsuits accusing the company of exacerbating the country’s spiraling opioid crisis. But don’t expect a bevy of Democratic-controlled states to stop going after the Sacklers, the family behind the Purdue drug empire.
The Chapter 11 filing comes as part of a $10 billion tentative settlement reached last week with 24 states, plus thousands of cities, counties, and tribes also suing the company. The money will go toward helping states and communities address a widespread opioid overdose crisis, which has killed 400,000 people over the last two decades. And $3 billion of the settlement will come directly from the Sacklers.
What the settlement won’t do, however, is force either the company or the Sacklers to admit any wrongdoing in the opioid crisis — and several state attorneys general have now vowed to sue to Sacklers for allegedly creating deceptive advertising campaigns that painted OxyContin as a non-addictive alternative for treating pain.
For example, Massachusetts — one of the states already wrapped up in a lawsuit against the billionaire clan — alleges the Sackler family knew its drug was addictive but flooded communities with sales representatives to hawk OxyContin nonetheless. Richard Sackler, the former chairman and president of the company, allegedly pressed for more aggressive marketing tactics even as some within the company expressed concerns about the drug’s image. Sackler said in an email obtained through Massachusetts’ lawsuit his intent was for the debut of OxyContin to “bury the competition," according to STAT News.
New York, New Jersey, and Connecticut sued the Sacklers ahead of the settlement agreement, while North Carolina’s attorney general said he was preparing to sue the family after settlement talks began to break down. Pennsylvania’s attorney general sued the Sacklers last week.
“If Purdue declares bankruptcy, good riddance to this company that helped create and fuel the largest drug crisis in our nation’s history. Along with many other states, I wasn’t satisfied with Purdue’s position," North Carolina Attorney General Josh Stein said in a statement last week.
In all, 24 states say they aren’t sold on the terms of the $10 billion settlement, according to Reuters, but will likely still take the money once it’s pooled and negotiated in bankruptcy court. All of the states are likely to contest the settlement terms in bankruptcy court, sue the Sacklers, or both.
States were previously vying for the Sacklers to give up $4.5 billion in the company’s settlement deal, a proposition the family balked at. And some have already alleged the family has more cash to give than it's letting on.
New York Attorney General Letitia James announced Friday that attorneys had unearthed $1 billion in undisclosed wire transfers from Purdue to private bank accounts, some of them Swiss, in the course of the state’s lawsuit against the Sacklers. New York and Massachusetts have alleged such offshore accounts and shell companies have unfairly shielded some of the Sacklers’ cash from litigation. Much of the family’s wealth is supposedly held overseas, according to NBC News.
Through the settlement agreement reached last week, it’s unclear which plaintiffs will be paid first, how much they’ll be paid, or how those funds will have to be spent. Those questions will now move to federal bankruptcy court, rather than continuing along with a massive, combined lawsuit against opioid manufacturers and distributors that will head to trial in Cleveland next month.
“This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis,” Steve Miller, chairman of Purdue’s board of directors, said in a statement. The company has long denied any wrongdoing.
“We will continue to work with state attorneys general and other plaintiff representatives to finalize and implement this agreement as quickly as possible,” Miller continued.
The Sacklers have been pegged as the bogeyman of the opioid epidemic, since their widely known drug OxyContin was introduced in 1996. But the bulk of overdose deaths have been the result of illicit opioid drugs such as fentanyl and heroin, rather than prescription painkillers. In some instances, dependence on prescription painkillers led people to seek out harsher, illicit street opioids.
Editor's note: A previous version of this story stated that 26 states opposed Purdue Pharma's settlement, citing NPR. The text has been updated to state that 24 states do, citing Reuters.
Cover image: A gate protects the entrance of the Rooksnest estate near Lambourn, England, Tuesday, Aug. 6, 2019. The manor is the domain of Theresa Sackler, widow of one of Purdue Pharma’s founders and, until 2018, a member of the company’s board of directors. (AP Photo/Frank Augstein)