Purdue has long contested claims it played a role in creating the opioid epidemic, but now the company has inked a “comprehensive” settlement with thousands of communities and two dozen states. The company is seeking bankruptcy protection to get the process underway, but a coalition of states have pledged to fight the proposed deal.
Purdue reached a deal with 24 state attorneys general, plaintiffs in the national multidistrict litigation in Cleveland, and other officials that offers up at least $10 billion to help fight the opioid crisis that the drugmaker itself allegedly helped create. As part of the deal, the company has filed for bankruptcy and intends to restructure as a public benefit trust to provide the free drugs and financial contributions that make up the lion's share of the settlement.
Purdue Chairman Steve Miller said in a statement the “unique framework for a comprehensive resolution will dedicate all of the assets and resources of Purdue for the benefit of the American public.”
The deal “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," Miller said. The proposal won’t be final until authorized by the courts.
Many states aren’t convinced. Connecticut Attorney General William Tong tweeted that most states “reject this settlement.” Together, the state holdouts will “be a unified and effective voice arguing in bankruptcy court that this deal is unacceptable and insufficient,” he added.
The announcement follows weeks of press reports about settlement negotiations. Under the arrangement, the family that founded and owns Purdue, the Sacklers, will contribute at least $3 billion. Purdue will provide overdose reversal medicines plus proceeds from ongoing sales.
Some states believe the proposal is the best way to resolve the crisis—and that they might receive less if Purdue started bankruptcy proceedings without a settlement. Others believe the deal falls far short of what’s reasonable to address the national opioid epidemic.
The scope and scale of the pain, death and destruction that Purdue and the Sacklers have caused far exceeds anything that has been offered thus far. CT's focus is on the victims and their families, and holding Purdue and the Sacklers accountable for the crisis they have caused.— AG William Tong (@AGWilliamTong) September 11, 2019
Meanwhile, as Purdue moves ahead with its deal, New York attorney general Letitia James’ office has tracked $1 billion in Sackler family wire transfers, the New York Times reports. New York is among the states seeking to block the proposed settlement and alleges the family made “fraudulent” transfers to protect its wealth.
The Sackler family said in a statement they're "hopeful that in time, those parties who are not yet supportive will ultimately shift their focus to the critical resources that the settlement provides to people and problems that need them."
"We intend to work constructively with all parties as we try to implement this settlement," the family added.
Purdue is seeking bankruptcy after thousands of cities and counties sued the company and others alleging their opioid marketing played a role in a national crisis. A bellwether trial next month will test the claims of Ohio’s Summit and Cuyahoga counties against the defendants; several drugmakers have already inked settlements intended to sidestep that trial.
Outside of the multidistrict litigation, Oklahoma sued Purdue, Teva and Johnson & Johnson alleging their opioid marketing created a public nuisance. Before the trial, Purdue and Teva settled for $270 million and $85 million, respectively. A judge ordered J&J to pay $572 million after the trial.