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A federal bankruptcy court judge on Friday said he would approve OxyContin-maker Purdue Pharma’s latest deal to settle thousands of lawsuits over the toll of opioids that includes some money for thousands of victims of the epidemic.
The deal overseen by US bankruptcy judge Sean Lane would require some of the multibillionaire members of the semi-reclusive Sackler family who own the company to contribute up to $7bn and give up ownership of the Connecticut-based firm.
The new agreement replaces one the US supreme court rejected last year, finding it would have improperly protected members of the family against future lawsuits. The judge said he would explain his decision in a hearing on Tuesday.
The deal is among the largest in a series of opioid settlements brought by state and local governments against drugmakers, wholesalers and pharmacies that totaled about $50bn.
It could close a long chapter – and maybe the entire book – on a legal odyssey over efforts to hold the company to account for its role in an opioid crisis connected to 900,000 deaths in the US since 1999, including deaths from heroin and illicit fentanyl, to which people who had become dependent on the powerful prescription painkiller OxyContin turned when their pill supply was restricted or cut off.
Lawyers and judges involved have described it as one of the most complicated bankruptcies in US history. Ultimately, attorneys representing Purdue, cities, states, counties, Native American tribes, people with addiction and others were nearly unanimous in urging the judge to approve the bankruptcy plan for Purdue that was tentatively agreed to this January.
Purdue filed for protection six years ago as it faced lawsuits with claims that grew to trillions of dollars.
Mike Quinn, a lawyer working with the plaintiffs, said on Friday: “This case never should have been in bankruptcy it should have been in criminal court.”
The judge has pledged to release details of the deal on Tuesday. There is expected to be more scope in this deal than in the one rejected by the supreme court for people to sue members of the Sackler family personally over their role in Purdue and the crisis.
“I think people will try to sue,” Quinn said. He was closely involved in opposing the Purdue-Sackler bankruptcy deal, working with Pain, an activist group fronted by the American art photographer and activist Nan Goldin, who led direct action protests at international art museums that had accepted donations and sponsorship in the form of Sackler billions.
Some of the Sackler family owning the privately held Purdue, which now-deceased members of the family grew into a specialist in pain treatment in the early 1990s, became famous philanthropists using the huge profits that their star drug OxyContin generated.
But their reputation took a dive when investigative journalism and activism exposed the company’s expansionist drive to increase prescriptions of the opioid despite growing addiction and deaths across the US.
Mike Moore, the former Mississippi attorney general, who helped secure the US’s big tobacco settlement and the $20bn settlement against BP for the 2010 Deepwater Horizon oil spill, has been a key figure for plaintiffs in the sprawling opioids litigation against Purdue in the US. He said about Friday’s news: “I’m happy that they have finally come to a conclusion after years and years of wrangling. We should have gotten this done a long time ago, but it is what it is, it’s not what we wanted when we started this.”
Moore began legal action against Purdue 20 years ago. In a telephone interview with the Guardian on Friday, he criticized the Sackler family for spending so much time and money fighting the litigation and then Purdue taking the bankruptcy route. Others in the industry came to settlements more quickly.
“When I first sat down with the Sacklers and the lawyers for Purdue we thought we could get a resolution … and the money would have been paid out five years ago, but they decided to go into bankruptcy … Purdue were the worst of the worst of all the culprits,” Moore said.
“I’m glad it’s over,” he added.
Lane, during a hearing in White Plains, New York, on Friday indicated he plans to sign off on Purdue’s chapter 11 plan.
“The plan is the product of intense work with our creditors through a singular, shared focus on delivering as much value as possible to meaningfully address the opioid crisis,” Steve Miller, Purdue’s board chairman, said in a statement.
Purdue filed for bankruptcy in 2019 while facing more than 2,600 lawsuits by states, local governments and others accusing it of contributing to the deadly opioid abuse epidemic through its marketing and sale of OxyContin and other pain medications.
Purdue’s creditors include state and local governments, individuals who became addicted to OxyContin, hospitals and others who were harmed by the opioid crisis.
Members of the Sackler family have expressed regret for their company’s role in the opioid addiction epidemic, but deny wrongdoing.
Purdue will be converted into a non-profit called Knoa Pharma, focusing on developing and distributing opioid overdose reversal and addiction treatment medications.
The Associated Press and Reuters contributed reporting
