A U.S. judge is expected to rule today on OxyContin maker Purdue Pharma’s request to approve its bankruptcy reorganization plan that would shield the company’s Sackler family owners from future litigation over the opioid crisis, Reuters reported. If U.S. Bankruptcy Judge Robert Drain approves the deal, which Purdue values at more than $10 billion, it would clear a path to resolve thousands of opioid lawsuits. The plan would dissolve the drugmaker and shift assets to a new company owned by a trust rather than the Sackler family members. The new company would be run to combat the opioid epidemic in U.S. communities that alleged Purdue and its owners aggressively marketed the painkiller OxyContin while playing down its abuse and overdose risks. The plan includes legal releases shielding Sackler family members from future opioid litigation, a controversial provision that some states opposed. The Sacklers have denied allegations, raised in lawsuits and elsewhere, that they bear responsibility for the U.S. opioid epidemic. They have said they acted ethically and lawfully while serving on Purdue’s board. The Purdue bankruptcy plan includes a $4.5 billion contribution from Sackler family members. The contribution is in the form of cash that would be paid over roughly a decade and also includes $175 million in value from relinquishing control of charitable institutions. Read more.
In related news, Purdue Pharma launched a behind-the-scenes effort in recent days aimed at discouraging the Justice Department from appealing a pending multibillion-dollar bankruptcy settlement for the OxyContin-maker, NPR reported. NPR acquired an early draft of a letter distributed by the drug company to groups supportive of the bankruptcy deal. The letter is framed as a direct appeal to DOJ officials and purports to be written by those injured by the company and members of the Sackler family. "We collectively speak for the overwhelming majority of the state and local governments, organizations, and individuals harmed by Purdue and the Sacklers," the letter states. There is no mention in the document of the company's role launching the effort or crafting the message. The letter warns that any Justice Department appeal would "jeopardize the delivery of billions of dollars" to communities struggling with high rates of addiction, overdose and death. The document's language suggests that Purdue Pharma hoped it would eventually be signed by state attorneys general, local government officials, hospitals and a group representing individual victims of the company's opioid products. The Justice Department hasn't said conclusively whether it will challenge the settlement in court and declined NPR's request for comment. During a two-week bankruptcy trial that concluded Friday, attorneys for two different branches of the DOJ indicated an appeal is possible. They argued the liability releases demanded by the Sacklers are unlawful and would violate the constitutional rights of those with potential claims against the family. Read more.
