The Supreme Court will examine Purdue Pharma’s $6 billion settlement of opioid lawsuits against its Sackler family owners, agreeing to hear the Justice Department’s claim that the drugmaker’s bankruptcy plan improperly wipes out potential liability to additional parties for allegedly fueling the opioid addiction crisis, WSJ Pro Bankruptcy reported. The justices, by taking up the case and preventing Purdue from carrying out the settlement during the appeal, ensured that a sizable chunk of tens of billions of dollars pledged by the pharmaceutical industry to combat the opioid crisis will be delayed — or not paid at all. But the move eventually could open the door for parties who balked at the deal to win additional compensation. The court’s review also will extend the litigation alleging that drug manufacturers, distributors and pharmacies oversupplied painkillers as opioid addiction grew into an epidemic. The legal uncertainty also will continue for the Sacklers, who sought to use Purdue’s chapter 11 proceedings to resolve opioid lawsuits aimed at holding them responsible for the costs of addiction and clawing back distributions they received from the closely held manufacturer before its bankruptcy. The case hinges on whether the nation’s bankruptcy courts have the jurisdiction to approve settlements between a bankrupt company’s creditors and third parties, such as insiders like Purdue’s owners, who wouldn’t otherwise be protected from liability. The court’s decision on the proposed deal, which Purdue needs to leave bankruptcy, is expected before July 2024. Read more.
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