Drugmakers and distributors pledged tens of billions of dollars to settle lawsuits accusing them of helping fuel the country’s opioid crisis. But much of the money may never be paid, WSJ Pro Bankruptcy reported. Opioid victims are finding that billions of settlement dollars have been snared in the nation’s bankruptcy system, where they face financial engineering by sophisticated investors and management teams, roadblocks from the federal government, and extensive legal wrangling and costs. The Supreme Court last week heard the Justice Department’s argument for why OxyContin maker Purdue Pharma’s roughly $8 billion settlement should be scrapped even though it has the support of nearly all opioid victims who voted on the matter. Pharmaceutical manufacturers Mallinckrodt and Endo International both completed transactions that gave priority to the interests of their financial creditors over those of opioid victims, and rewarded the companies’ top executives with bonuses or accelerated compensation before filing for chapter 11. The drug industry has committed to provide more than $50 billion to address the opioid crisis, with most of the funds coming from major pharmaceutical manufacturers like Johnson & Johnson and retailers such as CVS and Walgreens. About $10 billion would have come from Purdue Pharma, Mallinckrodt and Endo, which all filed for bankruptcy to pause mass lawsuits as they negotiated settlement agreements with state and local governments, individual victims and their family members. Those companies said chapter 11 would be the best forum to equitably distribute funds to the opioid claimants and government bodies. But the settlement deals they agreed to have been either delayed or eliminated in long and expensive court proceedings. Victims are left wondering whether payments will ever arrive, while people continue to die of overdoses and governments struggle to address the continuing epidemic.
