A bottle of the pain reliever OxyContin, a brand of Purdue Pharma, at a pharmacy in Provo, Utah in 2019.GEORGE FREY (Portal)
The U.S. Supreme Court this Thursday stayed the agreement with the Sackler family, owners of Purdue Pharma, the maker of the analgesic that largely blames the opioid epidemic the country is suffering, pending a federal government ruling required verification is available. A federal appeals court had cleared Purdue’s bankruptcy settlement, which would protect members of the wealthy Sackler family from lawsuits brought by thousands of opioid addiction victims in exchange for $6 billion in compensation. The deal’s temporary freeze is the latest chapter in a long legal battle amid the worst public health crisis in the US, between AIDS in the 1980s and the pandemic in 2020.
Purdue Pharma manufactured, marketed and made its flagship product, the pain reliever OxyContin, the first choice of tens of thousands of physicians for the treatment of chronic, non-cancer pain. But before long, tens of thousands of Americans were becoming addicted to the drug, an addiction that has caused more than 500,000 deaths in two decades. For many other addicts, taking OxyContin was access to fentanyl, a synthetic drug 50 times more potent than morphine.
Faced with thousands of complaints from companies and individuals, the drug company filed for bankruptcy in 2019 in an attempt to evade justice. However, the Supreme Court has stayed the bankruptcy proceedings of Purdue Pharma and its subsidiaries pending a decision on the Biden administration’s appeal in December of a lower court ruling confirming the agreement.
The court is thus siding with the Ministry of Justice. The government has argued that the Sackler family cannot benefit from the legal protections afforded to debtors in “financial distress” as provided for under bankruptcy law. The court’s order, which does not explain the reasons for the lockdown, not only offers the Sacklers protection, albeit temporary, but also adds unknowns to the compensation plan for states, local governments, tribes and individuals killed by the opioid crisis were harmed. ,
The order provides that judges will hear arguments in the case in December. The lawsuit has been going on for years and revolves around the responsibility of the manufacturer of OxyContin, but above all over the compensation of the victims of this addiction and overdose crisis with a prescription drug.
During the long court case, the system’s accountability was proven, from the pressure exerted by Purdue pharmaceutical lobbyists in Congress to the ease with which some officials who were targeted by their campaigns easily walked through the government revolving door and ended up in working in the pharmaceutical industry. Due to the company’s aggressive marketing policy, the incentive system for salespeople or medical field workers also played a fundamental role, including payments to doctors to prioritize prescribing the product. Another key factor that explains the magnitude of the crisis is the fraudulent policy of distributing and marketing OxyContin, which supports the pharmaceutical company and the family up to the last minute so that it does not cause addiction.
Purdue filed for Chapter 11 bankruptcy in 2019 to settle its debts from thousands of lawsuits. The bankruptcy agreement was approved in 2021, with a projection to pay $10,000 million in principle to its creditors, including but not limited to states and local governments, addiction treatment and recovery centers, hospitals, survivors and loved ones of the deceased. But the Biden administration and eight states objected to the deal. The latter agreed to withdraw after the Sacklers promised to put more money into the settlement fund.
In May, the 2nd Circuit upheld the agreement, noting that federal bankruptcy law allows for legal protections for non-bankrupt parties — like the Sacklers — in exceptional circumstances. That court ruled that legal claims against Purdue were inseparable from claims against its owners and that allowing lawsuits against the Sacklers would undermine Purdue’s efforts to reach a final settlement.
Members of the Sackler family, who have consistently denied committing any wrongdoing or knowing the danger of their flagship drug despite scientific evidence, lamented that OxyContin “unexpectedly became part of an opioid crisis.” In May, the family reiterated their belief that the bankruptcy settlement would provide “significant resources for individuals and communities in need.” That was until the Democratic government, through the Office of the Trustee – the Justice Department’s body responsible for overseeing bankruptcies – objected as it was a complaint for debtors who were “in financial trouble”. That can’t be said of the Sackler family, who, according to the government, withdrew $11 billion from Purdue Pharma before agreeing to pay $6 billion into the recovery fund.
A group representing more than 60,000 plaintiffs supports resolving the settlement on current terms, including legal immunity for the family, and believes billions of dollars in settlement funds depend on confirmation and ratification of the plan, now in limbo.
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