USA – Purdue Pharma and Sackler family owners have reached an agreement with a group of attorneys general to pay up to US$6 billion in cash to settle widespread litigation alleging that they fueled the U.S. opioid epidemic, bringing the OxyContin maker closer to bankruptcy.

The deal was announced after weeks of mediation with the Sackler’s by the attorney generals of eight states and the District of Columbia, who had previously blocked a previous settlement that included a US$4.3 billion cash payment.

The family agreed to pay at least US$5.5 billion in cash to alleviate a crisis that has resulted in nearly 500,000 opioid overdose deaths in the United States over the last two decades.

The value of the deal could grow as the family members sell additional assets.

The agreement will almost certainly result in the removal of the Sackler name from galleries, museums, and scholarships.

The agreement not final yet

The judge who presided over the company’s bankruptcy proceedings must still approve the settlement.

The agreement, which shields the Sackler’s from civil lawsuits, must be approved by U.S. Bankruptcy Judge Robert Drain. Purdue has requested a hearing for Drain on March 9 to review the agreement.

Purdue said that the new agreement would provide additional funding for opioid-abatement programs, overdose-response medications, and victims, while also putting the company on track to resolve its bankruptcy case on an “accelerated schedule.”

With the family’s permission, a number of museums, including New York City’s Metropolitan Museum of Art, the Tate Museum and National Portrait Gallery in the United Kingdom, and the Louvre in Paris, have already removed it from exhibition halls.

Purdue Pharma will cease to exist once the bankruptcy plan is implemented. It will be renamed Knoa Pharma LLC and will be owned by the National Opioid Abatement Trust, an entity controlled by Purdue’s creditors.

The Sackler’s’ agreement comes after the three largest U.S. drug distributors and Johnson & Johnson announced that they would finalize a US$26 billion plan to settle allegations about their roles in the opioid crisis.

Purdue declared bankruptcy in 2019 in the face of thousands of lawsuits accusing it and members of the Sackler family of contributing to the opioid epidemic through deceptive marketing of its highly addictive pain medication.

Sackler’s regret but deny wrongdoing

The Sackler family owners said in a statement that they “sincerely regret” that OxyContin “unexpectedly became part of an opioid crisis.”

The family members said they acted lawfully but a settlement was by far the best way to help resolve a “serious and complex public health crisis.”

In 2007, and again in 2020, the company pleaded guilty to misbranding and fraud charges related to the marketing of OxyContin. The Sackler family has denied any wrongdoing.

The new agreement was announced more than two months after U.S. District Judge Colleen McMahon overturned the previous settlement, which provided the Sackler’s with broad legal protections against future opioid-related litigation.

At the time, eight states, Washington, D.C., and the U.S. Department of Justice’s bankruptcy watchdog said the Sackler’s should not be afforded such protections because they did not file for bankruptcy themselves.

While bankruptcy judges have increasingly granted such releases when approving a reorganization plan over the years, McMahon ruled that the bankruptcy court lacked that legal authority.

As part of the new agreement, the remaining states and the District of Columbia agreed to drop their opposition to the safeguards.

One of the attorneys general who agreed to the settlement, Connecticut’s William Tong, said he recognized its limitations.

The family is now barred from the opioid industry in the United States, and they, along with Purdue, must make public over 30 million documents, some of which were previously withheld as privileged legal advice.

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