Last Friday, October 11, White Plains Bankruptcy Judge Robert D. Drain paused legal action between 25 states suing Purdue Pharmacy. The New York Times reported that Judge Drain made this decision to prevent mounting litigation costs that would take away from the settlement to opioid survivors and other parties in the Chapter 11 bankruptcy settlement.
Purdue Pharmacy was the main producer and manufacturer of OxyContin, a pain relief drug that sparked the opioid crisis as the company did not accurately represent the drug with its addictive qualities and side effects. Purdue filed for Chapter 11 bankruptcy to escape the costs of lawsuits in order to pay off the $3 billion owed to the plaintiffs. Purdue will also sell its British pharmaceutical company Mundipharma. The Sackler family, some 20 members who share in the company’s profits, will be removed from the company and prohibited from starting another business in pharmaceuticals. This is the most severe reaction taken against the Sacklers seeing as they settled other lawsuits in 2007 and 2015 to opioid crisis victims affected by OxyContin.
The states who’s lawsuits were paused in the decision were offered to come up with a disclosure plan by November 6th to present to the court. Judge Drain did not cease all the lawsuits, as is customary in bankruptcy court, and it is unclear when/ if they can proceed further. The New York Times reported on Judge Drain’s decision: “It would assure that the Sacklers reveal how much money they have earned from the sales of the opioid painkiller OxyContin, and that an angry public would eventually learn the complete story of the company’s role in the opioid epidemic.”
The lawyers representing the states in the lawsuit pushed that they needed to be more thorough in understanding Purdue’s finances, the role of health care regulation, and hold all appropriate parties accountable. Judge Drain rebutted that all of that would be accomplished in the boundaries of the bankruptcy court and dismissed their concerns. He pressed that in other such monumental lawsuits, an example provided being lawsuits on tobacco companies, the state legislatures diverted the money towards their own budget rather than the victims.
The Sacklers themselves have been left out of the lawsuits so far, but that may change as states plan to pursue further legal action against the family personally rather than their company. The Sackler’s attempt to dismiss a case against them was not granted by a Massachusetts judge, thus leaving the family open for further lawsuits to pay more, as the states believe they owe.
Source: https://www.nytimes.com/2019/10/11/health/purdue-bankruptcy-opioids.html
Photo: Ricky Flores/The Journal News