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New York, other states reach $4.5 billion agreement with OxyContin maker

Purdue Pharma headquarters in Stamford, Conn., on Oct.

Purdue Pharma headquarters in Stamford, Conn., on Oct. 21, 2020. Credit: AP / Mark Lennihan

ALBANY — Fifteen states, including New York, have reached a $4.5 billion agreement with OxyContin maker Purdue Pharma that could settle thousands of lawsuits linked to the opioid epidemic.

The agreement calls for Purdue to pay one of the largest amounts ever collected in a law enforcement action, according to New York Attorney General Letitia James. New York would receive about $200 million of the settlement.

The Sackler family, Purdue’s owners, will relinquish control of several foundations to an opioid abatement trust fund that will use the estimated $175 million in foundation assets to combat addiction.

The company also agreed to release more than 30 million documents it has shielded for decades.

In return, the states agreed to drop their opposition to Purdue’s bankruptcy plan. The agreement was filed Wednesday in U.S. Bankruptcy Court in White Plains.

James, who joined other state attorneys general in a news conference Thursday, said the settlement didn't provide as much as the litigants had sought.

Still, it provided far more in concessions than the Sacklers originally had proposed.

Purdue's bankruptcy case is the highest-profile element of complicated nationwide litigation against drugmakers, distribution companies and pharmacies related to the opioid epidemic.

The Sacklers in 2019 proposed paying $3 billion in cash but refused to release documents and electronic communications.

In the agreement, they will pay $4.3 billion in cash and agree to turn over foundation assets.

Asked why the states agreed to settle after fighting Purdue for years, James acknowledged it wasn’t a "perfect solution."

But after fighting "delay after delay," the agreement secured "unprecedented" public disclosure of the company’s internal documents and ended the Sackler family’s ability to sell opioids ever again, James said.

"This deal puts one of the nation’s most harmful drug dealers out of the opioid business," James said.

Later, she said: "No one is happy with the settlement. Can the Sacklers do more? Hell yeah, they can do a lot better, but it should first begin with an apology."

"The perpetrators who created this crisis now are villains for the history books," said Massachusetts Attorney General Maura Healey, the first attorney general to sue the Sackler family.

In a statement, Sackler family members said: "This resolution to the mediation is an important step toward providing substantial resources for people and communities in need … The Sackler family hopes these funds will help achieve that goal."

Nine other states that sued Purdue have not signed onto the agreement. Several expressed opposition either because their state wasn't getting enough money or the Sacklers didn't pay enough.

In a statement, Purdue, said it would try to build "even greater consensus" for getting others to support its bankruptcy reorganization plan.

Purdue sought bankruptcy protection in 2019 as a way to settle about 3,000 lawsuits it faced from state and local governments and other entities.

They said the company's continued marketing of its powerful prescription painkiller contributed to a crisis that has been linked to nearly 500,000 deaths in the U.S. over the past two decades.

Money from the deal is to go to government entities, which have agreed to use it to address the opioid crisis, along with individual victims and their families.

Most groups representing creditors, including victims and local governments, had backed the plan grudgingly.

But state attorneys general until now were deeply divided, with about half of them supporting the plan and half fighting it.

The attorneys general who had opposed the plan said they didn't like having to rely on profits from the continued sale of prescription painkillers to combat the opioid epidemic.

The revised deal lets state and local governments opt out of receiving such funds.

Attorneys general also said the deal didn't do enough to hold Sackler family members accountable or to make public documents that could help explain the company's role in the crisis.

James and Healey said they had asked the Sacklers to also issue a public apology, but the family refused.

"They should pay more. They should apologize," Minnesota Attorney General Keith Ellison said. "But in a case of mediation, you get the best you can."

Last year, Purdue pleaded guilty to federal criminal charges and agreed to pay $225 million in a federal civil settlement.

With The Associated Press

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