Sacklers and Purdue Pharma Reach New Deal With States Over Opioids


After hundreds of hours of negotiations mediated by Judge Shelley Chapman of federal bankruptcy court, the Sacklers also agreed to a series of other new terms. In addition to the Sackler statement, which Mr. Tong characterized as an “apology,” Judge Chapman is recommending a hearing that would allow people who suffered from addiction to OxyContin to describe what they had endured, and that family members from each of two Sackler branches attend. And another condition under the deal: If any medical centers and art or educational institutions bearing the Sackler name want it removed, the family cannot contest the request.

Under the plan, Purdue would be renamed Knoa Pharma and overseen by a public board. The restructured, public benefit company would contribute funds for the plaintiffs’ programs, plus more as Knoa evolved into a manufacturer of medications for addiction reversal and treatment, among other drugs, including OxyContin.

The new settlement, however, still faces a hurdle before it can go forward. The U.S. Trustee program, which serves as a watchdog over the bankruptcy system within the Department of Justice, has long argued strenuously against the proposed immunity shield for the Sacklers. Before the tentative deal on Thursday, a battle had been building in the U.S. Court of Appeals for the Second Circuit, which had said it would take up the matter on an expedited basis.

The Justice Department declined to comment on whether it would continue to challenge that condition of the tentative settlement.

As marathon sessions of negotiations dragged on, the opioid crisis continued to deepen, with overdoses soaring during the pandemic. The dilemma for the holdout governments was whether to keep pursuing the Sacklers in court, a process that could take years with no guarantee of victory, or just take the money, now that the cash offer had increased.

While all the states and, in turn, their local governments, would get a bigger payout than the original deal outlined, the holdout states would get even more, as a bonus for their resistance. The $750 million set aside to compensate more than 100,000 individual victims and survivors, whose stories help build the governmental lawsuits, would not grow, but states have committed to funding an “opioid survivors trust” specifically for them.

Ryan Hampton, who monitored years of proceedings on behalf of those affected by the opioid epidemic, said: “At least the $750 million is being protected which is better than no money at all. This bankruptcy needs to end. And the Justice Department needs to flex their muscle and investigate the Sacklers criminally, which is permissible under the bankruptcy plan.”



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