The agreement reached by Purdue Pharma, the maker of OxyContin, to settle thousands of lawsuits over the harm caused by opioids has sparked both hope and dissatisfaction among the victims of the crisis. While the settlement includes a commitment by Purdue Pharma to contribute up to $6 billion to combat the overdose epidemic and relinquish ownership of the company, it also grants the wealthy Sackler family, who own Purdue Pharma, exemption from civil lawsuits. This means that the Sackler family could potentially retain billions of dollars in profits from OxyContin sales. The Supreme Court is set to hear arguments on December 4th regarding whether this agreement violates federal law. The central issue for the justices is whether the legal shield provided by bankruptcy can extend to individuals like the Sacklers who have not declared bankruptcy themselves. Lower courts have issued conflicting rulings on this matter, making it a topic of significant importance, not only for this case but also for other major product liability lawsuits settled through the bankruptcy system.
The settlement, despite allocating billions of dollars for opioid abatement and treatment programs, has created a moral dilemma for those who have lost loved ones or years of their own lives to opioids. Ellen Isaacs, who lost her 33-year-old son to an overdose in 2018, initially supported the settlement in the hopes of receiving compensation. However, she has since changed her mind, realizing that money cannot bring closure and that approving the deal could set a precedent for future cases. She expressed concerns that others might be able to exploit similar legal protections in the future. Lynn Wencus, who also lost her 33-year-old son to an overdose, initially opposed the agreement but has since come around to supporting it. She hopes that finalizing the settlement will help her move on from the pain caused by Purdue Pharma and the Sackler family, whom she holds responsible for the opioid crisis.
Purdue Pharma's aggressive marketing of OxyContin, which hit the market in 1996, has been widely cited as a catalyst for the nationwide opioid epidemic. The company pleaded guilty to misbranding the drug in 2007 and paid significant fines and penalties. Despite the fact that the majority of opioid prescriptions were for generic drugs, OxyContin and Purdue Pharma became synonymous with the crisis. Opioid-related overdose deaths have continued to rise, reaching 80,000 in recent years as people with substance abuse disorders turned to heroin and fentanyl due to the difficulty in obtaining prescription pills. As a result, pharmaceutical companies, wholesalers, and pharmacies have agreed to pay over $50 billion to settle lawsuits brought by state, local, and Native American tribal governments, as well as others, alleging that their marketing and sales practices contributed to the epidemic. The settlement proposed by Purdue Pharma would be one of the largest and is one of only two that include provisions for direct compensation to victims of the crisis. Payouts from a $750 million fund are expected to range from approximately $3,500 to $48,000.
The Sackler family's role in the opioid crisis has been widely publicized, and their name has been removed from galleries and buildings in museums and universities around the world. While family members have not received payouts from Purdue Pharma since before the company filed for bankruptcy, they had been paid over $10 billion in the previous decade, with approximately half of that amount going towards taxes. Some family members testified during a bankruptcy hearing, stating that they would not contribute to the proposed settlement without being shielded from lawsuits. The Sackler family has largely remained out of the public eye, although two members appeared via video and one listened via audio during a court hearing where individuals impacted by opioids shared their stories. One speaker directly addressed the family, accusing them of poisoning lives and blaming victims for dying.
The settlement reached between Purdue Pharma and the governments suing the company has faced opposition from the U.S. Bankruptcy Trustee, an arm of the Justice Department, and Attorney General Merrick Garland. The Justice Department's objection marks a change in stance, as it initially supported the settlement during the Trump administration. The settlement included an $8.3 billion penalty, of which the company would only pay $225 million if it executed the settlement plan. A federal trial court judge ruled against allowing the settlement, but a federal appeals panel later ruled in favor of it, although one judge expressed significant concerns. The Supreme Court agreed to take up the case at the urging of the Biden administration.
While the inclusion of third-party releases in bankruptcy cases is not unprecedented, as it was explicitly allowed for asbestos cases in 1994, it has garnered attention and debate in the context of the Purdue Pharma settlement. Proponents argue that third-party releases are necessary to reach a settlement that all parties can agree to and maintain the integrity of the bankruptcy system. However, critics argue that such releases provide special protection for billionaires like the Sacklers. The resolution of this case and the Supreme Court's ruling will not only impact the Purdue Pharma settlement but also potentially set a precedent for future product liability cases settled through bankruptcy.
In conclusion, the upcoming Supreme Court arguments on Purdue Pharma's bankruptcy case have highlighted the complex legal and moral issues surrounding the settlement. While the agreement holds the potential to provide funding for opioid abatement programs and compensate victims, it has also sparked concerns about the special legal protections granted to the Sackler family and the implications for future cases. The ruling by the Supreme Court will have far-reaching consequences, not only for this case but also for the broader landscape of product liability lawsuits settled through the bankruptcy system.
