Landmark $270 Million Opioid Lawsuit Settlement Opens Door for Dozens of Pending Cases
Purdue Pharma recently agreed to pay Oklahoma $270 million rather than face trial on charges of misleading marketing practices and misrepresentation regarding Oxycontin, according to company and state press releases. Court battles are far from over for the pharmaceutical company, which still faces 35 state lawsuits and a federal lawsuit in Cleveland involving more than 1,000 entities alleging the company withheld information about the addictive potential of Oxycontin from the public, according to experts.
Members of the Sackler family, who own the company but were not defendants in the case, will pay another US$75 million in personal funds over five years.
The family’s philanthropic efforts have recently been rebuffed by non-profit institutions – underscoring the growing unease with the main source of the philanthropic dynasty’s riches: revenue from sales of OxyContin.
Details about the talks come a day after an Oklahoma judge found health-care giant Johnson & Johnson responsible for fueling the state’s opioid epidemic in another opioid lawsuit settlement and ordered it to pay $572 million to help abate the crisis.
At issue was the way Purdue pressured doctors to prescribe opioids for all sorts of maladies.
Purdue is widely blamed for sparking the prescription opioid crisis in the United States with the introduction of OxyContin in 1996, followed by an aggressive marketing effort that persuaded doctors to prescribe it more widely and at higher doses.
In 2007, the company and three executives pleaded guilty to federal charges of misleading doctors and the public about the drugs. Purdue paid a $635 million fine.
Asked for comment Tuesday, Purdue said in a statement: “While Purdue Pharma is prepared to defend itself vigorously in the opioid litigation, the company has made clear that it sees little good coming from years of wasteful litigation and appeals.
The company has made clear for months that it was considering bankruptcy in light of the liabilities it faced from hundreds of lawsuits. Another signal came in an Aug. 19 letter to former sales representatives, warning that “there exists the possibility that Purdue may not, or may not be able to, contribute enough to fully fund all of the retirement benefits that will become payable in the future under the Plan.”
The federal case is set to begin with two Ohio counties proceeding to trial as test cases. Polster has encouraged the plaintiffs to settle with some two dozen drug companies named in the lawsuits, and negotiations have occurred even as both sides readied for trial. State attorneys general were present, along with lawyers for the federal plaintiffs, at last week’s meeting, according to people familiar with it.
They said the company’s $7 billion in payments toward the settlement would come from a combination of sources, including insurance policies, cash, assets and Purdue’s remaining product inventory.
The company would declare Chapter 11 bankruptcy and restructure as a for-profit “public benefit trust,” with the Sacklers, who have owned Purdue since 1952, no longer in control, two people said. That trust would contribute to the settlement over a number of years by selling drugs such as OxyContin and non-opioids. A bankruptcy judge would choose the trustees.
The company also would provide anti-addiction medications such as buprenorphine, naloxone and nalmefene, a medication that has not been approved but has been fast-tracked by the FDA.
The Sacklers also would contribute $3 billion in personal funds to the settlement. That could grow by $1.5 billion if the family sells Mundipharma, an international drug company that it also owns. The Sackler family paid itself nearly $4.3 billion from the sale of its drugs between 2008 and 2016, a Massachusetts lawsuit against the company claims.
This is the second big opioid lawsuit settlement in the last couple of years.
WHAT DOES THIS TEACH US?
Humans are, well, human. Some doctors have no problems taking kickbacks, bonuses, cash or gifts from disreputable pharmaecutical sales reps and the companies that employee them. Patients who are eager for pain relief trust these doctors. Until all parties are held responsibile and accountable, this practice won’t stop. Consequences to violating the trust of the patient need to be ruinous to both the corrupt big pharam companies and the complicit physicians.
Opioid addiction is especially crushing – it destroys lives, families and dreams – and the problem has been growing since 1996 at an epidemic level. In many cases, even family members are blind-sided to learn that someone they love has become addicted, despite the signs of addiction.
It also teaches us that patients must be partially accountable as well. The pain management process should start with the least dangerous remedy, including presciptions. Why ask for OxyContin when IbuProfen might do the trick?
We’ve probably not seen the last opioid lawsuit settlement, as other cases are about to be adjudicated but the message is clear’ big pharma companies that are profit hungry are going to be held accountable.