Seven months after the Supreme Court struck down a deal that would have resolved thousands of opioid cases against Purdue Pharma, the company’s owners, members of the Sackler family, have increased their cash offer to settle the lawsuit — but with a new advantage.
Under the framework of the new deal, the Sacklers would not receive immunity from future opioid-related lawsuits, a condition they had long insisted on but which the court ruled was impermissible.
Instead, they will pay up to $6.5 billion — $500 million more than the previous agreement — but with a new condition: Claimants, including states, municipalities and individuals, must save up to $800 million in a legal account. – A defense fund for billionaires to fight such cases, according to people familiar with the negotiations.
Some details of the framework — but not the legal defense fund — were announced Thursday by New York Attorney General Letitia James. It said the total settlement amounted to $7.4 billion, including $897 million from Purdue.
She said New York could receive up to $250 million.
“The Sacklers relentlessly pursued profit at the expense of vulnerable patients and played a critical role in starting and fueling the opioid epidemic,” Ms. James said.
Echoing other settlements in opioid lawsuits nationwide, these payments are intended to fund efforts to prevent and treat addiction in hard-hit communities across the country.
“We are very pleased to have reached a new agreement that will provide billions of dollars to compensate victims, alleviate the opioid crisis, and provide treatment and overdose relief that will save lives,” Purdue said in a statement, noting that the reorganization plan was still underway.
The Sacklers did not respond to requests for comment.
It is unclear how many claimants will agree to the new terms. Ms. James noted that 14 other states were participating in the talks: Florida, Connecticut, Massachusetts, Tennessee, California, Colorado, Illinois, Delaware, Pennsylvania, Oregon, Texas, Vermont, Virginia, and West Virginia.
But the deal must now be sold to all of its claimants – not just the remaining states and thousands of local governments, but also hundreds of Native American tribes and some 140,000 personal injury victims.
Although many of those who accept the deal find the Sackler family reserve fund a hard pill to swallow, the reality is that despite many years of… In the Purdue lawsuit, no dollars have yet been sent to the claimants, hurting the direct and ongoing damages caused by the opioid crisis. In recent months, there has been an urgent need to reach a new agreement so that the money can finally start flowing. Under the latest terms, those who object to the deal are free to build new cases against the Sacklers. Under the previous settlement, they were prohibited from doing so.
In fact, the Sacklers’ legal reserve fund could be quickly exhausted: already, lawsuits against the Sacklers have been threatened by a handful of states, counties, cities and individuals.
A spokesman for Washington state, which has successfully pursued other drug companies rather than signing national deals, said the state is considering its options.
States, which are responsible for the bulk of payments to the reserve fund, must maintain at least $200 million in the account, with contributions capped at $800 million. After five years, unused funds will begin returning to the states.
Final calculations on how much will be deducted from Purdue’s total deal to pay for attorneys, consultants and administrators are still under discussion.
The Sacklers will pay approximately $3 billion in the first three years, with remaining payments over an additional 12 years.
If the plan is approved by claimants and confirmed by a federal bankruptcy judge, Purdue will emerge by the end of this year from the bankruptcy that has protected it since 2019. It will immediately pay $897 million of its own money to the parties that signed. On the deal.
At that point, the 15-year Sackler payments will also begin. Most lawsuits that began more than a decade ago – and which eventually turned into an unprofitable joint lawsuit filed by cities, states, tribes, hospitals, and individual victims, and argued by countless teams of lawyers – are supposed to end.
In the plan that was rejected by the Supreme Court, the Sacklers, long portrayed across movies, television and news articles as the public face of predatory opioid manufacturers, asked for a $6 billion guarantee: blocking any current and future lawsuits against them related to Purdue and opioids. .
Purdue itself gets this protection as a standard benefit granted when a company emerges from bankruptcy. But because the Sacklers did not personally file for bankruptcy, the Supreme Court ruled last June that granting them permanent civil immunity fell outside the scope of the bankruptcy law.
The purpose of establishing the legal reserve fund, in which claimants will pay primarily to defend the Sacklers against other claimants, is to satisfy the court’s ruling.
“If states are expected to contribute money to the Sacklers’ legal defense, claimants and the public will want to hear more about the impact of those funds going to the Sacklers and their attorneys rather than to curb opioids,” he said. Melissa B. Jacobya bankruptcy expert at the University of North Carolina School of Law.
