A federal judge has overturned the bankruptcy plan of Oxycontin maker Purdue Pharma over a provision that would shield owners of the pharmaceutical company from separate litigation.
New York U.S. District Judge Colleen McMahon said that the provision to grant the Sackler family members immunity from thousands of lawsuits over the opioid crisis is “inconsistent” with the U.S. Bankruptcy Code, disagreeing with the court that had approved the $4.5 billion bankruptcy agreement previously, The Washington Post reported. (RELATED: Metropolitan Museum Of Art To Remove Sackler Name From Seven Exhibits)
“This is a seismic victory for justice and accountability that will re-open the deeply flawed Purdue bankruptcy and force the Sackler family to confront the pain and devastation they have caused,” Attorney General William Tong of Connecticut stated in a press release after the ruling.
For the first time, 100,000 Americans died of drug overdoses in one year, U.S. health officials say. One reason cited is the growing prevalence of deadly fentanyl in the illicit drug supply. https://t.co/njN3U04n35
— The Associated Press (@AP) November 17, 2021
Purdue sought bankruptcy protection in 2019 after facing thousands of lawsuits for claims that the company pushed doctors to prescribe OxyContin, which helped spark an opioid crisis in the U.S., NPR reported.
In the bankruptcy deal, members of the Sackler family would give up ownership of the company. The company would still sell opioids — but the profits would be used to fight the crisis.
David Sackler vowed in August that the family would walk away from the bankruptcy deal if the family was not granted immunity from current and future civil claims associated with the company.
David Sackler said on Tuesday that he and his family, the owners of Purdue Pharma, would withdraw a $4.5 billion pledge unless they are granted broad legal immunity. The money would go to communities that have been devastated by the opioid epidemic. https://t.co/HjoQ4wlKYb
— The New York Times (@nytimes) August 18, 2021
“The bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family,” Attorney General Merrick Garland stated after expressing his approval of McMahon’s decision.
Purdue announced it would appeal the decision, according to The Washington Post. Steven Miller, chairman of Purdue’s board, said in a statement that the ruling would “delay and perhaps end the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis.”
Before 1996, doctors had resisted prescribing opioids except to the terminally ill, because of their addictiveness. This changed when Purdue began an aggressive marketing campaign, distributing educational material that downplayed the risks of opioids and encouraged doctors to prescribe them regularly as painkillers.
Purdue plead guilty to felony charges in 2007 for false marketing of OxyContin and paid $635 million as a result. Three executives also pleaded guilty to criminal charges but dodged prison time.
In 2010, Purdue reformulated Oxycontin to be “abuse-deterrent” in an effort to cut down on people crushing the pills to snort or inject. This, however, indirectly fueled greater heroin use in the U.S. as addicts could no longer get their high from the pills, leading many to substitute heroin for their fix.
Though the opioid crisis has been raging for more than twenty years, a record number of Americans died of overdoses between April 2020 to April 2021. More than 100,000 died in that time period as compared with 78,000 the previous year.
The Sackler family has given millions to museums and foundations for the past fifty years. “It’s blood money,” Andrew Kolodny, Brandeis University’s co-director of Opioid Policy Research, told the Daily Caller in 2017.
“I would hope the institutions that are taking Sackler money would begin to think about it and treat it in the same way they would a donation from [Colombian drug lord] Pablo Escobar.”
