$4.5 Billion Purdue Pharmaceutical Bankruptcy Settlement Overturned

Federal Judge Reverses Purdue Pharma Settlement

On Thursday, a federal judge overturned a nearly $4.5 billion bankruptcy settlement that granted immunity to the Sackler family from civil lawsuits linked to their company Purdue Pharmaceuticals, the manufacturer of OxyContin. According to NPR, the settlement also included hundreds of individuals, companies, and other organizations vying for a “clean legal slate.” The judge, Colleen McMahon of the US District Court for the Southern District of New York, stated in a written opinion on Thursday that the New York bankruptcy court that approved the settlement back in September did not have the authority to shield the Sackler family from future Opioid-related lawsuits.

The settlement was first approved by Judge Robert Drain of the US Bankruptcy Court in White Plains, New York. It settled that the owners of Purdue Pharma, members of the Sackler family, would renounce their ownership of the company and must pay back billions of their fortune to address the deadly Opioid epidemic. In addition, the Purdue company would be dissolved and re-emerge as Knoa Pharma which would still produce OxyContin and other drugs. By doing so, however, the family and related parties would be absolved from any liability related to the Purdue company.

What Are Opioids?

Opioids are a class of drugs that are derived from or mimic Opium, which is a chemical that occurs naturally in poppy seeds and plants. Opioids activate receptors in the brain and depress the central nervous system. When these receptors are activated, they release “feel-good” chemicals known as endorphins. Due to their intensely calming effects, Opioids have tremendously high rates of abuse which, in many cases, leads to dependence or addiction. This class of drugs includes the illicit drug Heroin, synthetic Opioids such as Fentanyl, and pain relievers available legally through physicians, such as Oxycodone or OxyContin, Codeine, Morphine, and many others.

Prescription Opioids, when used appropriately under a health care provider’s direction, can provide effective pain relief for mild to chronic health conditions. However, just because an Opioid is prescribed by a doctor, that doesn’t mean that the rate of addiction is any lower. Between the high rates of prescription and the addictive qualities of the drug, Opioids have gripped the nation in a deadly health crisis.

Purdue Pharma’s Involvement With The Opioid Crisis

The Sackler family has long been accused of fueling the nation’s Opioid crisis, tracing back to the 90s. Purdue Pharma’s aggressive and misleading advertisements of OxyContin neglected to disclose its highly addictive nature. The company and family members have denied these allegations.

Misleading OxyContin advertisements earned the company a warning from the FDA in 2003. However, Purdue Pharma still led healthcare providers to believe that the Opioid was a non-habit-forming solution to help patients manage their pain safely.

Trusting the pharmaceutical company at its word, healthcare providers began prescribing OxyContin at higher rates leading to widespread misuse of both prescription and non-prescription Opioids. By 2006, there were 215,917,663 Opioid prescriptions in the US. This number translates to a prescribing rate of 72.4 prescriptions per 100 people. By 2020, this rate has dropped to 43.3.

In September 2019, the Purdue company filed for bankruptcy in the face of nearly 3,000 lawsuits accusing the company of contributing to the public health crisis that has claimed more than half a million American lives since 1999. In 2019, of the nearly 71,000 drug overdose deaths, 70.6% involved Opioids.

While the company formerly denied its involvement in the Opioid epidemic, in November 2020, Purdue Pharma pleaded guilty to 3 criminal charges, formally taking responsibility for its misconduct. This ruling angered many critics as they believed it still protected individuals, like the members of the Sackler family, from the consequences of their involvement.

What To Expect Now

Hours after the bankruptcy settlement was decided, the Purdue company stated that it would appeal the decision, and the case may reach the US Supreme Court. According to Purdue Chairman Steve Miller, this decision to overturn the bankruptcy settlement will delay, or even end, the ability of communities to receive compensation to abate the Opioid crisis. While the Purdue Pharma bankruptcy plan may be on hold as legalities persist, the Opioid epidemic continues regardless of settlements and negotiations.