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A plan from OxyContin’s maker to reorganize into a new entity that helps combat the nation’s opioid epidemic got a big boost this week as 15 states including Iowa suing the company now support the new business model.
The agreement from multiple state attorneys general, including those who had most aggressively opposed maker Purdue Phama’s original proposal, was disclosed late Wednesday in a filing in U.S. Bankruptcy Court in White Plains, N.Y. It followed weeks of intense mediation that resulted in changes to Purdue's original plan.
The new settlement terms call, among other things, for Purdue to make tens of millions of internal documents public, a step several attorneys general had demanded as a way to hold the company accountable.
Iowa Attorney General Tom Miller said resolving the lawsuit against Purdue and its Sackler family owners will require the Sacklers to pay more than $4.3 billion for prevention, treatment and recovery efforts across the country.
“No settlement could ever be enough to make up for the misconduct by the Sacklers and the company,” the Democratic attorney general said in a statement “This agreement is in the best interests of Iowans, however, and will go a long way toward abating the opioid crisis the defendants helped create.”
The Sacklers would pay $4.325 billion over the next nine years as part of the agreement. Exact funding distributions are yet to be determined, but Iowa expects to receive an estimated $25 million for abatement of the opioid epidemic, according to Miller’s office. Thousands of individual victims of Purdue’s misconduct also will receive compensation as part of the bankruptcy process.
In May 2019, Iowa sued Purdue Pharma and its former president and board chairman, Richard Sackler, alleging that the drug company engaged in unfair, deceptive and unlawful practices in the marketing of OxyContin. The lawsuit alleged that Purdue officials repeatedly made false and deceptive claims that OxyContin was safe and suitable for a wide range of pain patients.
Purdue filed for bankruptcy protection after Iowa and other states filed similar suits.
In an online news conference Thursday, some of the attorneys general who signed on to the deal like Iowa noted that their states are in line to get more money faster to fund drug treatment and prevention.
But they continued to express ire with the company and especially members of the wealthy Sackler family.
"No one is happy with the settlement," New York Attorney General Letitia James said. "Can the Sacklers do more? Hell yeah, they can do a lot better, but it should first begin with an apology."
In a statement, members of the Sackler family called the support of more states "an important step toward providing substantial resources for people and communities in need."
Still, nine states and the District of Columbia did not sign on. Washington Attorney General Bob Ferguson complained that "this settlement plan allows the Sacklers to walk away as billionaires with a legal shield for life."
A 10th attorney general, West Virginia's Patrick Morrisey, opposes the deal on separate grounds: That his state would get shorted when the money is allocated.
Purdue sought bankruptcy protection in 2019 as a way to settle about 3,000 lawsuits it faced from state and local governments and other entities. The suits claimed the company's continued marketing of its powerful painkiller contributed to a crisis that has been linked to nearly 500,000 deaths in the United Sates over two decades.
The court filing this week came from a mediator appointed by the bankruptcy court and shows that members of the Sackler family agreed to increase their contribution to the settlement by $50 million. They also would allow $175 million in Sackler family charities to go to abating the crisis. They are not admitting wrongdoing, and no court has found any by a family member.
The agreement also prohibits the Sackler family from obtaining naming rights related to their charitable donations until they have paid all the money owed under the settlement and have given up all business interests related to the manufacturing or sale of opioids.
Massachusetts Attorney General Maura Healey, who had been the first attorney general to sue members of the Sackler family, praised the modified deal. She pointed to the $90 million her state would receive and the way the company could waive attorney-client privilege to release hundreds of thousands of confidential communications.
"While I know this resolution does not bring back loved ones or undo the evil of what the Sacklers did, forcing them to turn over their secrets by providing all the documents, forcing them to repay billions, forcing the Sacklers out of the opioid business, and shutting down Purdue will help stop anything like this from ever happening again," she said.
Purdue's plan also calls for members of the Sackler family to give up ownership of the Connecticut-based company as part of a sweeping deal it says could be worth $10 billion over time. That includes the value of overdose-reversal drugs the company is planning to produce.
Most groups representing various creditors, including victims and local governments, had grudgingly supported the plan. But state attorneys general until now were divided.
The attorneys general who had opposed the plan said they didn't like the idea of having to rely on profits from the continued sale of prescription painkillers to combat the opioid epidemic. The revised deal lets state and local governments opt out of receiving those funds. Attorneys general also said the deal didn't do enough to hold Sackler family members accountable or to make public documents that could help explain the company's role in the crisis.
The support from additional states comes less than two weeks before a deadline to object formally to Purdue's reorganization plan and about a month before a hearing on whether it should be accepted.
With just nine states and the District of Columbia remaining opposed to the plan, it makes it more likely the federal bankruptcy judge will confirm the deal.
Rod Boshart from The Gazette Des Moines Bureau contributed to this report.