Judge Rejects Opioid Lawsuit Settlement for Purdue Pharma’s Sackler Family

A federal judge has rejected Purdue Pharma’s Opioid Lawsuit Settlement agreement releasing the Sackler Family from liability over OxyContin. The agreement had been reached on December 16, 2021, in bankruptcy court and would settle thousands of Opioid lawsuits filed by government agencies and people who had been harmed by OxyContin.

Through the bankruptcy court agreement, the Sackler family was to be allowed to pay $4.5 billion to avoid civil liability over their involvement in the Purdue Pharma-OxyContin Opioid lawsuit battles. On December 16, U.S. District Judge Colleen McMahon overruled the agreement that freed the Sackler family from liability, stating that the bankruptcy court did not have authority to grant the third-party release from liability.

Purdue Bankruptcy Filing

Purdue filed for bankruptcy in September 2019 in the midst of thousands of lawsuits which claimed that the company had pushed prescribing and misrepresented risks of OxyContin, fueling the opioid crisis which has resulted in an estimated 500,000 deaths due to overdose.

The bankruptcy court agreement reached between Purdue and its creditors would allow the company to remain in business, however the Sackler family would give up ownership of the privately owned pharmaceutical company.

Future profits of the company would be used to fight the opioid crisis including the development of new anti-addiction and anti-overdose drugs. In exchange for a $4.5 billion contribution to lawsuit settlements, the Sackler family would be granted protection from current and future civil liability claims.

Settlement Rejected

The settlement was overturned by an appeals court after several states and other organizations objected to the release of the Sackler family. Purdue Pharma has long been a privately owned corporation controlled by various members of the Sackler family. The family has been named as co-defendants in most of the opioid lawsuits against Purdue.

Though opponents showed evidence the family may have been hiding billions of dollars in anticipation of a bankruptcy filing, the reason for the rejection of the settlement by Judge McMahon did not involve wrongdoing by the family. The judge agreed with opponents that the bankruptcy court did not have the authority to release the Sackler family, a third party from future liability decided in other courts.

Over 3,000 lawsuits filed against Purdue and its private owners, members of the Sackler family. Claims mad include accusations that the company and its owners contributed to the deaths of 500,000 people since OxyContin entered the U.S. market in 1999. Purdue and the Sackler family have stated that they will appeal the ruling and will simultaneously try to negotiate another plan which will be acceptable.

Notwithstanding claims relating to this product, the drug/medical device remains approved by the U.S. FDA. 

Sources:

• Judge Rejects Purdue Pharma’s Sweeping Opioid Settlement, U.S. News (12/16/2021)
• Purdue Pharma seeks to appeal U.S. ruling that overturned its opioid settlement, Reuters (12/31/2021)