Plutocratic clan offers $1 billion more in bankruptcy bid to end opioid suits

Patrick Malone & Associates P.C. | DC Injury Lawyers
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Patrick Malone & Associates P.C. | DC Injury Lawyers

Members of the plutocratic Sackler clan have upped the ante yet again in a bankruptcy court bid to settle thousands of lawsuits targeting Purdue Pharmaceutical, the company long in the family’s grip and  blamed for untold misery in the now-resurgent opioid abuse and drug overdose crisis.

The latest, and perhaps final plan submitted to the courts for approval would oust the family from Purdue, converting it into a public trust company.

The Sacklers say they will add a billion dollars more from the family’s formidable fortunes to sums that would be extracted from the company itself.

This would provide $10 billion to be divided among disputing parties to battle the worsening opioid crisis, including more than $4 billion from the family.

The New York Times reported the sums would be divided into three main “buckets”:

“One to compensate individual plaintiffs, like families whose relatives overdosed or guardians of infants born with neonatal abstinence syndrome, as well as hospitals and insurers; another for [Indian] tribes; and the third — and largest — for state and local governments, which have been devastated by the costs of a drug epidemic that has only worsened during the Covid-19 pandemic.”

In exchange for $10 billion, the Washington Post reported, Purdue and the Sacklers would “be released from opioid-related litigation — a contentious point as many suing the company blame the Sackler family, in part, for the opioid epidemic that has killed more than 450,000 people in the United States in the past two decades, following Purdue’s development of OxyContin in 1996.”

Purdue advertised and marketed their powerful painkiller in relentless and deceptive fashion, providing a template for others, with Big Pharma, doctors, hospitals, insurers, and others playing various roles in inundating the country with addictive, debilitating, and lethal opioids, notably their synthetic versions. These prescription medications, in turn, opened the door to abuse and overdoses of illicit drugs. Rural and ex-urban areas were slammed by opioid-related problems, with big cities suffering with surging illegal drug overdoses.

Opioid makers, distributors, and others implicated in this public health menace have insisted they followed the law and share no fault for what had been, pre-pandemic, a leading public health crisis for the country.

States, cities, and other local governments, along with Indian tribes, filed thousands of suits against parties they blamed for the mess, with the federal courts consolidating the cases before a judge in Cleveland. Purdue, however, took a different step from other drug companies and cast its fate with the bankruptcy courts.

The plaintiffs in the voluminous cases have split over the settlement offers by Purdue and the Sacklers, with key parties, particularly from bigger and bluer states, denouncing the plans as insufficient. Other jurisdictions, however, say the case has dragged on and the needs are great and growing to attack the opioid crisis with any increased resources to do so highly welcome.

Crisis victims continue to be infuriated that full justice has not been done for the huge harms caused by Purdue and others implicated in the opioid crisis. The Justice Department, under the Trump Administration, raced to conclude a deal in November in which the Purdue company pleaded guilty to criminal charges for “defrauding health agencies and violating anti-kickback laws,” the New York Times reported.

In that deal, the family — whose fortunes have been estimated to run as high as $13 billion — faced no criminal charges but agreed to pay $225 million in civil penalties while admitting no wrongdoing. Federal prosecutors said as recently as in November that they still can charge family members.

The absence of charges combined with other family actions to rile critics, who say the Sacklers have plundered Purdue to enrich themselves and keep money away from plaintiffs. As the Washington Post reported:

“Members of the family withdrew about $10 billion in profits from 2008 to 2017, according to a forensic audit of their finances filed in the case. The family’s attorneys have argued that the distributions complied with a corporate integrity agreement and about half were paid as taxes.”

It is up in the air as to whether the bankruptcy court will approve the latest settlement plan. Critics say it is notably stingy to individuals harmed in the opioid crisis, the Washington Post reported:

“According to [court documents], about 130,000 personal injury claimants, including family members who lost relatives to overdoses from OxyContin, would receive compensation up to an estimated maximum of $48,000. That dollar amount, to families torn apart by addictive opioids, is insufficient, said Charlotte Bismuth, a former New York assistant district attorney following the bankruptcy case. ‘I am absolutely appalled, disgusted and angered by the paltry payments reserved for personal injury victims,’ Bismuth wrote in an email. ‘Families were devastated emotionally and financially: $48,000 doesn’t even begin to cover funeral costs and lost wages. It is an insult to those families who lost their reason to live overnight.’”

In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damages that can be inflicted on them by dangerous drugs, notably opioids. Complex lawsuits involving big numbers of plaintiffs can be difficult to resolve to the satisfaction of all concerned. The individual plaintiffs often deserve great credit for the fortitude it can require to withstand prolonged, withering legal onslaughts from deep-pocketed defendants, whether monied corporations or wealthy individuals who also may be held in high esteem by some for their philanthropy.

It was unacceptable that, among other factors, political and regulatory failures ever allowed the opioid abuse and drug overdose crisis to explode as it did — and that it has returned with a vengeance. Stat, the medical and scientific news site, reported that federal authorities recorded 81,003 deaths due to drug overdoses in the 12-month period ending last June. That was a “20% increase and the highest number of fatal overdoses ever recorded in the U.S. in a single year. The drug deaths started spiking last spring, as the coronavirus forced shutdowns, and more recent statistics … show the crisis has only deepened.”

The Biden Administration may be challenged on many fronts, notably in battling the coronavirus pandemic. It would help in dealing with prescription painkillers and other powerful medications if the administration would nominate a new, permanent chief of the federal Food and Drug Administration. That’s a urgent task for the president and Xavier Becerra, his newly confirmed Health and Human Services chief, We all have much work to do to re-energize the fight against the opioid menace.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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