US Court Annuls Purdue Pharma Opioid Settlement Plan

Published: 21 December 2021

Purdue Pharma Pills

Purdue Pharma has been accused of pushing doctors to prescribe its OxyContin, this way fueling the opioid crisis that has killed nearly half a million people in the U.S. over the past 20 years. (Photo: Mike Licht, Flickr, License)

By Damir Bešlija

A U.S. District Court judge last week dismissed the bankruptcy plan of Purdue Pharma that would grant its owners immunity from thousands of lawsuits related to the company’s role in the opioid epidemic.

Purdue Pharma has been accused of pushing doctors to prescribe its OxyContin, this way fueling the opioid crisis that has killed nearly half a million people in the U.S. over the past 20 years.

With its creditors, the company developed in September a plan through a bankruptcy court that would turn Purdue into a company that still sells opioids but the profits would go toward fighting the crisis. Moreover, the plan required that Purdue Pharma develop new anti-addiction and anti-overdose drugs and give them for free or sell at little cost.

Part of the plan was that the Sackler family, which owns the company, would give up ownership, which would also grant them immunity from lawsuits of the victims.

But U.S. District Judge Colleen McMahon in New York overturned the bankruptcy court ruling and argued that the Sacklers were “well aware that they were exposed to personal liability over OxyContin,” and over the years withdrew billions from Purdue between 2008 and 2017, putting more than half of it in offshore companies or trusts that could not be reached in bankruptcy.

Attorney General Merrick B. Garland welcomed the Court’s decision and said that “the bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family.”

Following the decision, the chairman of the Purdue board of directors, Steve Miller, said the ruling would “delay, and perhaps end, the ability of creditors, communities, and individuals to receive billions in value to abate the opioid crisis.”

The company stated that it would appeal the ruling.