Big Pharma Pays $270 Million In First Oxycontin Case

Analysis Health

Purdue Pharma LP has forged the first deal to resolve more than 1,600 lawsuits blaming the OxyContin maker for fueling the opioid crisis, a move that could lay the groundwork for the resolution of the rest of the litigation.

The company and its owners, the Sackler family, agreed to pay $270 million to resolve a lawsuit filed by Oklahoma’s attorney general, the majority of which will fund a national opioid addiction center, the two sides said Tuesday.

While the deal only directly affects one of the more than 35 states and hundreds of municipalities pressing claims against Purdue, it allows the company to avoid a rapidly approaching May trial date, the first scheduled in the opioid cases. The televised trial could have exposed the company to potentially damaging testimony and an unpredictable jury verdict.

Purdue, based in Stamford, Conn., can now focus on resolving the rest of the lawsuits filed by cities, counties and states, possibly on a global basis. The municipalities claim aggressive marketing of prescription painkillers by Purdue and other pharmaceutical companies helped trigger widespread drug addiction that has saddled the communities with significant financial burdens.

The Oklahoma deal could speed up those settlement talks. “It’s got to set off a feeding frenzy,” said Elizabeth Burch, a law professor at the University of Georgia. “There’s blood in the water now.”

Purdue has said it is considering bankruptcy protection, a legal maneuver that could ease a global settlement. The next trials are scheduled in the fall in Ohio, where hundreds of cases have been consolidated in federal court. That trial date will likely become the de facto next deadline for further settlements or bankruptcy filing.

The maker of OxyContin and its billionaire owners have been under intense pressure as lawsuits have mounted. Purdue has produced millions of pages of documents for plaintiffs’ lawyers, and the U.S. House Oversight Committee on March 21 asked the company to turn over documents related to Sackler family members and their role in the company’s marketing.

Two Sackler family members had been scheduled to be deposed in the Oklahoma case but now won’t be called to testify. Other family members are sitting for depositions in the federal multidistrict litigation. Some family members have faced pushback from recipients of their vast philanthropy.

The Oklahoma settlement includes $102.5 million from Purdue to fund an addiction and treatment center at Oklahoma State University and $20 million worth of medicine. Purdue will also pay $12.5 million to be distributed to local cities and counties and up to $60 million to cover litigation costs.

Descendants of company founders Mortimer and Raymond Sackler have pledged an additional $75 million over five years to the addiction center, which will be supported by an advisory board of experts in academia, medicine, law enforcement and treatment.

“This begins a new chapter for those struggling with addiction,” Oklahoma Attorney General Mike Hunter said. He said the settlement isn’t at risk if Purdue files for bankruptcy, and that the company told the state it wouldn’t be taking that step in the near term.

Purdue Chief Executive Craig Landau and a statement from the families of Drs. Mortimer and Raymond Sackler each emphasized the deal will help those battling addiction and is a continuation of the company’s efforts to combat prescription opioid abuse and diversion.

The Sacklers said the settlement “is not a financial model for future settlement discussions” and disputed what they called “recent attacks on our family.”

“One of the big concerns is that money will be used to fill potholes,” or lower taxes, said Andrew Kolodny, a Brandeis University researcher and critic of opioid makers’ business practices. “What Oklahoma has managed to do is protect this money for opioid prevention and addiction treatment.”

Paul Hanly, one of the lead attorneys for municipalities in the federal cases, said he expects any eventual settlement in the multidistrict litigation to include similar provisions to make sure the money helps those affected by the crisis.

In court filings, Oklahoma blamed Purdue and other drugmakers for helping spark an eightfold rise in drug overdose deaths from 1999 to 2012. The state had 823 fatal drug overdoses in 2015, it said in its June 2017 lawsuit. The state said it leads the nation in nonmedical use of painkillers, with nearly 5% of those aged 12 and above abusing or misusing the drugs.

Purdue and other drugmaker defendants in the Oklahoma case had pushed a judge to delay the trial, arguing that they have been stymied by the state in obtaining the documents and interviews they require to defend themselves.

State court Judge Thad Balkman denied the request earlier this month, saying he didn’t care that the trial was the first in the nation but that “the wheels of justice…will continue to turn, unimpeded.”

The Oklahoma Supreme Court said Monday it wouldn’t take up an appeal of the judge’s decision.