Some state attorneys general and opioid addiction activists pushed back Tuesday against a settlement offer from OxyContin maker Purdue Pharma, saying it didn’t include enough money and goes too far in protecting the company and family members who own it from future liability.
A group of nearly half the state attorneys general said it was disappointed in the plan Purdue filed late Monday night in federal bankruptcy court and some said they would seek changes. The lukewarm reaction from them and others raised doubts about how soon the company could emerge from bankruptcy and begin to compensate victims.
“We think it’s a step in the right direction, but we’ve got a long way to go,” said Joe Rice, one of the lead lawyers representing local governments that have sued Purdue and other companies over the toll of opioids.
The $10 billion plan calls for turning the Connecticut-based pharmaceutical giant into a new company, with its profits going toward efforts to combat the opioid crisis. Members of the Sackler family who own Purdue would contribute about $4.3 billion.
A new public health-oriented arm of the transformed company would produce addiction treatment and overdose antidote drugs, and a trove of company documents would be made public.
Most of the money would go to trusts that would distribute it to state and local governments. They would be allowed to use it only on initiatives that address the opioid crisis, which has contributed to more than 470,000 deaths in the U.S. since 2000.
Tennessee Attorney General Herbert H. Slatery III, a Republican, offered only tentative support Tuesday for Purdue’s plan. He said details remain to be ironed out on exactly how much money will go to state and local governments.
“While the Purdue Pharma plan filing represents a significant step toward providing crucial opioid abatement resources, Tennessee’s support is still contingent on remaining unresolved issues,” he said.
Some activists whose families have been hit hard by opioid addiction are upset about a provision of the plan that would prohibit lawsuits over opioid claims against the company, its owners and others, though protections like this are common in some areas of law, such as class-action cases. The list of who would be shielded from litigation over the toll of opioids was still in the works and not included.
Cynthia Munger, of Wayne, Pennsylvania, said Purdue’s plan is too focused on providing legal protections for members of the Sackler family. Her son is in recovery from an addiction that began more than a decade ago when he was prescribed OxyContin for a shoulder injury as a high school baseball player,
“The bankruptcy plan is a complete travesty!” she wrote in an email Tuesday.
Purdue has been negotiating its future through bankruptcy court for a year and a half with state and local governments, Native American tribes, groups representing individuals harmed directly by opioids and others. When it filed its reorganization plan late Monday night, Purdue said it has support from many of those interests.
A group representing victims in bankruptcy court is among those agreeing to the plan.
“Today marks an important step toward providing help to those who suffer from addiction,” members of the Sackler family said in a statement. “And we hope this proposed resolution will signal the beginning of a far-reaching effort to deliver assistance where it is needed.”
One of the major changes since Purdue sought bankruptcy protection in September 2019 is that it is now backing a fund to make payments to individuals harmed previously by opioids. Under the plan, victims and their families would share a pool of $700 million to $750 million. Checks would range from $3,500, which most children who were born in opioid withdrawal would receive, to $48,000 for survivors of those whose deaths were linked to OxyContin.
Scott Bickford, a lawyer representing the children, said he opposes the plan filed Monday because it does not spell out the process for determining which of his clients and other victims would qualify for payments.
“They say, ‘We’re not going to tell you who’s eligible and who qualifies,’” Bickford said. “That’s fundamentally unfair.”
State attorneys general have long been divided over whether to support Purdue’s plans, with nearly all the Republicans in favor and nearly all Democrats opposed.
On a Facebook Live video Tuesday, Massachusetts Attorney General Maura Healey, a Democrat, said the payment from Sackler family members was too little. She said it’s possible the family would emerge with more money because of their extended payment schedule of up to 10 years.
“They shouldn’t be allowed to keep their OxyContin fortune and walk away from this richer than they already are today,” Healey said.
In recent letters to a congressional committee, Sackler family members said those who previously served on Purdue’s board of directors had combined net assets of $1.1 billion. That’s just a fraction of the $12 billion to $13 billion family members received in transfers from the company over the years, according to earlier court filings. A lawyer said much of the transferred amount was consumed by taxes and reinvested in the company.
Healey said she intends to try to force Purdue, which pleaded guilty to federal criminal charges last year over its role in the opioid crisis, to amend its plan.
The plan is subject to approval from a bankruptcy court judge. Groups with claims against Purdue can vote on it by July 14, but there is no clear threshold for how much support it needs.