The United States Department of Justice (DOJ) is denouncing a proposed bankruptcy plan for Purdue Pharma, the manufacturer of OxyContin. In court filings from mid-July, the DOJ’s Trustee Program, which keeps a close eye on the federal bankruptcy system, describes the settlement as fatally flawed, unconstitutional, and illegal. In a second statement, the office of the U.S. Attorney for the Southern District of New York argued that the plan went against the “constitutional right to due process” for individuals with potential opioid claims.
Purdue Pharma Opioid Settlement
According to the settlement, which has been negotiated over the past year, the Sackler family, who owns Purdue Pharma, would pay nearly $4.3 billion from their private accounts to help the people and communities negatively affected by OxyContin. In return, members of the family as well as a long list of their associates, would be given “third-party releases,” protecting them from future opioid lawsuits. Although that provision has raised eyebrows, more and more states are agreeing to the plan.
In his objection, Trustee William Harrington described the settlement as “impermissible.” He blamed the Sacklers, who, by their own calculations, earned more than $10 billion from opioid sales, and their associates of using the bankruptcy system to avoid taking responsibility for “alleged wrongdoing in concocting and perpetuating for profit one of the most severe public health crises ever experienced” in our country. In a separate filing, U.S. Attorney Audrey Strauss said that the bankruptcy plan denies due process to those with potential claims.
Purdue Pharma as Trigger for Opioid Epidemic
The marketing of OxyContin by Purdue Pharma in the late 1990s is recognized as a primary trigger of the deadly opioid epidemic, which has killed over 500,000 Americans. The company has pleaded guilty twice to federal criminal charges concerning its marketing techniques. Still, the Sacklers believe they have done nothing wrong and acted ethically.
Federal Bankruptcy Judge Robert Drain is expected to approve the settlement at a confirmation hearing planned for Monday, August 9. He believes the plan is “an opportunity to avoid years of costly and uncertain litigation.”
For more information about the opioid epidemic and settlement, contact us today.
Additional Reading:
Tentative Opioid Settlement For $26 Billion Focuses on Treatment, Prevention, and Education
Johnson & Johnson Agrees to End Opioid Business With $230 Million Settlement
Tracy Everhart
Tracy Everhart is the Editor for Drug Law Journal. A highly-trained and certified medical professional, Tracy is also an accomplished medical writer. After spending years on the front lines of the medical profession, Tracy now devotes her expertise and skills to researching and reporting on new drugs and devices that enter the market, as well as their side-effects and the real-life stories involved. Prior to joining Drug Law Journal, Tracy wrote for benchmark online healthcare resources focused on families and, in particular, women’s health issues. Tracy holds post-graduate degrees from both the American College of Healthcare Sciences and the Yale School of Nursing. She is also a graduate of both Hampshire College, where she studied microbiology and the University of South Carolina school of nursing.
