Sacklers Threaten to Pull Out of Purdue Pharma Opioids Settlement

A scion of the Sackler family, the billionaire owners of Purdue Pharma, vowed in court on Tuesday that the family would walk away from a $4.5 billion pledge to help communities nationwide that have been devastated by the opioid epidemic, unless a judge grants it immunity from all current and future civil claims associated with the company.

Absent that broad release from liability, said David Sackler, 41, a former board member and grandson of one of the founders, the family would no longer support the deal that the parties have painstakingly negotiated over two years to settle thousands of opioids lawsuits brought by states, cities, tribes and other plaintiffs.

“We need a release that is sufficient to get our goals accomplished, and if the release fails to do that, then we will not support it,” Mr. Sackler declared during the fourth day of fractious testimony in the confirmation hearing for the bankruptcy plan of Purdue Pharma, whose misleading marketing of the prescription painkiller OxyContin is widely seen as igniting the opioid epidemic.

Instead, he said he believed the Sacklers would resume fighting all the cases “to their final outcomes” — a process that would be inordinately costly and protracted for everyone involved.

The Sackler’s $4.5 billion pledge is the centerpiece of the settlement plan and, without it, the deal will almost certainly collapse. The money is to be paid over nine or ten years, to begin to cover the extraordinary costs of an addiction crisis that has contributed to the deaths of more than a half-million Americans since the late 1990s. Under the plan’s other major terms, Purdue would be remade into a new public benefit company, whose profits would almost all go to the settlement, and the Sacklers would renounce all involvement.

They will, however, be allowed to remain involved in their considerable international pharmaceutical companies, through which they can continue to produce and market opioids for up to seven years, until the companies are sold, to seed the litigation payments.

Another signature feature would be a public repository for more than 30 million documents from Purdue and the Sacklers “so that academics and scholars and families of victims and everyone can look at those documents and understand what can happen when there is a fraud and how intense and how long that fraud can go on,” said Jayne Conroy, a lawyer who began pursuing Purdue in 2002, and who testified on Monday in favor of the plan.

A federal bankruptcy judge had been expected to confirm the plan at the end of these hearings, particularly after a majority of states that had earlier opposed the deal expressed support for it last month. But objections to the legal shield for the Sacklers have become the sharp focus of much of the testimony. The details of the Sacklers’ liability releases are so far-reaching that last week Judge Robert Drain himself said he had “some concerns about the breadth.”

Mr. Sackler testified by video before Judge Drain, who sits in White Plains, N.Y. It is believed to be the first time that a member of the family has appeared in open court on a matter related to OxyContin, though some Sacklers have given depositions in cases over the years.

He said the family anticipated that the liability shield would cover him, other members of his extensive family, and about 1,000 other individuals, including contractors and consultants, and protect them from lawsuits that had nothing to do with opioids.

That means they would be forever immunized from any current and future lawsuits worldwide related not only directly to Purdue’s opioids but to other drugs the company makes, including drugs for addiction reversal, high cholesterol and even constipation as a result of taking prescription opioids.

Purdue and the actions of Sackler family members, who as hands-on board members took a keen interest in the marketing of the company’s prescription opioids as nonaddictive, have been widely implicated in the opioid epidemic.

The company has pleaded guilty to federal criminal charges twice, most recently in 2021, during which the Sacklers themselves paid related civil penalties.

In his court appearance, Mr. Sackler refused to be pinned down by lawyers who sought to elicit an acknowledgment of family responsibility in the continuing tragedy, which saw a record-breaking number of overdose deaths last year during the pandemic. He continued to stoutly defend the company’s opioid medications as federally approved drugs to alleviate pain.

The balance between “risk and societal benefit is, I think, beyond question,” Mr. Sackler said. “So I bristle at the notion that people are dying as the only barometer of these medications.”

But at another moment during cross-examination, Mr. Sackler said, “I think because of the product we produced that has helped millions of people has also been associated with the opioid epidemic, we bear moral responsibility to try and help, and that’s what this settlement is designed to do.”

At least 2,700 lawsuits and hundreds of thousands of claims have been registered against Purdue, beginning in 2014, when the opioid epidemic began to crest. The plaintiffs span a vast array including 48 states, local governments, tribes, hospitals, individuals and monitors of infants born with symptoms of withdrawal to opioids, all of whom have been ravaged and financially depleted by opioids.

In more recent years, individual Sacklers themselves have been named in a growing number of the cases.

Nearly two years ago, Purdue filed for bankruptcy restructuring, which put an automatic stay on those lawsuits. But the Sacklers themselves did not file for bankruptcy, although they insisted that they, too, benefit from the liability releases expected to be given to their company.

The issue of releases for the Sacklers and other third parties is at the heart of the resistance to the bankruptcy plan now pursued by nine states, including Maryland, Washington and Connecticut. The District of Columbia, the federal Justice Department and U.S. Trustee, a program in the Justice Department that monitors bankruptcy cases, as well as some Canadian local governments and First Nations, have joined in the objections.

According to current law in the First Circuit Court of Appeals, in which Judge Drain’s court is located, the judge can grant releases to the Sacklers and other third-party individuals who have not filed for bankruptcy. But, broadly speaking, the issue is unsettled.

Other federal circuits prohibit it. The question has been taken up by members of Congress, and may well drive an appeal by the objectors, should Judge Drain confirm the plan. The hammering questions by objecting lawyers have so far been intended not only to raise questions about the plan, but to lay a foundation for such appeals.

Alain Delaquérière contributed research.

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