Seven months after the Supreme Court struck a deal that would have resolved thousands of opioid cases against Purdue Pharma, the company's owners, members of the Sackler family, have increased their cash offer to settle the lawsuit — but with a new catch.
Under any new deal, the Sacklers would not receive immunity from future opioid lawsuits, a condition they had long pushed for but which the court ruled was impermissible.
Instead, they would pay up to $6.5 billion — $500 million more than the previous agreement — but with a new condition: Claimants, including states, municipalities and individuals, would have to set aside as much as $800 million in an account that resembles a legal-defense fund for the billionaires to fight such cases, according to people familiar with the negotiations.
Some details of the framework — but not the legal defense fund — were announced Thursday by New York Attorney General Letitia James. She said the total settlement totaled $7.4 billion, including $897 million from Purdue.
New York could receive as much as $250 million, she said.
“The Sackler family ruthlessly pursued profit at the expense of vulnerable patients and played a critical role in starting and fueling the opioid epidemic,” Ms. James said.
When the deal is completed, she added, the Sacklers “will no longer control Purdue and will never again be allowed to sell opioids in the United States.”
Following other settlements in opioid litigation nationwide, these payments are intended to fund efforts to prevent and treat addiction in hard-hit communities across the country.
It is unclear how many claimants will agree to the new conditions. Ms. James noted that 14 other states involved in the talks were on board, including Florida, Connecticut, Massachusetts, Tennessee, California and West Virginia.
But now the deal must be sold to all plaintiffs—not just the remaining states and thousands of local governments, but some 140,000 personal injury victims and hundreds of Native American tribes.
The legal reserve fund for the Sacklers may be depleted: New lawsuits against the Sacklers have already been threatened by a handful of states, counties, cities and individuals.
A spokesman for Washington state, which has successfully pursued other drug companies instead of making national deals, said the state was weighing its options.
The states, which are responsible for the bulk of these payments, would be required to keep at least $200 million in the account, with a total contribution of up to $800 million. After five years, unused funds would flow back to the states.
Final calculations of how much would be deducted from the total to pay lawyers, consultants and administration costs are still being discussed.
The Sacklers would pay nearly $3 billion in the first three years, with the remaining payments over another 12 years.
If the plan is approved by the plaintiffs, an arm of the Justice Department that oversees the bankruptcy system called the US Trustee, and a federal bankruptcy judge, Purdue would emerge late this year from the bankruptcy that has shielded the company since 2019. immediately pays the $897 million of its own cash to the parties that signed the deal.
That process is expected to be completed around the end of the year.
At that time, 15 years of Sackler payments would also begin. And most of the lawsuits that began more than a decade ago — eventually culminating in a clumsy combined lawsuit filed by cities, states, tribes, hospitals and individual victims, and argued by countless teams of lawyers — would likely end.
In the plan rejected by the Supreme Court, the Sacklers, long portrayed in films, television and news articles as the public face of predatory opioid manufacturers, demanded a guarantee for raising $6 billion: that all current and future lawsuits against them be related with Purdue and opioids would be excluded.
Purdue itself gets that protection as a standard benefit granted when a company goes bankrupt. But because the Sacklers had not personally filed for bankruptcy, the Supreme Court ruled in June that granting them permanent civil immunity fell outside the scope of the bankruptcy law.
The purpose of the statutory reserve fund, in which plaintiffs will essentially pay to defend the Sacklers against other plaintiffs, is to satisfy the court's order.
“If states are expected to contribute money to the Sacklers' legal defense, the public will want to hear more about the impact of that money going to the Sacklers and their lawyers, rather than to combating opioids,” says Melissa B. Jacoby, a bankruptcy commissioner. expert at the University of North Carolina School of Law.
