Big pharma’s moment of reckoning for roles in the opioid crisis began to unravel recently. On November 24, 2020, opioid maker Purdue Pharma LP pleaded guilty to fraud and kickback conspiracies amid a flurry of litigation over its role in the opioid epidemic. Purdue Pharma pitched a massive bankruptcy settlement to essentially make the bulk of litigation go away.
But a federal judge tossed out OxyContin maker Purdue Pharma’s bankruptcy settlement on December 16—including thousands of individual lawsuits—because of one particular, pricey provision that would have shielded members of the Sackler family from facing lawsuits of their own.
The Rise of Opioid Drugs
The Sackler family’s company Purdue Pharma unveiled OxyContin® 25 years ago, before more powerful opioids started popping up everywhere, including on the street. Documents made public in 2020 show how Purdue Pharma actively pushed to get higher numbers of prescriptions for painkillers. This happened before America hit a “record high” of drug overdoses during the pandemic last year, crowning decades of addiction, caused largely by people who are introduced to drugs through opioids.
While a New York bankruptcy court initially approved the bankruptcy settlement, it was quickly struck down. U.S. District Judge Colleen McMahon said in a written opinion on Thursday the New York bankruptcy court that approved the settlement did not have authority to grant the Sacklers immunity from future opioid litigation.
The Sackler Family—accused of fueling the opioid epidemic through doctor perks and more—insisted on installing legal shields, or nondebtor releases, in exchange for a $4.5 billion cash payout to resolve opioid litigation. Nondebtor releases protect parties that have not filed for bankruptcy themselves.
Under the scrapped deal, members of the Sackler family