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Landmark $270 Million Opioid Lawsuit Settlement Opens Door for Dozens of Pending Cases
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Purdue Pharma recently agreed to pay Oklahoma $270 million rather than face trial on charges of misleading marketing practices and misrepresentation regarding Oxycontin, according to company and state press releases.
Court battles are far from over for the pharmaceutical company, which still faces 35 state lawsuits and a federal lawsuit in Cleveland involving more than 1,000 entities alleging the company withheld information about the addictive potential of Oxycontin from the public, according to experts.
The New York Times recently reported that New York, Massachusetts, Connecticut, Rhode Island and Utah have filed suit against members of the Sackler family who own Purdue Pharma and that the Sacklers are also named in the aforementioned federal lawsuit in Cleveland. In addition, lawsuit filings by attorney generals in New York and Massachusetts allege those states have documents that show the Sackler family sought to increase the market for Oxycontin, even after Purdue Pharma admitted in a plea deal it had “misrepresented the drug’s addictive qualities and potential for abuse.”
The Oklahoma settlement was announced about 2 months before the state trial against Purdue Pharma and three other pharmaceutical companies was slated to begin, according to the Oklahoma Attorney General’s office.
The bulk of the Oklahoma settlement is earmarked towards a national center for addiction treatment and research. Smaller amounts are intended to address the opioid epidemic throughout Oklahoma and reimburse the state for legal costs, Purdue Pharma said in a press release.
As trial preparations involving those other companies continue, David L. Noll, JD, associate professor of law at Rutgers Law School, offered potential reasons for Purdue Pharma’s decision to settle.
“The settlement seems driven by the imminent court date and the possibility that members of the Sackler family would be called to testify,” he told Healio Rheumatology.
The settlement in Oklahoma takes the legal proceedings against Purdue Pharma and the Sackler family out of the spotlight for now, but the investigations will continue, according to Noll.
“No other trials are scheduled in the immediate future where the Sacklers will be called to testify, so there probably won’t be any more settlements for a while,” he said. “However, bellwether trials in the federal case are scheduled to begin this fall. The threat of subpoenas to the Sacklers — and the threat that internal documents that suggest the family and company knew about these deceptions regarding Oxycontin’s addictive and potency qualities will enter the trial record — will create renewed settlement pressure.”
Noll added that “the company will take advantage of the lull between trials to work on a global settlement of opioids cases. It will work with plaintiffs’ attorneys and state attorneys general to determine how much total compensation is owed, who funds the settlement, and when settlement funds are paid.”
The New York and Massachusetts allegations add to the pressure on the Sacklers, according to Noll, and suggest those states will be “key participants” in the forthcoming settlement discussions.
“The lawyers will also look for a legal device that provides Purdue Pharma protection from future litigation and thus, engage bankruptcy counsel to explore the possibility of a Chapter 11 reorganization,” Noll said.
Forbes reported that Oxycontin has generated Purdue Pharma more than $35 billion in sales in the nearly 20 years since its release in 1995. The company’s annual revenues are about $3 billion, largely from Oxycontin. According to Forbes, the Sackler family is worth at least $14 billion. Noll said that despite the company’s resources, the sheer number of lawsuits makes it unlikely Purdue Pharma can survive without consequences to its long-term viability.
Purdue Pharma had not responded to Healio Rheumatology’s request for comment prior to publication. – by Janel Miller
Disclosure: Noll reports previously working with the Sackler family.