Texas Attorney General Ken Paxton and a bipartisan coalition of 27 state attorneys general agreed to a plan to hold OxyContin manufacturer Purdue Pharma accountable for its role in the nation’s deadly opioid epidemic, his office announced Wednesday.
The tentative settlement over the role Purdue Pharma played in the nation’s opioid addiction crisis falls short of the far-reaching national settlement the OxyContin maker had been seeking for months, with litigation sure to continue against the company and the family that owns it.
The agreement with about half the states and attorneys representing about 2,000 local governments, including McLennan County, would have Purdue file for a structured bankruptcy and pay as much as $12 billion over time, with about $3 billion coming from the Sackler family. That number involves future profits and the value of drugs currently in development.
In addition, the family would have to give up its ownership of the company and contribute another $1.5 billion by selling another of its pharmaceutical companies, Mundipharma.
“The opioid epidemic demands both attention and justice,” Paxton spokesman Marc Rylander said in a statement. “Texas is committed to holding Purdue Pharma accountable for fueling the opioid epidemic through deceptive marketing, and we are proud to participate in the nation’s most significant step in addressing this deadly crisis.”
In October 2017, McLennan County filed a lawsuit against the country’s largest opioid manufacturers and wholesale distributors, citing the county’s higher than average rate of prescription opioid distribution.
From 2006 to 2012, there were more than 56 million prescription pain pills, enough for 35 pills per person per year, supplied to McLennan County, according to The Washington Post’s Drug Enforcement Agency pain pills database.
H-E-B Grocery Co. distributed most of those pills, about 11.8 million, while SpecGx LLC manufactured the bulk of them, about 19.3 million pills, according to the database. Walgreens pharmacy received the highest number of pills.
Craig Cherry with the Haley & Olson law firm, one of two firms retained by McLennan County commissioners to litigate the case, said he is not at liberty to discuss the potential agreement with Purdue Pharma but that the case is “moving in positive direction for McLennan County, as well as local governments across the country, in their effort to abate this horrific epidemic.”
“This is a long way from being over,” he said.
Steve Harrison with the Harrison Davis Steakley Morrison Jones firm, the second law firm hired by the county, said he and other attorneys will not know if the terms of the tentative agreement are acceptable until they have been thoroughly reviewed.
“We’ve received information about the tentative settlement with Purdue Pharma, which is one of many defendants in the litigation,” Harrison said. “It is too early to comment on that information, but lawyers here at my firm, led by Matt Morrison, along with lawyers at the Haley Olson firm, led by Craig Cherry, will be reviewing all the information and advising the county. If there is a tentative settlement that is acceptable, that will be a good first step in the litigation.”
If the terms of the settlement are acceptable to those who filed suit, then the agreement would be put in place and payments would be made, depending on the terms of the settlement, Harrison said. Then the attorneys would move on to the other defendants in their case, which include Johnson & Johnson, Watson Laboratories Inc. and Pfizer Inc.
Paxton’s office filed a civil lawsuit against Johnson & Johnson last week for fraud, claiming the pharmaceutical manufacturer misrepresented the dangers of its opioid drug, Duragesic, to the Texas Medicaid program and helped fuel the state’s opioid epidemic, according to a press release.
“Johnson & Johnson not only defrauded Texas taxpayers and diverted precious healthcare dollars from Texans in need, they contributed to the opioid crisis that has destroyed the lives of an untold number of Texas families,” Paxton said in the press release.
Several attorneys general said the agreement would be a better way to ensure compensation from Purdue and the Sacklers than taking their chances if Purdue files for bankruptcy on its own.
Arizona Attorney General Mark Brnovich said the deal “was the quickest and surest way to get immediate relief for Arizona and for the communities that have been harmed by the opioid crisis and the actions of the Sackler family.”
But even advocates of the deal cautioned that it’s not yet complete.
“I don’t think there’s a settlement,” said Ohio Attorney General Dave Yost whose state was among those supporting it. “There is a proposal that’s been accepted by a majority of attorneys general, but there are quite a few significant states that have not joined at this point.”
“There’s still a lot of telephone calls going on. I think we see the outlines of a thing that might be, but it’s not yet,” Yost said in an interview.
Opioid addiction has contributed to the deaths of some 400,000 Americans over the past two decades, hitting many rural communities particularly hard.
The lawsuits against Stamford, Connecticut-based Purdue paint it as a particular villain in the crisis. They say the company’s aggressive marketing of OxyContin downplayed addiction risks and led to more widespread opioid prescribing, even though only a sliver of the opioid painkillers sold in the U.S. were its products.
The tentative agreement and expected bankruptcy filing would remove Purdue from the first federal trial over the opioids epidemic, scheduled to begin next month in Ohio.
In a statement after Wednesday’s announcement, the company said that it “continues to work with all plaintiffs on reaching a comprehensive resolution to its opioid litigation that will deliver billions of dollars and vital opioid overdose rescue medicines to communities across the country impacted by the opioid crisis.”
Even with Wednesday’s development, many states have not signed on. Several state attorneys general vowed to continue their legal battles against the Sacklers and the company in bankruptcy court. Roughly 20 states have sued members of the Sackler family in state courts.
Connecticut, Iowa, Massachusetts, Nevada, New Jersey, New York, Pennsylvania, North Carolina and Wisconsin were among the states saying they were not part of the agreement.
“Our position remains firm and unchanged and nothing for us has changed today,” Connecticut Attorney General William Tong said in a statement.
“The scope and scale of the pain, death and destruction that Purdue and the Sacklers have caused far exceeds anything that has been offered thus far,” Tong said. “Connecticut’s focus is on the victims and their families, and holding Purdue and the Sacklers accountable for the crisis they have caused.”
‘Slap in the face’
Pennsylvania Attorney General Josh Shapiro called the tentative deal “a slap in the face to everyone who has had to bury a loved one due to this family’s destruction and greed.”
He said he intends to continue fighting the Sacklers, who he said did not have to acknowledge any wrongdoing in their agreement.
“This is far from over,” he said.
Ryan Hampton, a Los Angeles-based advocate for people in recovery from opioid addiction, said he was launching “a massive effort” among victims’ families and others impacted by the crisis to urge state attorneys general not to accept the deal.
“The amount of money that’s being offered in this settlement doesn’t even scratch the surface for what’s needed,” Hampton said. “We want to see Purdue have their day in court. We know more money will come if this case goes to trial.”
Wednesday’s announcement came just days after a group of attorneys general negotiating directly with Purdue and the Sacklers said they had reached an impasse in talks. At the time, several attorneys general said they were not confident Purdue would pay the amount promised and wanted more assurance that the money would come through.
In the latest settlement agreement, New York Attorney General Letitia James accused the Sacklers of “attempting to evade responsibility and lowball the millions of victims of the opioid crisis.”
On Wednesday, the Sackler family said in a statement that it “supports working toward a global resolution that directs resources to the patients, families and communities across the country who are suffering and need assistance.”
“This is the most effective way to address the urgency of the current public health crisis, and to fund real solutions, not endless litigation,” it said.
Some 2,000 lawsuits brought by local governments, Native American tribes, unions and hospitals have been consolidated under a federal judge in Cleveland, who has been encouraging the parties to settle. U.S. District Court Judge Dan Polster invited state attorneys general, who had filed their own lawsuits, to lead the negotiations.
How any money from the settlement would be divided among all the entities is not entirely clear. Nevertheless, attorneys representing the local governments issued a statement saying they recommended the governments agree to the deal as a way to bring relief to their communities.
In March, Purdue and members of the Sackler family reached a $270 million settlement with Oklahoma to avoid a trial on the toll of opioids there.
A court filing made public in Massachusetts this year asserts that members of the Sackler family were paid more than $4 billion by Purdue from 2007 to 2018. Much of the family’s fortune is believed to be held outside the U.S., which could complicate lawsuits against the family over opioids.
The Sacklers have given money to cultural institutions around the world, including the Smithsonian Institution, New York City’s Metropolitan Museum of Art and London’s Tate Modern.