WASHINGTON — The Supreme Court is hearing arguments on a nationwide settlement with OxyContin maker Purdue Pharma that would shield members of the Sackler family, who own the company, from civil lawsuits over the toll of opioids.
The deal struck with state and local governments and victims would provide billions of dollars to fight the opioid epidemic. The Sacklers would contribute up to $6 billion and give up ownership, and the company would emerge from bankruptcy as a different entity, with the profits used for treatment and prevention.
But the judges put the settlement on hold over the summer, responding to objections from the Biden administration. The arguments will take place on Monday.
The question for the judges is whether the legal shield that bankruptcy provides can be extended to people like the Sacklers, who have not themselves filed for bankruptcy. Lower courts have issued conflicting rulings on this issue, which also impacts other major product liability lawsuits handled through the bankruptcy system.
The U.S. Bankruptcy Trustee, a division of the Justice Department, argues that bankruptcy law does not allow the Sackler family to be protected from lawsuits by people who are not part of the settlement. During the Trump administration, the government supported the settlement.
Proponents of the plan said third-party releases are sometimes necessary to reach an agreement, and that federal law does not prohibit that.
Attorneys for more than 60,000 victims supporting the settlement called it “a turning point in the opioid crisis,” while acknowledging that “no amount of money could fully compensate victims” for the harm caused by OxyContin's deceptive marketing.
An attorney for a victim opposing the settlement called the provision on the Sacklers “special protection for billionaires.”
OxyContin first hit the market in 1996, and Purdue Pharma's aggressive marketing of the powerful prescription painkiller is often cited as a catalyst of the nationwide opioid epidemic, convincing doctors to prescribe painkillers without considering the dangers of addiction.
The drug and the Stamford, Connecticut-based company became synonymous with the crisis, even though most of the pills prescribed and used were generics. The number of opioid-related overdose deaths has continued to rise, reaching 80,000 in recent years. Most of these come from fentanyl and other synthetic drugs.
The Purdue Pharma settlement would be one of the largest reached by pharmaceutical companies, wholesalers and pharmacies to resolve epidemic-related lawsuits brought by state, local and Native American tribal governments and others. These settlements totaled more than $50 billion.
But it would be one of only two so far that include direct payments to victims from a $750 million pool. The payouts are expected to range from approximately $3,500 to $48,000.
Sackler family members no longer serve on the company's board and have not received any payouts from the company since before Purdue Pharma filed for bankruptcy. However, in the decade before that, they received more than $10 billion, about half of which went to taxes, according to family members.
A decision in Harrington v. Purdue Pharma, 22-859, is expected by early summer.