OxyContin maker’s settlement plan divides victims of opioid crisis. Now it’s up to the Supreme Court

WASHINGTON — The maker of OxyContin’s agreement to settle thousands of lawsuits over the harm caused by opioids could help combat the overdose epidemic the painkiller has helped cause. But that doesn’t mean all victims are satisfied.

In exchange for giving up ownership of drugmaker Purdue Pharma and contributing up to $6 billion to combat the crisis, members of the wealthy Sackler family would be released from any potential civil lawsuits. At the same time, they could potentially keep billions of dollars from their profits from OxyContin sales.

The Supreme Court will hear arguments on Dec. 4 on whether the agreement, part of the resolution of Purdue Pharma’s bankruptcy, violates federal law.

The question for the judges is whether the legal shield provided by bankruptcy can be extended to people like the Sacklers, who have not themselves been declared bankrupt. The legal issue has led to conflicting decisions from lower courts. It also impacts other major product liability lawsuits handled through the bankruptcy system.

But the agreement, even with billions of dollars set aside for opioid control and treatment programs, also poses a moral conundrum that has divided people who have lost loved ones or lost years of their own lives to opioids.

Ellen Isaacs’ 33-year-old son, Ryan Wroblewski, died in Florida in 2018, about 17 years after he was first prescribed OxyContin for a back injury. When she first heard about a possible settlement that would include money for people like her, she signed up. But she changed her mind.

Money may not bring closure, she said. And allowing the deal to happen could lead to more problems.

“Anyone in the future could do exactly what the Sacklers can do now,” she said in an interview.

Her attorney, Mike Quinn, put it this way in a court filing: “Sackler’s releases are a special protection for billionaires.”

Lynn Wencus, of Wrentham, Massachusetts, also lost a 33-year-old son, Jeff, to an overdose in 2017.

She initially opposed the deal with Purdue Pharma, but has come around. Although she doesn’t expect a payout, she wants the settlement to be finalized, hoping it will help her stop thinking about the Purdue Pharma and Sackler family members, whom she blames for the opioid crisis.

“I feel like I can’t really move on with all this hanging in the courtroom,” Wencus said.

Purdue Pharma’s aggressive marketing of OxyContin, a powerful prescription painkiller that hit the market in 1996, is often cited as the catalyst for a nationwide opioid epidemic, convincing doctors to prescribe painkillers without considering the dangers of addiction .

The company pleaded guilty to misbranding the drug in 2007 and paid more than $600 million in fines and penalties.

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. That’s partly because people with substance abuse found it harder to get pills and turned to heroin and, more recently, fentanyl, an even more powerful synthetic opioid.

Drug manufacturers, wholesalers and pharmacies have agreed to pay a total of more than $50 billion to settle lawsuits brought by state, local and Native American tribal governments and others who alleged that the companies’ marketing, sales and monitoring practices sparked the epidemic. The Purdue Pharma settlement is said to be one of the largest. It is also one of only two provisions so far for victims of the crisis to be directly compensated, with payouts from a $750 million pool expected to range from about $3,500 to $48,000.

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.

As a result, parts of the Sackler family story have been told in multiple books and documentaries and in fictionalized versions in the streaming series “Dopesick” and “Painkiller.”

Museums and universities around the world have removed the family’s name from galleries and buildings.

Family members have largely stayed out of the public eye, stepping down from the boards of their companies and not receiving payouts since the company went bankrupt. But in the decade before that, they received more than $10 billion, with family members saying about half went to taxes.

Some testified at a 2021 bankruptcy hearing, telling a judge that the family would not contribute to the proposed legal settlement without being protected from lawsuits.

Two family members appeared via video and one listened via audio to a 2022 court hearing in which more than two dozen people affected by opioids publicly told their stories. One of them said to them, “You poisoned our lives and had the audacity to blame us for our deaths.”

Purdue Pharma reached a deal with the governments that had sued for the plan – including some states that had initially rejected the plan.

But the U.S. Bankruptcy Trustee, an arm of the Justice Department responsible for promoting the integrity of the bankruptcy system, has objected to legal protections for Sackler’s family members. Attorney General Merrick Garland has also criticized the plan.

The opposition marked a turnaround for the Justice Department, which supported the settlement during the presidency of Donald Trump, a Republican. The department and Purdue Pharma have reached a settlement in a criminal and civil case. The deal included $8.3 billion in fines and forfeitures, but the company would pay the federal government only $225 million as long as it implemented the settlement plan.

A federal court judge ruled in 2021 that the settlement should not be allowed. This year, a federal appeals panel ruled the other way in a unanimous decision with one judge still expressing major concerns about the deal. The Supreme Court quickly agreed to hear the case at the urging of the administration of President Joe Biden, a Democrat.

Purdue Pharma’s isn’t the first bankruptcy to include this type of third-party disclosure, even if not everyone in the case agrees. It was specifically authorized by Congress in 1994 for asbestos cases.

They have also been used elsewhere, including in the settlement of sex abuse claims against the Boy Scouts of America, where groups such as regional Boy Scout councils and churches that sponsor troops helped pay, and against Catholic dioceses, where parishes and schools contributed money .

Proponents of the Purdue Pharma settlement plan often argue that federal law does not prohibit third-party disclosures and that they may be necessary to reach a settlement that the parties agree to.

“Third-party releases are a recurring feature of bankruptcy practice,” attorneys for one branch of the Sackler family said in a court filing, “and not because anyone is trying to please the released third parties.”

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Mulvihill reported from Cherry Hill, New Jersey.

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This story has been corrected to show that the appeals court ruling was unanimous, not 2-1.