Purdue Pharma, US states agree to new opioid settlement

Rhode Island will receive approximately $45 million from the at least $5.5 billion settlement, which also requires that the Sackler family, who owns the pharmaceutical company, apologize for their role in the opioid epidemic

Family and friends who have lost loved ones to OxyContin and opioid overdoses left pill bottles in protest outside the headquarters of Purdue Pharma in Stamford, Conn.Jessica Hill/AP/file

OxyContin maker Purdue Pharma reached a settlement Thursday over its role in the nation’s deadly opioid crisis that includes U.S. states and thousands of local governments, with the Sackler family members who own the company boosting their cash contribution from $4.325 billion under the original plan to at least $5.5 billion. In all, the plan could be more than $10 billion over time.

Rhode Island Attorney General Peter Neronha, along with eight other attorney generals, had appealed an earlier settlement. They agreed to the one announced Thursday after the Sacklers increased the cash payout and accepted other terms, including apologizing for their role in the opioid epidemic. In exchange, the family would be protected from civil lawsuits.

The plan also calls for members of the Sackler family to give up control of the Stamford, Connecticut-based company so it can be turned into a new entity with profits used to fight the crisis.

Rhode Island will receive approximately $45 million from the settlement. The first payment of about $4 million is expected sometime this summer, Neronha told the Globe. A portion of the funds secured through the bankruptcy will be distributed to Rhode Island’s cities and towns, as with the distributors and Johnson & Johnson settlements announced earlier this year.

“As I have said before, there is no amount of money that will be enough to undo or compensate Rhode Islanders for the harms perpetrated by Purdue and the Sacklers,” said Neronha. “I objected to the bankruptcy plan because, in my view, the plan didn’t provide justice or accountability, and didn’t provide adequate resources for treatment and recovery.”

The Sackler family members have not offered an apology in the past. In addition, victims are to have a forum in court to address Sackler family members — something they have not been able to do in a public setting.

Neronha said he and the eight attorney generals met with survivors, and there may be some Rhode Islanders willing to speak in front of the court.

The settlement, in a mediator's report filed in U.S. Bankruptcy Court in White Plains, New York, still must be approved by a judge.

Purdue Pharma's headquarters stands in Stamford, Conn. Mark Lennihan/AP/File

“The Sackler families are pleased to have reached a settlement with additional states that will allow very substantial additional resources to reach people and communities in need," the apology reads. "The families have consistently affirmed that settlement is by far the best way to help solve a serious and complex public health crisis. While the families have acted lawfully in all respects, they sincerely regret that OxyContin, a prescription medicine that continues to help people suffering from chronic pain, unexpectedly became part of an opioid crisis that has brought grief and loss to far too many families and communities.”

When asked about the Sackler’s apology, Neronha said some of his colleagues had “strong feelings about it.”

“Apologies can also just be words. For me, it was about making sure that we inflicted the kind of financial penalty to the greatest extent we could,” said Neronha. “I think we did that today.”

“There’s never enough money. Of course, I wanted to get every cent I could,” said Neronha. “But no amount of money is going to bring back the lives we lost or the number of years survivors had to go through this addiction.”

Though members of the Sackler family would be protected from lawsuits over opioids, the deal would not shield them from criminal charges, though there’s no indication any are forthcoming. In a separate push to hold the Sacklers accountable for the opioid crisis, a group of seven U.S. senators, all Democrats, wrote the U.S. Department of Justice in February asking prosecutors to consider criminal charges against family members.

Individual victims of the opioid crisis and their survivors are to share a $750 million fund, a key provision not found in other opioid settlements. About 149,000 people made claims in advance and could qualify for shares from the fund; others with opioid use disorder and the survivors of those who died are shut out.

That amount is unchanged in the new plan, but states will be able to create funds they can use to compensate victims beyond that, if they choose.

Rhode Island’s $45 million in the settlement doubles its recovery of approximately $20 million from the initial bankruptcy plan. All funds will be used to fund opioid treatment and prevention, said Kristy dosReis, a spokeswoman for the attorney general’s office.

The settlement keeps intact provisions of the Purdue bankruptcy plan, so the company will be forced to dissolve or sell by 2024. The Sacklers will be banned from the opioid business.

The initial bankruptcy plan also required Purdue and the Sacklers to make public over 30 million documents, and the settlement announced Thursday forces the disclosure of additional records previously withheld as privileged legal advice regarding advocacy before Congress.

The Sacklers and Purdue will also have to disclose documents related to the promotion, sale, and distribution of Purdue opioids; the structure of the Purdue Compliance Department and its monitoring and abuse deterrence systems; and any documents regarding recommendations from McKinsey & Company, Razorfish, and Publicis related to the sale and marketing of opioids.

The new settlement also includes an agreement from Sackler family members that they won’t fight when institutions attempt to take the names off of buildings that were funded with the family’s support.

Most of the the money is to flow to state and local governments, Native American tribes and some hospitals, with the requirement that it be used to battle an opioid crisis that has been linked to more than 500,000 deaths in the U.S. over the past two decades.

“I fought hard for the principle that third-party releases for the Sacklers, who aren’t bankrupt and yet want the benefits and protections of the bankruptcy process, are unlawful, and we won,” said Neronha. “Today’s settlement represents a significant, meaningful increase, nearly 25 percent, in the amount of money the Sacklers must pay.”

“This settlement also lays bare the dangers of third-party releases in the bankruptcy context – the Sacklers were almost allowed to get away with leaving more than a billion dollars on the table,” said Neronha.

Purdue, the originator of time-release versions of powerful prescription painkillers, is the highest-profile company out of many that have faced lawsuits over the crisis. It has twice pleaded guilty to criminal charges related to its business practices around OxyContin.

The latest announcement follows another landmark settlement late last week, when drugmaker Johnson & Johnson and three distributors finalized a settlement that will send $26 billion over time to virtually every state and local governments throughout the U.S. If the latest Purdue deal wins approval, the two settlements will give local communities that have been devastated by opioid addiction a significant boost to help them combat the epidemic.

Rhode Island had filed a suit against the OxyContin maker and the Sacklers in 2018 and 2019, suing eight individually named members of the Sackler family. Purdue Pharma filed for bankruptcy in September 2019.

In 2021, the bankruptcy court approved their bankruptcy plan that granted a lifetime legal shield to the Sackler family, which blocked states like Rhode Island from pursing claims against the family. Eight states and the District of Columbia refused to sign on and then appealed after the deal was approved by the bankruptcy judge.

In December 2021, a U.S. district judge sided with D.C. and the eight holdout states — California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont and Washington. The judge, Colleen McMahon, rejected the settlement with a finding that bankruptcy judges lack the authority to grant legal protection to people who don’t themselves file for bankruptcy when some parties disagree.

“Our odds weren’t great. It’s why only nine of us were still standing,” said Neronha.

Purdue appealed that decision, which, if left standing, could have scuttled a common method of reaching settlements in sweeping, complicated lawsuits.

Meanwhile, U.S Bankruptcy Judge Robert Drain, who had approved the earlier plan, ordered the parties into mediation and on several occasions gave them more time to hammer out a deal.

Thursday’s settlement is the product of a court-ordered mediation that began on Jan. 3 (2022) under Judge Shelley C. Chapman, a federal bankruptcy judge.

The new plan still requires Drain’s approval. Appeals related to the previous version of the plan could continue moving through the court system.

“We all know someone that lost their life to this opioid crisis,” said Neronha. “Days like this are always a time of reflection. But it’s a sad reflection.”

Material from Geoff Mulvihill and John Seewer of The Associated Press was used in this report