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Purdue Pharma Settlement Overturned in Federal Court

Purdue Pharma Settlement Overturned in Federal Court


Purdue Pharma Settlement Overturned in Federal Court

A federal judge yesterday overturned the closely scrutinized September 1 settlement of thousands of lawsuits filed against drug maker Purdue Pharma in relation to its aggressive marketing of the powerful opioid OxyContin. Judge Colleen McMahon of the US District Court for the Southern District of New York cast a cold eye on a provision in the settlement that shielded the members of the Sackler family who owned the company from future civil lawsuits related to the drug.The family members had sought immunity from such lawsuits in exchange for $4.5 billion of their personal wealth, which they offered up as part of Purdue’s bankruptcy settlement, under the terms of which the Sacklers would renounce ownership of the company. The drug maker would restructure as Knoa Pharma and continue to make OxyContin as well as other drugs, with its profits funding state and local opioid-addiction treatment and prevention efforts. The Sackler money was to be paid out over a span of nine years and was to be used for the same purpose.Judge Robert Drain of the US Bankruptcy Court in White Plains, New York, who presided over the original settlement, had contended that it represented the fastest way to get money into education and treatment and into the hands of victims of addiction, who are eligible for payouts ranging from about $3,500 to roughly $48,000. McMahon noted that Sackler family members withdrew more than $10 billion between 2008 and 2018, at the long and sustained height of the opioid crisis, during which more than half a million Americans died. By 2019, most of this personal wealth was secure in offshore accounts and thus unobtainable by US authorities. As a result of the staggering drain on its finances, Purdue was cash poor. Faced with a raft of lawsuits from state, local, and tribal governments, it filed for bankruptcy.McMahon called into question the authority of the bankruptcy court in allowing the Sackler family members to escape litigation without filing for bankruptcy themselves. US Attorney General Merrick B. Garland following her ruling issued a statement asserting that “the bankruptcy court did not have the authority to deprive victims of the opioid crisis of their right to sue the Sackler family.”The ruling is the latest blow to the Sackler family, who earlier this month saw their name stripped from the galleries of New York’s Metropolitan Museum of Art amid a continued campaign by advocacy group P.A.I.N. (Prescription Addiction Intervention Now). The group was founded by artist Nan Goldin, who overcame an addiction to OxyContin that developed after she was prescribed the drug following an injury. P.A.I.N., which has accused the Sacklers of “artwashing” profits gained from Purdue via large donations made to museums in return for naming rights, has successfully lobbied major institutions to refuse the family’s money and remove the Sackler name from public spaces.


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