Members of the Sackler family who own Purdue Pharma LP have offered roughly $US4.3 billion ($NZ5.9b) to resolve sprawling opioid litigation, up from $3 billion initially proposed in settlement discussions underway in the OxyContin maker's bankruptcy proceedings, four people familiar with the matter said.
Pill Man, a sculpture made from US man Frank Huntley's oxycontin and methadone prescription bottles, is seen on Pennsylvania Avenue near the White House in Washington in August 2019. Photo: AFP
Sackler family members are now willing to contribute $4.275 billion to help settle about 3000 lawsuits brought by US communities seeking to hold them and Purdue responsible for damage wrought by the opioid epidemic, the sources said.
Purdue and representatives for the Sacklers declined to comment or did not immediately respond to requests.
Details of a far-reaching settlement could be outlined in a Purdue reorganisation plan due to be filed in a US bankruptcy court next week.
Purdue filed for bankruptcy in 2019 facing on onslaught of opioid litigation. In November, the Stamford, Connecticut-based company pleaded guilty to three felonies arising from its marketing of prescription opioid painkillers.
Purdue Pharma filed for bankruptcy in 2019 in the wake of opioid litigation. Photo: AFP
A previous proposed settlement that Purdue values at more than $10b guaranteed $3b from the Sacklers over seven years, with additional funds from family members contingent on sales of other international businesses they own. That offer as a practical matter decreased to $2.775b after the Sacklers agreed to pay $225 million to settle a Justice Department civil probe.
Under terms of the latest proposal, the Sacklers could still use proceeds from sales of those businesses to cover the higher $4.275 billion payout, but would need to make good on it regardless. It is not clear how long the Sacklers would take to pay the proposed higher amount, but it would likely be a period of years, the sources said.
Ongoing negotiations
Settlement negotiations are ongoing and no final agreement, including on how much the Sacklers will pay, has yet been reached among the family members, Purdue and US communities suing over the opioid crisis said.
Elsewhere in the settlement negotiations, some litigants have been pushing for Purdue to explore a sale in lieu of a current proposal to dissolve itself and shift assets to a public benefit company or similar entity run on behalf of plaintiffs and no longer controlled by the Sacklers, two people familiar with the matter said.
Attorneys general from two dozen states and Washington, DC, have opposed that plan because the new entity would continue selling OxyContin, which they view as improperly entangling them with the addictive painkiller.
Purdue in November admitted to defrauding US officials and paying illegal kickbacks to both doctors and an electronic healthcare records vendor, part of widespread criminal misconduct that facilitated improper opioid prescriptions.
The company overall agreed to $8.3b in criminal and civil penalties to resolve US Justice Department probes, most of which will go unpaid. A $3.54b criminal penalty and $2.8b civil penalty are set to be considered alongside trillions of dollars in unsecured claims as part of Purdue's bankruptcy proceedings.
Purdue agreed to pay $225m toward a $2b criminal forfeiture, with the Justice Department forgoing the rest if the company's bankruptcy reorganisation creates a public benefit company or similar entity steering the remaining $1.775b to US communities for combating the opioid crisis.
Sackler family members have not been criminally charged. They agreed to pay $225m to resolve allegations they caused false claims for OxyContin to be made to government healthcare programs such as Medicare. They have denied the allegations.
The opioid epidemic has claimed the lives of roughly 450,000 people across the United States since 1999 due to overdoses from prescription painkillers and illegal drugs such as heroin and fentanyl, according to the US Centres for Disease Control and Prevention.
Purdue's bankruptcy filing halted litigation against the company and its Sackler family owners. Since then, the company has been working toward proposing a reorganisation plan that would serve as a blueprint for settling the thousands of outstanding lawsuits.
Purdue's proposal to resolve cases in a deal it values at more than $10b is largely contingent on future donations of overdose reversal and addiction treatment medications the company has under development.
How much the Sacklers will contribute has long been a key sticking point in negotiations among family members, Purdue and plaintiffs. Many states rejected their initial $3b offer as too low.
In December, two Sackler family members offered apologies when testifying before a congressional panel over the role OxyContin played in the opioid crisis. The family members, both of whom previously served on Purdue's board, insisted they were assured by management that the company was meeting regulatory and legal requirements as the opioid crisis unfolded.
- Reuters