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2023: Agreement to pay $6 billion for the founders' withdrawal from the criminal case on the sale of narcotic drugs
On May 30, 2023, the U.S. Court of Appeals for the Second Circuit in New York ruled that pharmaceutical company Purdue Pharma could protect its owners - the Sackler family - from prosecution in a high-profile bankruptcy case. In exchange, compensation will be paid in the amount of $6 billion.
The process involves sales of OxyContin, a painkiller widely used in US hospitals. Already after the receipt of this substance on the market, it turned out that it causes a strong drug addiction, although the manufacturer initially tried to downplay this negative effect. Many patients switched to heroin and other drugs after taking OxyContin. The drug was at the center of the scandal: tens of thousands of Americans are estimated to have died from OxyContin overdoses.
Purdue Pharma tried to use bankruptcy proceedings to settle thousands of lawsuits, many filed by state and local governments over drug sales. The company itself pleaded guilty to charges related to the marketing of opioids, while its owners denied wrongdoing on their part.
As a result, the court ruled that the claims against Purdue Pharma are inextricably linked to the claims against the owners of the company, and therefore the prosecution of the Sacklers will undermine Purdue Pharma's efforts to reach an agreement as part of bankruptcy proceedings. The ruling says U.S. law allows legal protection for non-bankrupt parties (such as the Sacklers) in extraordinary circumstances. Members of the Sackler family agreed to contribute up to $6 billion to the trust, which will be used to pay off the plaintiffs' claims. In exchange, the Sacklers would receive broad legal protections from lawsuits related to the opioid crisis.[1]
2021
Payment of an additional $500 million for the promotion of drugs
In mid-March 2021, it became known that Purdue Pharma would have to pay an additional $500 million in cash to settle hundreds of thousands of lawsuits related to the opioid scandal.
Since the company filed for bankruptcy in 2019, as part of the proposed settlement, payments will be made over the next ten years, that is, until 2031. The Sackler family, which owned the company, previously agreed to pay an additional $4.2 billion to settle a number of civil lawsuits. The total settlement amount is approximately $4.28 billion. The proposal would require approval from a federal bankruptcy court in White Plains, New York.
The Sacklers are one of the richest business dynasties in the United States. In 2016, according to Forbes magazine, the Sacklers were among the twenty richest families in the United States, the net worth of all their assets exceeded $13 billion. While the Sackler family should forfeit ownership of the Purdue Pharma company, the agreement would allow the family to continue operating offshore subsidiaries for at least seven years. The latest proposal met with an objection from twenty state attorneys general.
As part of the settlement, Purdue Pharma will evolve into a new company with an independent board of directors. The company will continue selling OxyContin, the center of the opiate scandal, but will prioritize drugs that are used to treat opiate overdoses and opioid addiction.
 | Since opiate overdose cases still break all records, it's time for us to use Purdue's assets in the fight against the crisis, said Purdue Pharma President Steve Miller in a special speech. - We are confident that the presented plan will achieve this important goal.[2] |  |
Consequences of participating in the outbreak of the opioid crisis in the United States
In early February 2021, the consulting company McKinsey agreed to pay $573 million as part of an agreement to settle a case investigating its participation in facilitating the sale of opioid drugs in the United States.
According to Reuters, over 2 thousand lawsuits were filed against McKinsey. She is accused of actively advertising and promoting opiate drugs in collusion with other pharmaceutical manufacturers. For example, McKinsey, in collaboration with Purdue Pharma, earned more than $35 billion in sales of the painkiller Oxycontin. The source claims McKinsey gave the drug manufacturer and the Sackler family, which owns the company, guidance on selling Oxycontin even after the company admitted in 2007 that it had misled doctors and regulators about the drug's risks.
It is known that the company has already managed to reach an agreement with the attorneys general of 47 states, the District of Columbia and five territories that are under US administration. It is assumed that the authorities will direct the money paid to McKinsey to develop opioid treatment programs and restore people affected by their admission.
Purdue Pharma pleaded guilty in the case of unleashing the opioid crisis, which, according to the US government, led to 450 thousand overdose deaths from 1999 to 2018. Purdue Pharma faces a fine of up to $13 billion, the company in 2019 filed an application for bankruptcy.
The scandal with prescription opioid analgesics, primarily OxyContin from Purdue, began back in the 2000s. In 2020, McKinsey admitted mistakes made in working with pharmaceutical companies.
| | We recognize that we were not fully aware of the epidemic scale unfolding in our society due to the terrible consequences of opioid abuse and addiction, McKinsey noted. | |
State and local authorities are also negotiating agreements with drug distributors Cardinal Health, McKesson and Amerisourcebergen, as well as drugmaker Johnson & Johnson, by early February 2021.[3]
Notes
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