OxyContin maker Purdue Pharma made its first appearance in bankruptcy court Tuesday, less than a day after Georgia Attorney General Chris Carr announced in The Atlanta Journal Constitution that the state will join the bankruptcy deal.
The company says it could mean $10 billion or more for the states, cities and towns that have sued. Detractors don’t believe that and say it doesn’t do enough.
Carr says the risk of fighting the deal is worse than taking what’s offered and moving on.
“The resources that will become available under the proposed structural framework will help Georgia combat the opioid crisis and address the needs of people living in our communities who have been devastated by the actions of those who fueled it,” Carr’s office said in a statement, noting that 180,000 Georgians have an opioid use disorder.
“Even if the settling parties proceeded to a trial against the company, a jury verdict or court order — regardless of the amount it orders someone to pay — is only as good as the resources actually available to pay it,” the statement said.
If the settlement pans out, no one knows yet how much money might come to Georgia or how the state might use it. But health officials said Tuesday that it’s critical that the money go to substance abuse treatment and coping with the crisis.
"I want to see it used for recovery programs across our state. And I think there should be tight oversight to make sure that that's done," said state Rep. Sharon Cooper, R-Marietta, the chairwoman of the House Health and Human Services Committee.
Like others, she cited the example of the nationwide tobacco settlement of 1998, when tobacco companies — who did not declare bankruptcy — agreed to pay more than $200 billion to states and programs. Much of that money wound up funding general state services. The Campaign for Tobacco Free Kids ranks Georgia among the lowest states for spending of its tobacco money on smoking cessation programs recommended by the U.S. Centers for Disease Control and Prevention.
The costs of the opioid epidemic to Georgia are legion. The state is arguing in its lawsuit against Purdue Pharma and other opioid companies that their actions not only led to addiction to their own drugs, but to other drugs down the line, after patients could no longer obtain prescriptions and turned to street drugs. The companies argue they cannot be held responsible for downstream harms.
Those costs, according to the state’s lawsuit, include policing for a new wave of drug users, the expense of prosecuting and jailing offenders, and money paid to obtain drugs such as Narcan to interrupt overdoses and secure training for officers on how to use them. They also include foster care costs for children whose families have been blown apart by addiction.
Not to mention rehab. There’s not enough, said Neil Campbell, the executive director of the Georgia Council on Substance Abuse, and the resources that are there as well as those that are coming must be used for education on the science of addiction.
“We have a huge shortage of behavioral health workforce,” she said.
Perhaps 80% to 90% of people with opioid use disorder never get treatment, she and others said. And misguided or ineffective treatment based on outdated myths is a problem. Education statewide — for the general public as well as caregivers, emergency room doctors and nurses — is key, she said.
Whatever the settlement amount is, it won’t erase the need for more insurance coverage for addicts, Campbell added.
But such decisions are a long way away. And the settlement, as controversial as it is now, isn’t even likely to stay the same.
Lindsey Simon, who teaches bankruptcy law as an assistant professor at the University of Georgia, spent Tuesday afternoon listening in by phone to Purdue Pharma’s first bankruptcy hearing. It went smoothly, she said, though it was clear the different parties are ready for a fight.
“The settlement will likely change,” she said. “Because bankruptcy is just a protracted negotiation. Everybody knows that things can shift. It happens in the hallway right before a hearing. It happens at the break in hearings.”
The biggest controversy is whether Purdue’s owner, the Sackler family, is getting away too easily.
Massachusetts Attorney General Mara Healey, who opposes the settlement, has said the Purdue offer may only be worth $4 billion, and that it wouldn’t touch the billions of dollars the Sackler family has already banked from the sale of OxyContin. Healey said Tuesday in a tweet: “We need to see Purdue’s offer for what it is and most importantly, for what it is not. It’s not accountability. It’s not transparency. And it’s not making perpetrators pay.”
Cooper understands the sentiment. She’s not privy to the details, she emphasized, but she said: “I personally would like to see the people who knew about it in jail. I think that would be about probably the only just, really correct punishment for them. But maybe that’s why the attorney general has decided that it’s best to go ahead. Maybe it’s that he feels we have a major crisis now, and it’s better to have the settlement money sooner rather than later.”
GEORGIA’S TAKE
The office of Attorney General Chris Carr released this statement on the Purdue Pharma settlement proposal. About half of state attorneys general support, and half oppose, the deal. Massachusetts Attorney General Mara Healey opposes the deal, saying it doesn’t touch the billions of dollars already made by the Sackler family, who own Purdue. The Sacklers’ contribution would come from the sale of Purdue’s sister company. Also, she says the settlement could fall far short of the amount Purdue claims, to as low as $4 billion.
Georgia Statements on Purdue Bankruptcy Filing:
- The parties to this proposed structural framework are interested first and foremost in holding Perdue and the Sacklers accountable for their role in creating and perpetuating the opioid crisis.
- The resources that will become available under the proposed structural framework will help Georgia combat the opioid crisis and address the needs of people living in our communities who have been devastated by the actions of those who fueled it. There are right now an approximated 180,000 Georgians who are struggling with an opioid-use disorder and many are dying every day from opioid overdoses.
- 24 states and 5 territories, along with a Plaintiffs' Executive Committee representing cities and counties from all over the country, have achieved a major breakthrough in the form of a structural framework with Purdue Pharma and the Sackler family that would result in the dismantling of Purdue and the removal of the Sacklers from involvement in the pharmaceutical industry here and around the world.
- This framework also holds the Sacklers, who have made billions from the sale of opioids, financially accountable:
- The family will be required to contribute at least $3 billion of their assets, with the potential of $1.5 billion or more from the sale of foreign companies.
- No other credible settlement plans on the table have any assurance of accomplishing either of those things.
- If approved by the bankruptcy court, the total value recovered under this framework could exceed $10 billion. Conversely, there is no guarantee of what could be recovered in a "free fall" chapter 11 bankruptcy.
- Even if the settling parties proceeded to a trial against the company, a jury verdict or court order — regardless of the amount it orders someone to pay — is only as good as the resources actually available to pay it and without a settlement there's no guarantee any of the Sackler Family's resources will be available.
- It is important to note, these efforts to hold accountable Purdue Pharma and the Sackler Family for their role in fueling the opioid epidemic are extremely important, but they are just one piece of this. We must also continue working to hold other manufacturers, as well as distributors, accountable. Our office will continue to pursue our Georgia-specific litigation in the Business Case Division of the Gwinnett County Superior Court — regardless of Purdue's status.
ANOTHER STATE’S OPPOSITION
The state of Massachusetts is one that opposes the Purdue Pharma settlement deal. Massachusetts Attorney General Mara Healey wrote this column in The Washington Post.
Purdue Pharma, the drug manufacturer behind the addictive painkiller OxyContin, filed for bankruptcy Sunday. It has been a long time coming. In the past two decades, nearly 400,000 Americans have lost their lives to the opioid epidemic. Communities have been devastated. Year after year, families have called for accountability and justice.
That’s why responding to this crisis has been my top priority. In Massachusetts, we’ve created prevention education in schools, expanded access to lifesaving medicines such as Narcan, and prosecuted criminals who traffic heroin and fentanyl. And, on behalf of our state and thousands of families who have lost loved ones, we sued Purdue Pharma for its role in creating and profiting off the opioid epidemic. I also sued the individual members of the Sackler family who own and control the company, which no public official had tried to do before.
Last week, Purdue and the Sacklers offered terms for settlement. Together with 24 of my fellow attorneys general, I said no. The main reason is simple: It doesn’t hold the company or its owners accountable.
Our case against Purdue and the Sacklers is based on years of investigation, sworn testimony, death certificates, prescription records and thousands of internal company documents that Purdue kept secret until we brought them to light. We uncovered a scheme designed to get more patients on opioids, at higher doses, for longer periods of time. That scheme put patients and families at risk so that the Sacklers could pocket billions of dollars. In recent months, the voices demanding accountability have grown. Twenty-five other states and hundreds of cities and counties have brought their own lawsuits against the Sacklers. At courthouses across the country, families have organized, bearing the photos and stories of lost loved ones.
The Sacklers would like us to believe that as part of the settlement they’re cutting a check for billions of dollars. They’re not. After ravaging communities across the country and making billions off OxyContin sales, their proposed settlement likely wouldn’t require the Sacklers to pay back a dime of the money they made from Oxycontin sales over the past few decades. Instead, they’re offering payments generated from future sales of OxyContin, as well as an estimated $3 billion from the sale of their company Mundipharma. It’s a ploy that’s offensive to families who have lost loved ones to this epidemic.
We have to ask ourselves, if we want real accountability for this wrongdoing, where should the money come from? Should it come from future sales of addictive and deadly drugs, as Purdue has proposed, or should it come from the Sacklers themselves?
I rejected the settlement because it doesn’t tell the truth about what happened. Families deserve to know what Purdue and its executives and directors knew, and what they did. The evidence — their emails, business plans, board minutes, all of it — should be put on the Internet for all to see. Purdue and the Sacklers have fought for years to keep the facts secret. Under their proposal, the story could stay hidden forever.
I also turned down their proposal because neither the company nor its leadership admit they did anything wrong. That’s not accountability.
Accountability means making the Sacklers reach into their own pockets. It means telling the full truth. It means shutting down Purdue for good. And accountability means listening to the families who are calling for justice.
Purdue’s bankruptcy filing is the company’s latest tactic to protect the Sackler fortune. It won’t work. Our case against the company and the Sacklers will end, but not this week and not on their terms. We started this fight, and we will end it with accountability and justice.
About the Author
