Pa., N.J. expect more than $300 million combined under opioid settlement with Purdue Pharma

The attorneys general for Pennsylvania, New Jersey, and other states have agreed to multi-billion-dollar settlement terms with OxyContin maker Purdue Pharma and the family members who own it, the Sacklers, over Purdue’s alleged role in fueling a nationwide opioid epidemic.

The office of New Jersey Attorney General Gurbir S. Grewal said Thursday that states participating in the settlement will receive roughly $4.3 billion to fund prevention, treatment, and recovery efforts.

New Jersey’s share comes to about 2.75% of the funds, “in an amount likely to exceed an estimated $110 million,” according to Grewal’s office.

Pennsylvania’s share is estimated at $225 million, said a spokesperson for Attorney General Josh Shapiro.

Under the agreement, Sackler family members would also give up control of family foundations holding $175 million in assets and would be “permanently banned from the opioid business,” Grewal’s office said. The settlement would also make public millions of internal Purdue documents and emails, along with evidence from investigations into the company. The agreement includes no admission of wrongdoing by the Sacklers.

A federal bankruptcy court in New York still must approve the settlement plan. Purdue filed for bankruptcy protection in September 2019 as it faced intensifying pressure from thousands of lawsuits over the far-reaching consequences of the opioid crisis. From 1999 to 2019, nearly 500,000 people died from an overdose involving an opioid, including prescription medications and illicit drugs, according to the U.S. Centers for Disease Control and Prevention.

“While this deal is not perfect, the Sacklers have used bankruptcy as a shield for true accountability for their role in jet-fueling this epidemic that takes 13 lives a day in our commonwealth,” Shapiro said in a statement. “Our collective negotiating has increased the deal from the original $3 billion offered to $4.5 billion. I know there is no amount of money that can make up for the loss of the parents, siblings, children and neighbors, but we intend to put these billions to work immediately to help address this crisis moving forward and to save lives.”

Shapiro sued Purdue in May 2019, and filed suit against members of the Sackler family in September 2019.

Last November, Purdue pleaded guilty to federal charges of fraud and kickback conspiracies related to its marketing and sales of opioids. As part of an $8.3 billion settlement with the U.S. Department of Justice, Purdue admitted to giving misleading information to the Drug Enforcement Administration about the company’s anti-diversion program aimed at reducing abuse of its drugs. It also admitted paying two doctors, through the company’s physician speakers program, to get them to write more prescriptions.

Purdue pleaded guilty in a 2007 federal case involving opioids, as well. The lead federal prosecutor at the time said the company had fraudulently led many to believe that OxyContin was safer and less addictive than other painkillers.

In the ongoing bankruptcy case, a court-appointed mediator filed a report late Wednesday laying out updated settlement terms agreed to by 15 of the two dozen states that opposed the bankruptcy plan, including New Jersey and Pennsylvania.

“The negotiations were difficult and hard-fought, with the outcome uncertain until well into the night of July 1,” the mediator wrote.

The agreement expands the scope of documents that must be made public, according to the mediator. Grewal’s office noted that Purdue will “waive its attorney-client privilege to reveal confidential communications with its lawyers about tactics for pushing opioids.”

Nine states and the District of Columbia have not yet accepted the proposed settlement, according to the mediator’s report.

“This settlement plan allows the Sacklers to walk away as billionaires with a legal shield for life,” said Washington state Attorney General Bob Ferguson, who did not sign on to the proposal. “To add insult to injury, they don’t even have to apologize.”

Purdue Pharma, in a statement, said it “will continue to work to build even greater consensus” for its reorganization plan, “which would transfer billions of dollars of value into trusts for the benefit of the American people and direct critically needed medicines and resources to communities and individuals nationwide who have been affected by the opioid crisis.”

The families of Raymond and Mortimer Sackler provided a statement Thursday, saying: “This resolution to the mediation is an important step toward providing substantial resources for people and communities in need. The Sackler family hopes these funds will help achieve that goal.”