David Brust, Class of 2022, Belmont Law.
On Wednesday, October 13, 2021, a federal judge in New York declined to grant the Department of Justice’s attempt to delay Purdue Pharma’s bankruptcy settlement. Purdue Pharma, founded and owned by the Sackler family, invented OxyContin and has received sharp criticism for the drug’s role in the ongoing opioid crisis in the United States. The bankruptcy settlement plan was confirmed by a federal bankruptcy judge in September 2021 and contains several provisions that were objected to by the Department of Justice. These provisions include immunity from opioid lawsuits for members of the Sackler family in exchange for giving up ownership of Purdue Pharma and paying around $4.3 billion to support drug treatment and addiction programs.
The Department of Justice’s main issue with the settlement is the release of liability for individual members of the Sackler family. The Sackler family generated approximately $10 billion in wealth from their roles in the opioid industry. The Sackler family and Purdue Pharma’s biggest money maker, OxyContin, was approved by the FDA and released in 1995. Prior to its release, Purdue Pharma conducted zero clinical studies as to how addictive the drug could be. Additionally, Purdue Pharma was able to get FDA approval for a package insert that stated OxyContin was safer than rival painkillers. Lastly, Purdue Pharma engaged in an aggressive marketing campaign to make OxyContin one of the most, if not the most popular pain medication available. It is noted that “public health experts believe Purdue Pharma’s aggressive and at times illegal marketing of OxyContin played a key role ushering in the opioid crisis that has killed hundreds of thousands of people.”
Due to the Sackler family’s role in the opioid crisis, the Department of Justice believes that granting immunity to the family will violate due process because individuals and the government will lose their right to directly sue the family. While the District Court judge refused to delay the bankruptcy settlement, she did note there may be an issue as to whether the release of liability is constitutional. The Department of Justice can still appeal this issue to the Second Circuit and further hearings are scheduled in the federal bankruptcy court. Thus, this will likely not be the last the public hears of this case.