'Catastrophic injustice': Judge OKs Purdue Pharma bankruptcy plan that Shields the Sacklers

'Catastrophic injustice': Judge OKs Purdue Pharma bankruptcy plan that Shields the Sacklers
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In a bench ruling delivered over several hours on Wednesday, a U.S. judge approved a Purdue Pharma bankruptcy plan widely criticized for giving the Sackler family immunity from civil lawsuits related to the company's drug OxyContin and and profiteering that critics say escalated the nation's opioid epidemic.

"The deal grants 'releases' from liability for harm caused by OxyContin and other opioids to the Sacklers, hundreds of their associates, as well as their remaining empire of companies and trusts," NPR explained.

In a statement condemning the development, Rick Claypool, a research director for the consumer advocacy group Public Citizen, said that "allowing the billionaires at the root of the opioid crisis to walk free while thousands of its victims are in prison is a catastrophic injustice."

"Purdue Pharma is the reason the Sackler family are billionaires, and after today's settlement they will remain billionaires," Claypool continued. "The greed of some Sacklers fueled an opioid epidemic that has killed more than 500,000 Americans, gripped millions in the claws of addiction, devastated communities across the country, and cost over $2.5 trillion."

The researcher noted that "meanwhile, on any given day, 450,000 incarcerated people are serving time for nonviolent drug crimes."

drug offenses

"The Biden administration has the authority to pursue leniency for nonviolent drug offenders, whose unnecessary and cruel incarceration must be replaced with support to help communities heal the raw wounds the opioid epidemic left behind," Claypool said.

"The administration also has the authority to continue the last administration's criminal investigation and indict any member of the Sackler family who committed crimes while pursuing opioid profits," he added. "On both fronts, the administration should exercise its authority without delay."

As Reuters detailed, the bankruptcy plan, valued at more than $10 billion, will "dissolve the drugmaker and shift assets to a new company owned by a trust rather than the Sackler family members."

Reuters continued:

The Sacklers have denied allegations, raised in lawsuits and elsewhere, that they bear responsibility for the U.S. opioid epidemic. They have said they acted ethically and lawfully while serving on Purdue's board.
The Purdue bankruptcy plan includes a $4.5 billion contribution from Sackler family members. The contribution is in the form of cash that would be paid over roughly a decade and also includes $175 million in value from relinquishing control of charitable institutions.

Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, New York, who was appointed by former President George W. Bush, "provisionally approved the plan, saying he wanted modest adjustments," according to the New York Times.

Journalists live-tweeting the orally delivered ruling reported that Drain declared that "this is not the Sacklers' plan," despite the civil immunity from opioid cases being a key goal of family members.

Adam Levitin, a Georgetown Law professor specializing in bankruptcy, pushed back against Drain's criticism of reporters, academics, and lawmakers and argued that the plan aligns with what the Sacklers wanted.

"Drain's shifting the goal posts and setting up a strawman," he said. "No one informed is claiming that the Sacklers are getting criminal immunity. They're just keeping a multi-billion dollar fortune despite having wrought terrible harm to millions of people."

Brian Mann of NPR noted that although Drain said the plan wasn't defined by the Sacklers, he also acknowledged "at length that members of the family placed their wealth (which [the judge] estimates at $11 billion) offshore where there is 'a substantial issue of collectability.'"

"It is incredibly frustrating that people can send their money offshore," said Drain. The judge also highlighted the lack of apology from the Sackler family, adding that "a forced apology is not really an apology, so we will have to live without one."

Journalist Gerald Posner, author of the book PHARMA, shared various lines of the bench ruling, including Drain's point that prosecutors could pursue criminal claims against the Sacklers.

Though the Sacklers have never been charged and maintain their position that the family has no responsibility for the opioid crisis, NPR noted last week that "Purdue Pharma has pleaded guilty twice to criminal wrongdoing in its marketing of OxyContin, first in 2007 and again last year."

The outlet also reported Tuesday on Purdue Pharma's "stealth campaign" aimed at preventing a potential appeal of the bankruptcy settlement by the U.S. Justice Department.

According to Reuters, Connecticut Attorney General William Tong is also "preparing to appeal if necessary."

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