WASHINGTON (AP) – The Justice Department tried on Thursday to halt a bankruptcy plan that would provide Purdue Pharma substantial legal immunity for its medication OxyContin, which has been at the centre of the nation’s opioid epidemic.
The Justice Agency’s U.S. trustee, William K. Harrington, filed a motion in federal court to postpone confirmation of the settlement while the department appeals the judge’s decision to approve the deal.
Mr. Harrington said that the court should accept his stay request because the federal government “has a significant chance of victory on appeal and because the harm that would arise from rejecting a stay outweighs any potential harm from granting one.”
Judge Robert Drain, a federal judge in White Plains, New York, authorized the acrimonious agreement earlier this month. It might, for example, exempt the Sackler family, which controls Purdue Pharma, from potential legal liabilities in exchange for a $4.3 billion financial donation from the family’s own money.
In his filing, Mr. Harrington contended that the agreement violates the rights of those who have a valid legal claim against the Sacklers “without their knowing and informed assent, adequate notice, or an opportunity to be heard.”
He also stated that earlier Supreme Court judgments supported the federal government’s case.
The Justice Department petition is the latest in a multi-year fight to hold the Sackler family accountable for developing, marketing, and selling OxyContin, a highly addictive drug.
Some analysts say that OxyContin fueled an opioid addiction pandemic that has killed over 500,000 individuals in the United States and is still wreaking havoc 25 years after the medicine was put to the market.
However, OxyContin made the Sackler family extremely wealthy. The family withdrew $10.4 billion from Purdue Pharma between 2008 and 2017.
Plaintiffs began suing Purdue as more individuals died as a result of opiate usage. When the company declared bankruptcy in September 2019, it was facing 2,900 lawsuits, more than 600 of which identified the Sacklers. Those legal claims were put on hold as a result of the bankruptcy procedures.
Judge Drain authorised the settlement deal after months of back-and-forth between the family, hospital systems, and others who had sued the corporation and were likely to be embroiled in costly litigation for years to come.
Those in favour of the agreement, which included the majority of states and several of the plaintiffs, contended that it would provide much-needed funds for drug treatment programmes.
Purdue’s board chairman, Steve Miller, stated that the settlement “ensures that billions of dollars will be spent to helping people and communities who have been harmed by the opioid crisis.” According to certain members of the Sackler family, the resolution represents a significant step toward addressing the public health situation.
However, some said that the provisions unfairly protected the Sacklers. It provided the family with the protections often offered to firms that have declared bankruptcy, but not to the company owners if they have not declared bankruptcy.
The Justice Department and other states filed an appeal against Judge Drain’s decision.