Wednesday’s tentative $12 billion settlement by some state, local and tribal governments with Purdue Pharma, the manufacturer of OxyContin, and the company’s owners could shape efforts to reach a global settlement with other manufacturers, drug distributors and retailers in lawsuits consolidated before a federal judge in Cleveland. The lawsuits aim to find help for communities besieged by an opioid crisis that has killed 400,000 people across the U.S. since 2000.
Here are some questions and answers about Purdue Pharma, the proposed settlement, and its importance to the multi-district litigation in Cleveland.
WHAT IS PURDUE PHARMA?
It’s a privately held company based in Stamford, Connecticut, owned by the ultra-wealthy Sackler family. It employees thousands of people worldwide and controls numerous subsidiaries. The tentative settlement calls for the money to be paid out over time with the Sacklers relinquishing control of the company.
WHY IS A SETTLEMENT WITH PURDUE IMPORTANT?
OxyContin is a time-release painkiller that’s been blamed for triggering the nation’s opioid crisis that began taking hold in the early 2000s, an assertion Purdue vehemently disagrees with. Purdue in 2007 pleaded guilty to misleading doctors, patients and regulators about the drug’s risks and paid a $634 million fine. It’s believed the Sacklers have removed billions of dollars from the company since 2007 and have shielded that wealth in an intricate web of offshore companies and trusts. While an ultimate settlement if reached could include a prepackaged bankruptcy, without a deal the company could file a free-fall bankruptcy that would greatly reduce the amount of money governments had hoped to receive to address the crisis. And generally, family owned businesses structure themselves so that the individuals are separate from the business.
WHAT DOES PURDUE SAY?
In a statement Wednesday, the company said it “continues to work with all plaintiffs on reaching a comprehensive resolution to its opioid litigation that will deliver billions of dollars and vital opioid overdose rescue medicines to communities across the country impacted by the opioid crisis.”
DOES WEDNESDAY’S SETTLEMENT SATISFY EVERYONE?
No. Roughly half the 20 states that have sued Purdue in state court have not agreed. Several state attorneys general have vowed to continue their legal battles against the company and the Sacklers. New York, Massachusetts and Connecticut were among the states saying they aren’t part of the agreement.
WHY IS A PURDUE SETTLEMENT CRUCIAL TO THE LAWSUIT IN CLEVELAND?
It’s seen as a potential template for the settlement talks being urged on by U.S. District Judge Dan Polster, who has said his primary interest is getting help to those who need it as quickly as possible.
WHAT’S THE FINANCIAL TOLL OF THE CRISIS?
The White House Council of Economic Advisers published a report in 2017 pegging the cost of the crisis at just over $500 billion in 2015. That includes lost productivity as well as costs borne by taxpayers, such as ambulance runs, jail treatment costs, and the costs of caring for children whose parents have died from opioid overdoses.
WHAT ARE OPIOIDS AND HOW ARE THEY USED?
They’re an addictive family of drugs that block pain signals between the body and brain. They include prescription painkillers such as Vicodin and OxyContin, as well as illegal drugs such as heroin and illicit versions of fentanyl. Until recent decades, they were prescribed largely for pain for patients with cancer, at the end of their lives, or with acute pain, such as after surgery. Since the 1990s, there’s been a push in the medical world, partly funded by drug companies, to do better at treating pain — and opioids came to be seen as part of the solution.
SO WHAT’S THE PROBLEM?
Recent studies have questioned their effectiveness with chronic pain and the U.S. Centers for Disease Control and Prevention has told prescribers to be cautious about using the powerful drugs to treat patients with long-term pain. Experts say the longer patients are on the drugs and the higher the doses they receive, the more likely they are to develop addictions. Also, more people with prescriptions means more access to the drugs for recreational users and addicts.
WHEN DID THE OPIOID CRISIS BEGIN?
By the early 2000s, the death toll from opioids was rising and there were growing numbers of thefts of drugs from pharmacies. The crisis deepened in the mid-2000s as prescriptions flowed freely at “pill mill” clinics, especially in Florida, run by unscrupulous physicians and where drug dealers would get drugs and spread them around the country.
HAVE PRESCRIPTIONS STOPPED BEING GIVEN OUT SO FREELY?
Yes. States have used databases to track prescriptions and prescribers, pill mills have been shut down and prescribers have become more conservative in calling for the drugs since around 2011. Government guidelines and some insurance company standards have also been tightened. But as prescription rates started falling, death rates actually rose, with more addicts using deadlier illicit versions of opioids. Preliminary data shows that the death toll declined very slightly in 2018 for the first time since the crisis began.
Barring a global settlement encompassing most if not all the plaintiffs and defendants, the first federal trial involving claims from Ohio’s Cuyahoga and Summit counties is scheduled to begin Oct. 21. Polster, the federal judge, intends to use the trial as a bellwether, providing decisions that could apply to other cases.