The U.S. Department of Justice has requested the U.S. Supreme Court to intervene and prevent Purdue Pharma from proceeding with a bankruptcy settlement that shields the Sackler family owners from lawsuits. An appeals court had previously denied a proposed delay, allowing Purdue to move forward with its bankruptcy plan that was approved in May. The plan would provide a $6 billion contribution to Purdue’s broader bankruptcy settlement in exchange for protection against opioid lawsuits. The DOJ’s bankruptcy watchdog, the Office of the U.S. Trustee, argued that Purdue should not be allowed to proceed with its restructuring until the Supreme Court addresses the issue of legal protections for non-bankrupt entities. The U.S. Trustee contended that Purdue’s settlement is an abuse of bankruptcy protections and does not apply to the wealthy Sacklers who withdrew $11 billion from the company before contributing $6 billion to the opioid settlement.
The approval of Purdue’s bankruptcy plan could set a dangerous precedent for other wealthy corporations and individuals to exploit the bankruptcy system, according to the U.S. Trustee. While members of the Sackler family deny wrongdoing, they expressed regret that OxyContin became a part of the opioid crisis and emphasized that the bankruptcy settlement would provide substantial resources for those in need. The Supreme Court has set a deadline of August 4 for Purdue to respond.
Purdue has sought bankruptcy as a means of resolving numerous lawsuits, many of which were filed by state and local governments, alleging that OxyContin played a significant role in the opioid epidemic that resulted in over 500,000 overdose deaths in the U.S. over the span of two decades.
It should be noted that Purdue Pharma did not immediately provide a comment, but the company argues that any delay caused by the DOJ’s request would hinder the distribution of billions of dollars to U.S. states and individual victims affected by the opioid crisis.
The lawsuits against Purdue and the Sacklers claim that the drug manufacturer misrepresented the addictive nature of OxyContin to doctors, resulting in many patients becoming addicted to opioids. Similar lawsuits related to the U.S. opioid crisis have led to settlements totaling over $50 billion with manufacturers, drug distributors, and pharmacy chains.
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