Purdue Pharma’s aggressive marketing of OxyContin is often cited as a catalyst of a nationwide opioid epidemic. Oxycontin is a powerful prescription painkiller that hit the market in 1996. The company pleaded guilty to misbranding the drug in 2007 and paid more than $600 million in fines and penalties. Opioid-related overdose deaths have continued to climb, hitting 80,000 in recent years partly because of Oxycontin’s presence.
The Plan at Play
The Sackler family agreed to give up ownership of Purdue Pharma and contribute up to $6 billion to fight the opioid crisis. However, members of the family would be exempt from any civil lawsuits in exchange for this agreement. At the same time, they could potentially keep billions of dollars from their profits on OxyContin sales.
Getting off too Easy
United States Trustee William Harrington, who oversees bankruptcy cases in New York, Connecticut and Vermont, objected to the deal. The Biden administration will argue that bankruptcy law doesn’t authorize bankruptcy courts to approve a release from liability for third parties. Additionally, they say the money to be paid by the family is ensuring that they will not have to testify about their misdeeds in future litigation.
The Supreme Court & Bankruptcy Courts
The Supreme Court heard arguments in a challenge to this bankruptcy deal meant to compensate victims of Oxycontin. Bankruptcy court has a special role to play particularly in large cases like this because a settlement can be reached with so many victims. However, the Supreme Court has, of late, signaled its skepticism about bankruptcy judges. They tend to view them as a lesser form of judge because they serve for limited terms and are appointed by courts of appeal, not the president. However, bankruptcy courts serve as a kind of safety valve for dealing with wrongful conduct that results in mass injuries. While the Supreme Court may reverse the terms of this established settlement, the question remains whether it will be for the better or the worse.