The opioid crisis remains one of America’s deadliest public health disasters. Victims demand answers about how it happened and who was responsible.
The House Committee on Oversight and Reform seemed poised to address a facet of the crisis with a hearing this coming Tuesday on the role of Purdue Pharma and its owners, the Sackler family, “in fueling the opioid epidemic.” The committee invited Purdue’s president and chief executive, Craig Landau, and four members of the Sackler family who were longtime company directors and were, according to the committee, “closely involved in Purdue’s efforts to grow the market share for OxyContin and other opioids.”
Now, we have learned that the committee, pressured by the Sackler legal team, has postponed the hearing to January. But January may be too late. By waiting, the House Oversight Committee may miss the opportunity to weigh in before advances in Purdue’s bankruptcy case possibly allow the Sacklers — one of America’s richest families, who took in billions in revenue from sales of OxyContin — to escape with little public scrutiny or accountability.
By then, a bankruptcy plan to reorganize Purdue will probably have been proposed. If, as expected, the plan seeks to release the Sacklers from liability, it will become practically impossible to uncover the full truth about the Sacklers’ role in the opioid crisis.
Purdue pleaded guilty on Nov. 24 to felony counts that included defrauding the federal government and paying illegal kickbacks to physicians to bolster dispensing of OxyContin. As part of that plea, Purdue agreed to pay $8 billion to the United States. The Sacklers, who served on the board of directors and were characterized as Purdue’s “de facto C.E.O.” by a company executive, agreed to pay $225 million in civil penalties, estimated to be about 2 percent of their wealth.
Before the settlement with the Justice Department, the Sacklers had offered to pay $3 billion to creditors in exchange for comprehensive liability releases. Creditors were split on this, and it was unclear if a majority would eventually support complete immunity for the Sacklers. But although the Purdue settlement with the Justice Department, approved by the Bankruptcy Court in November, does not require that the Sacklers be released from liability, that may be its practical effect.
This is because the settlement contains a largely overlooked poison-pill provision: If the Justice Department is unsatisfied with any reorganization plan proposed for Purdue, it can walk away from the settlement. That could more than double its claims to $18 billion, and allow it to use its civil forfeiture powers to seize Purdue’s assets. Nothing might then be left for opioid victims and other creditors.
The poison pill has made the Sacklers’ offer one creditors cannot refuse.
Is $3 billion enough? Do the Sacklers even deserve to be released from liability? Without timely House Oversight Committee hearings, those seemingly fundamental questions may not be answered in Purdue’s bankruptcy reorganization.
If the poison pill results in a plan that releases the Sacklers, then it also means that the case will probably be resolved without an independent investigation and a thorough public report about the many serious allegations against the Sacklers that have attracted the interest of the oversight committee.
