WASHINGTON — The Justice Department moved Thursday to block a bankruptcy plan that grants broad legal immunity to drug company Purdue Pharma, whose drug OxyContin has been at the center of the nation’s opioid epidemic.
Presented by William K. Harrington, the US trustee of the Department of Justice, has filed a request in federal court to stop confirming the settlement while the department is appealing the judge’s decision approving the deal.
Mr Harrington said the court should grant his application for residency because the federal government “has a great potential for success on appeal and because the harm that would result from denying residency outweighs any potential harm from being granted”.
The deal was controversial Approved this month By Judge Robert Dren, a federal judge in White Plains, New York, among other things, the Sackler family, which owns Purdue Pharma, could be absolved of future legal liability in exchange for a financial contribution of $4.3 billion from the family’s private fortune.
Mr Harrington argued in his filing that the deal took away the rights of those who had a valid legal case against the Sacklers “without their knowledge and informed consent, proper notice or opportunity to be heard.”
He also said the federal government’s case was supported by previous Supreme Court rulings.
The filing by the Department of Justice is the latest in a years-long battle to hold the Sackler family accountable for the creation, marketing and sale of OxyContin, a highly addictive pain reliever.
Some experts have argued that OxyContin helped fuel the opioid addiction epidemic that has killed more than 500,000 people across the country and continues to dominate the United States 25 years after the drug was brought to market.
But OxyContin has made the Sackler family incredibly wealthy. From 2008 to 2017, the family pulled $10.4 billion from Purdue Pharma.
With more people dying from opioid use, prosecutors began suing Purdue. By the time the company filed for bankruptcy in September 2019, it had faced 2,900 lawsuits, of which more than 600 were Sacklers’ lawsuits. Bankruptcy proceedings halted these legal claims.
Judge Dren approved the settlement plan after painstaking negotiations between the family, local governments, hospital systems and others who have sued the company and are likely to be embroiled in costly lawsuits for years to come.
Those who supported the deal, including the majority of states and some plaintiffs, argued that it would provide much-needed funding for drug treatment programs.
Steve Miller, Purdue’s chairman, said the settlement “ensures that billions of dollars will be earmarked to help people and communities affected by the opioid crisis.” Some Sackler family members described the decision as an important step in addressing the public health crisis.
But critics said the terms were unfairly protecting the Sacklers. The family granted the protection normally granted to companies that had declared bankruptcy, but not to the owners of companies if they had not themselves declared bankruptcy.
The Justice Department and some states have appealed Judge Drane’s ruling.