Details of a tentative settlement with Purdue Pharma, the maker of Oxycontin, raise questions about how much financial liability drug companies will face for their role in the nation’s ongoing opioid crisis, and how that money will be spent by communities. Experts say the expected sum could be just a “drop in the bucket,” when it comes to remedying the deadly epidemic.
On Wednesday it was reported that the pharmaceutical company has reached a deal with nearly two dozen states and more than 2,000 cities and counties for a tentative settlement. Purdue Pharma would not confirm that settlement when asked by the PBS NewsHour. But the National Prescription Opioid Litigation group, which represents the cities and counties that sued drug companies over the opioid crisis, issued a statement on Wednesday saying the breakthrough was heartening.
The current Purdue Pharma settlement proposal “will bring desperately needed recovery resources into local communities that, for years, have been forced to shoulder the consequences, tragedies, and financial burden of the opioid epidemic,” attorneys for that group said in an email to the PBS NewsHour.
Purdue Pharma said in a statement that 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.”
More developments are expected. Calling the settlement “good progress,” the litigation group said it still plans to appear in U.S. District Court in Ohio with its federal trial against a number of opioid manufacturers, distributors and pharmacies.
The PBS NewsHour asked health policy experts to place this potential settlement in context.
What does this settlement mean?
If this settlement is finalized, Purdue Pharma will pay nearly $12 billion to state and local governments for its role in the opioid crisis. Of that, $3 billion will come directly from the Sackler family, who own the company. They would surrender control of Purdue, which is considering bankruptcy and may file later this month, Bloomberg reported.
Since 2001, the combined cost of opioid misuse, substance use disorders, and premature death linked to opioid use rose from $29.1 billion to $115 billion by 2017, according to a 2018 analysis of the economic burden. By 2020, that figure could increase to $199.9 billion, the report suggested.
The fact that Purdue Pharma could settle for $12 billion is “unsurprising but disappointing,” said Keith Humphreys, a psychologist and professor at Stanford University who served as drug policy adviser for the Obama and Bush administrations. That number doesn’t make a dent in the true cost of this public health crisis, he said.
“The Sacklers will walk away from this billionaires, not millionaires,” and that “will be hard to take for the people who buried their loved ones,” Humphreys said.
Given how much money is needed to confront this crisis, Leo Beletsky, who directs the Health in Justice Action Lab at Northeastern University, said this settlement is “ a drop in the bucket.”
But whether Purdue Pharma played a key role in orchestrating that crisis is “debatable,” he said, adding that many factors led to the nation’s relationship with opioids. The amount Purdue Pharma must pay “is directly linked to the strength of that causal connection.”
How easily could this settlement be derailed?
New York, Massachusetts and Connecticut rejected the deal with Purdue Pharma. On the PBS NewsHour, Connecticut Attorney General William Tong said he “would like to see them meet their obligation to fund treatment and prevention and to really start to tackle this problem.”
“This is, frankly, just a down payment,” he said. “And there’s so much more to be done.”
In Oklahoma, the state said the settlement amount would fund treatment for people struggling with opioid use. But looking at how the tobacco settlement funds were spent, where “money was diverted to uses that had nothing to do, or little to do, with tobacco-related spending,” Beletsky said he was skeptical about states, cities and counties would spend the money once they received it.
“From what we’ve seen so far with previous settlements, the same picture is starting to emerge there,” he said.
Questions remain about whether or not the Sacklers will be able to continue profiting off their other pharmaceutical businesses, Humphreys said. The Sacklers, reportedly worth $13 billion at one time, also run drug companies that operate in Europe, Asia, Latin America and Canada, according to Forbes. But Purdue Pharma may time its bankruptcy filing to happen before the federal trial starts in Ohio next month, according to media reports.
How does this compare to other settlements?
In March, Purdue Pharma settled with Oklahoma for $270 million after that state’s attorney general sued the company for its role in the opioid crisis. In 2016, 11.6 Oklahomans died per 100,000 people after overdosing on opioids— slightly less than the national rate of 13 deaths per 100,000 people.
“This agreement is only the first step in our ultimate goal of ending this nightmarish epidemic,” Oklahoma Attorney General Mike Hunter said in March after his state’s settlement was reached with Purdue Pharma.
In August, a judge ruled that pharmaceutical giant Johnson & Johnson, along with its subsidiary Janssen, owed Oklahoma $572 million for fraudulent marketing that created a “public nuisance” relating to the opioid crisis, the state’s attorneys argued in court. The company vowed to appeal the ruling.
What else needs to be done?
In 1998, the nation’s largest cigarette manufacturers entered the largest civil litigation settlement in U.S. history for the harmful effects tobacco had on public health. As part of that litigation, documents emerged that revealed the degree to which those companies knew, but disregarded, how harmful cigarettes and tobacco were for people. It is unlikely that this civil lawsuit will force Purdue Pharma to fully disclose how much drug company executives knew about the harmful effects of prescription opioids, experts say.
The settlement still serves as “an appropriate recognition that billions of dollars were being made” off of prescription opioids and that company executives withheld or misconstrued information about the drugs’ addictive nature and potential for harm, said former Health Secretary Kathleen Sebelius, who served under the Obama administration.
Now co-chair of the Aspen Health Strategy Group, Sebelius said that in 2017, the group recommended more resources for treatment: from a larger number of inpatient beds and mental health services, to greater accountability for perpetrators who fueled the crisis. Looking at her own work at the Department of Health and Human Services from 2009 to 2015, Sebelius said, “We were too slow to come to terms with what was happening with over-prescribing” of opioids.
While government regulators “certainly bear a responsibility,” Sebelius said manufacturers, distribution systems and providers also played crucial roles that ushered in a public health crisis with an average of 130 people dying daily from fatal opioid overdoses.
The scope of legal action should be broader than settlement cases with pharmaceutical companies, Beletsky said. The opioid crisis itself illustrated systemic problems in how the U.S. regulates health care and industry, he said.
“Broad structural reform of the pharmaceutical industry is needed,” he said. “Learning what went wrong with opioids should inform future regulatory reform.”