Why a judge rejected a settlement with the Sackler family for their role in opioid crisis

Experts link a record number of overdoses this year from black market opioids back to the original marketing and distribution of legal opioids made by Purdue Pharma, the company owned by the Sackler family that made OxyContin. Last week, a federal judge overturned a $4.5 billion settlement that had been reached between the company, the Sacklers and local governments. William Brangham reports.

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  • Amna Nawaz:

    Well, the number of overdoses related to Black market opioids is at record highs, more than 100,000 deaths for the last 12-month period measured. The surge of fentanyl and synthetic opioids is a major part of all of that.

    Experts link this American crisis back to the original marketing and distribution of legal opioids by Purdue Pharma, the company that made OxyContin, and to the family that owns the company, the Sacklers.

    Last week, a federal judge overturned a $4.5 billion settlement that had been reached between the company, the Sacklers and local governments.

    William Brangham breaks down what's behind that decision.

  • William Brangham:

    So, what does this most recent ruling mean for Purdue Pharmaceuticals, for the Sackler family, and for the thousands of states and localities that are still wrestling with this epidemic of addiction?

    Joining me again, is Patrick Radden Keefe. He's the author of "Empire of Pain: The Secret History of the Sackler Dynasty."

    Patrick, great to have you back on the "NewsHour."

    Can you just remind us, what was the deal that this judge undid in her ruling?

    Patrick Radden Keefe, Author, "Empire of Pain": Yes, this is really quite a shocking development that has happened with this reversal.

    It was a bankruptcy deal. And over the last couple of years, you have had a process very slowly playing out at a bankruptcy court in White Plains, New York. And this was really where the endgame was going to play out for Purdue and the Sacklers, where there were thousands and thousands of lawsuits against Purdue Pharma, and hundreds of lawsuits actually naming members of the Sackler family themselves.

    But, at a certain point, they separated. And what happened was, Purdue Pharma, declared bankruptcy. The Sackler family didn't. And so they kind of sat on the sidelines of this proceeding in which people tried to decide what to do with the company. You ended up with a deal that was finalized in September, in which the Sacklers gave up their interest in Purdue. All of the lawsuits that had been against the company essentially couldn't go forward.

    The Sacklers agreed to pay $4.5 billion to help remediate the opioid crisis. But, importantly, they would acknowledge no wrongdoing themselves. And they would be granted a real kind of — a sweeping grant of immunity from any of the lawsuits against them.

    And so you had a lot of people who watched this case who said it did seem a little strange that the Sacklers, who weren't in bankruptcy court themselves — they still had their billions of dollars — were going to be issued a kind of relief from any future litigation by this federal bankruptcy judge, who would tell, for instance, the 25 or so states that wanted to sue the Sacklers, those suits can't move forward. This is all over and done with here.

    So, that was the deal. It was finalized in September. A lot of people, I think, were quite uncomfortable with the outcome. And you now see this very dramatic reversal by a federal judge who was overseeing whether or not this was a legitimate deal that could move forward.

  • William Brangham:

    We should also say that the Sackler family continues to deny that they oversold the risks of addiction and overdose from their drugs.

    But, in her ruling, the judge seemed to take issue with the fact that, in recent years, members of the Sackler family had been taking money out of Purdue Pharmaceuticals, and then would argue, well, that's partly why Purdue Pharmaceuticals doesn't have any money and thus must go bankrupt.

  • Patrick Radden Keefe:

    Yes, this is one of the funny things about this case, is people know that OxyContin has generated so much money. It's generated $35 billion in revenue. So how could Purdue be going bankrupt?

    And we now know that the answer is that, over about a 10-year period, the family was quietly pulling money out of the company. So Purdue Pharma has twice pled guilty to federal criminal charges, once in 2007 and again in 2020.

    And, in between, the family took $10 billion out of the company. And so this is what Judge McMahon, I think, was really troubled by was, she said, it looks an awful lot like the family knew that someday the company was going to have to pay the piper, and they wanted to make sure that, when that time came, as much money as could be gotten out of the company was in their personal accounts, so that the company had less money to pay the piper with.

  • William Brangham:

    The flip side of this ruling coming down is that there are lots of states and localities that, regardless of what you think about the Sacklers' liability, they believe that they needed this money right now to deal with the addiction crisis.

    And they now argue, we don't have that money, and delaying that money is a real problem for us.

  • Patrick Radden Keefe:

    Yes, I mean, this is a reality, a terrible reality of this story; 100,000 people died of overdoses last year.

    The costs of the crisis are estimated to be in the trillions of dollars. So you do have a lot of communities that are desperate for funds. But I think that there was a kind of fundamentally transactional aspect of this deal. The Sacklers said, we will put up $4.5 billion that you desperately need, but only in exchange for this immunity.

    And you have a handful of states that looked at that deal. And they said — it's not that they said there shouldn't be a number. They said, if there's a number, it's got to be higher than that, that $4.5 billion is not enough, either in terms of the potential liability here, or in terms of the needs of these communities.

    I should say, I think that that money will get paid out in the fullness of time and possibly more will get paid out. But there's going to be a delay. And I think you're right. That is going to be a painful delay for a lot of communities.

    I think that what the states that objected to the deal would say is, it'll be a bigger payday in the end and one that looks a little more like justice.

  • William Brangham:

    Patrick Radden Keefe, author of "Empire of Pain," always good to see you. Thanks for being here.

  • Patrick Radden Keefe:

    Thank you.

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