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Is Justice Truly Served in the Purdue Pharma Settlement?

When Purdue Pharma introduced OxyContin in 1996, they heralded the drug as effective with a low risk of addiction.

Fast forward to today. Addiction and overdoses have skyrocketed, putting the United States smack dab in the middle of an opioid crisis. The years 2017 and 2018 saw more than 47,000 deaths, according to the U.S. Centers for Disease Control and Prevention.

Purdue employed an aggressive strategy beyond marketing. They allegedly paid doctors for their approval and funded organizations that advocated for the drug’s use. In campaign and lobbying endeavors, they spent just shy of $900 million.

Purdue claims that their products received federal approval and subsequently prescribed by doctors, not them. Their claims fell on deaf ears nationwide as states began to file lawsuit after lawsuit.

New York state and local governments reached a tentative agreement with Purdue Pharma, known for selling the painkiller. The Sackler family, owners of the pharmaceutical company, will pay approximately $3 billion in the settlement. Upon the company restructuring, future profits will go to its creditors as part of their Chapter 11 bankruptcy filing.

While a major win for the Empire State, the Stamford-based company has a long road ahead. Not every municipality is signing on. Approximately 2,600 governments and other entities nationwide are refusing to join New York in the settlement. A good portion disagrees with the pact and the pharmaceutical company’s pursuit of debt relief in bankruptcy court.

Over time, the agreement could reach $12 billion, an amount both in dispute and, according to plaintiffs, insufficient. In the end, Pharma will not be found liable in any civil proceedings.

Objections came over the amount of the deal, which some officials say will not reach close to the $12 billion marks, and because it means the company won’t be found liable by a jury or judge and are refusing to admit any wrongdoing.

The lack of consensus could impact the outcome.

While a bankruptcy filing as part of a legal settlement may seem unusual, the move appears to be par for the course. Companies have used that strategy to keep shuttering their organizations at bay.

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