AG’s challenge to OxyContin maker’s bankruptcy plan results in another $113 million for WA
Washington Leadership Leads Oxycontin Maker to Commit Another $1.175 Billion to States, Cities and Tribes
OLYMPIA — Attorney General Bob Ferguson announced on March 3, 2022 that Washington would receive an additional $113 million from Purdue Pharma and the Sackler family following Ferguson’s challenge to the Oxycontin maker’s bankruptcy plan.
By challenging the original bankruptcy plan, Ferguson and eight other attorneys general secured an additional $1.175 billion from the Sacklers to help states, cities and tribes deal with the harms of the opioid epidemic. Washington’s share will more than double following Ferguson’s challenge to the bankruptcy plan, from $70 million under the original plan to $183 million. That money should be used to address the opioid crisis and help Washington’s recovery, a demand Ferguson has always insisted on.
Ferguson co-led a group of nine attorneys general who challenged the bankruptcy proposal in federal court. Washington was one of three states to present oral argument in US District Court in New York in November. Washington State Solicitor General Noah Purcell represented Washington at this hearing and presented oral arguments on a key issue. In December, United States District Court Judge Colleen McMahon agreed with Ferguson and rejected the bankruptcy proposal.
“Rather than join the majority of states in the settlement, Washington chose to lead the fight against the Sacklers and Purdue,” Ferguson said. “As a result, we have won over $100 million for Washington State to fight the opioid epidemic, and over $1 billion for states, cities and tribes across the country. . We stood up to the Sacklers and forced them to give up more of their wealth to help undo the damage they caused.
The proposed resolution still needs to be approved by the bankruptcy court. In addition, Purdue and the Sacklers appealed the district court’s decision reversing the original bankruptcy plan. Under the new proposal, Washington and the other eight attorneys general will drop their opposition to the appeal pending approval of that settlement. The federal government and other parties involved in the appeal may or may not choose to pursue the case.
If the appeal goes ahead, the proposed settlement depends on the approval of the bankruptcy plan. If the bankruptcy plan is not upheld, the proposed deal is void and Ferguson will continue to fight in court to hold the Sacklers and Purdue accountable for illegally fueling the opioid epidemic. Washington was preparing for a lawsuit against Purdue Pharma when it filed for bankruptcy.
As a result of this settlement, Washington will now receive a total of $183 million from Purdue and Sacklers to address damages from the crisis – a significant increase from the original settlement that Ferguson rejected.
The terms of the original plan, which Ferguson dismissed as insufficient, guaranteed Washington about $70 million. As a result of Ferguson’s legal challenge, Washington will now receive an additional $113 million, for a total of $183 million, and, potentially, an additional $11 million, for a total of $194 million.
- The nine attorneys general who successfully challenged the bankruptcy plan will receive additional funding compared to other states that did not challenge the plan. Because of Washington’s leadership role in the legal challenge, Washington will receive $93.1 million.
- All states, counties, cities and tribes with claims against Purdue — thousands of entities — will split $898 million. Washington will receive $20 million of this money.
- The agreement also includes the possibility of an additional $500 million that all government parties would share if proceeds from the sale of the family’s international companies reach certain thresholds. If that money becomes available, Washington will earn about $11 million more.
Under the terms of the settlement, the Sacklers and Purdue will make the final payment in 2039.
Background to the case
Washington is one of 48 states that have sued Purdue Pharma, the maker of OxyContin, for fueling the opioid epidemic. The Washington Trial claims that Purdue has embarked on a massive deceptive marketing campaign to convince doctors and the public that OxyContin is effective in treating chronic pain and has a low risk of addiction, all without evidence to support its claims . This deceptive marketing has resulted in the deaths of Washingtonians and the devastation of Washington families.
The lawsuit argues that Purdue conducted an uncontrolled experiment on the American public without any reliable clinical evidence that opioids are effective in treating chronic pain. For doctors and patients, Purdue has consistently downplayed the addiction risks of long-term use and misrepresented opioids as safe for the treatment of long-term chronic pain.
Faced with thousands of lawsuits across the country, Purdue Pharma filed for bankruptcy.
A Purdue audit introduced during bankruptcy proceedings in late 2019 showed the Sackler family had withdrawn nearly $11 billion from Purdue since 2008.
Purdue’s bankruptcy plan, approved on September 1, 2021 by U.S. Bankruptcy Judge Robert Drain, requires the Sackler family to pay $4.3 billion over nine years to the group of states, municipalities and private plaintiffs , including Washington, who have sued or have claims against the company.
Ferguson announced the appeal in September, along with the other eight attorneys general, saying the plan was inadequate and did not provide sufficient accountability.
Ferguson’s work on the opioid epidemic
In recent years, the attorney general’s office has taken on complex cases to hold big corporations accountable for their role in the opioid crisis.
Washington is currently on trial in King County Superior Court against the three largest opioid distributors – McKesson Corp., Cardinal Health Inc. and AmerisourceBergen Drug Corp. Ferguson’s lawsuit, filed in 2019, claims the companies made billions of dollars fueling the opioid epidemic by shipping huge amounts of oxycodone, fentanyl, hydrocodone and other opioids on prescription in the state even though they knew or should have known that these drugs would likely end up in the hands of drug dealers and addicts.
Last year, a multinational consultancy that worked with Purdue was legally required to pay $13.4 million at the Attorney General’s office. Consulting firm McKinsey discussed ways Purdue could “boost” OxyContin sales.
In January 2020, Ferguson filed a lawsuit against Johnson & Johnson, one of the largest suppliers of raw materials used to produce opioid painkillers, accusing the multinational of playing a key role in pushing the entire pharmaceutical industry to dramatically expand the use of prescription opioids. That case is due to go to trial later this year.
In the summer of 2017, the Attorney General’s Office hosted a summit on the opioid epidemic in Washington in partnership with the Washington State Patrol and the Washington Association of Prosecuting Attorneys. A report compiled by the organizations after the summit included a series of recommendations, several of which were the subject of an attorney general’s bill application during the 2018 legislative session. opioids. The following year, state medical boards implemented new opioid prescribing limits in Washington state similar to those requested by Ferguson.