US wants to block bankruptcy plan that would free Sackler from opioid claims

WASHINGTON – The Justice Department on Thursday blocked a bankruptcy plan giving broad legal immunity to drug company Purdue Pharma, whose drug OxyContin is at the heart of the country's opioid epidemic.

William K. Harrington, the U.S. Department of Justice's trustee, filed a motion in federal court to stop confirming the settlement while the department is appealing the judge's decision to approve the deal.

Mr Harrington said the court should grant his stay because the federal government has "a significant chance of success in the appeal and because the harm that would result from refusal to stay outweighs any harm that might result from granting a stay".

The controversial deal was approved this month by Judge Robert Drain, a federal judge in White Plains, NY, who approved the family's own fortune.

Mr Harrington argued in his filing that the deal deprived those with a valid legal claim against the Sacklers "without their knowledge and informed consent, adequate notice or opportunity to be heard".

He also said the federal government's case was supported by previous Supreme Court rulings.

The Justice Department filing is the latest in a year-long struggle to hold the Sackler family accountable for the development, marketing, and sale of OxyContin, a highly addictive pain reliever.

Some experts have argued that OxyContin helped fuel an opioid addiction epidemic that killed more than 500,000 people nationwide and that is still gripping the United States 25 years after the drug was first launched.

But OxyContin made the Sackler family incredibly rich. From 2008 to 2017, the family withdrew $ 10.4 billion from Purdue Pharma.

As more and more people died from opioid use, plaintiffs began suing Purdue. When the company filed for bankruptcy in September 2019, it faced 2,900 lawsuits, more than 600 of which named the Sacklers. The bankruptcy proceedings have suspended these legal claims.

Judge Drain approved the settlement plan after careful negotiations between the family, local governments, hospital systems and others who had sued the company and were likely to be embroiled in costly litigation in the years to come.

Proponents of the agreement, including a majority of the states and some of the plaintiffs, argued that it would provide much-needed funding for drug treatment programs.

Steve Miller, Purdue's chief executive officer, said the deal "ensures billions of dollars are spent helping people and communities harmed by the opioid crisis." And some members of the Sackler family said the resolution was an important step in addressing the public health crisis.

However, critics said the terms unfairly shielded the Sacklers. It granted the family protection normally given to companies that have filed for bankruptcy, but not to business owners when they have not filed for bankruptcy themselves.

The Justice Department and several states have appealed Judge Drain's judgment.