Maker of OxyContin agrees to $270m settlement in Oklahoma

The maker of OxyContin and the company’s controlling family agreed Tuesday to pay a groundbreaking $270m to Oklahoma to settle allegations they helped create the nation’s deadly opioid crisis with their aggressive marketing of the powerful painkiller.

It is the first settlement to come out of the recent coast-to-coast wave of nearly 2,000 lawsuits against Purdue Pharma that threaten to push the company into bankruptcy and have stained the name of the Sackler family, whose members rank among the world’s foremost philanthropists.

“The addiction crisis facing our state and nation is a clear and present danger, but we’re doing something about it today,” Oklahoma Attorney General Mike Hunter said.

Nearly $200m will go toward establishing a National Center for Addiction Studies and Treatment at Oklahoma State University in Tulsa, while local governments will get $12.5m. The Sacklers are responsible for $75m of the settlement.

In settling, the Stamford, Connecticut-based company denied any wrongdoing in connection with what Hunter called “this nightmarish epidemic” and “the worst public health crisis in our state and nation we’ve ever seen”.

The deal comes two months before Oklahoma’s 2017 lawsuit against Purdue Pharma and other drug companies was set to become the first one in the recent barrage of litigation to go to trial. The remaining defendants still face trial May 28.

Prescription opioids like OxyContin were a factor in a record 48,000 deaths across the US in 2017, according to the US Centers for Disease Control and Prevention.

Oklahoma recorded about 400 opioid deaths that year. State officials have said that since 2009, more Oklahomans have died from opioids than in vehicle crashes.

Other states have suffered far worse, including West Virginia, with the nation’s highest opioid death rate. It had over 1,000 deaths in 2017.

In a statement, Purdue Pharma said the money that will go toward addiction studies and treatment in Oklahoma will help people across the country. CEO Craig Landau said the company is committed to “help drive solutions to the opioid addiction crisis.”

Purdue Pharma has settled other lawsuits over the years, and three executives pleaded guilty to criminal charges in 2007. But this is the first settlement to come out of the current coast-to-coast wave of litigation that focuses mostly on the company’s more recent conduct and threatens to push it into bankruptcy.

The agreement was announced after the Oklahoma Supreme Court on Monday denied a request from drugmakers to postpone the start of the state’s trial in May.

A lawyer suing Purdue on behalf of local governments across the country welcomed the settlement. 

“That suggests that Purdue is serious about trying to deal with the problem,” said Paul Hanly, who is not involved in the Oklahoma case but is representing scores of other governments. “Hopefully, this is the first of many.”

Of roughly 2,000 lawsuits nationally, more than 1,600 are in federal court and the rest are in state courts.

The federal lawsuits were consolidated before a federal judge in Ohio, who has pushed for a settlement before a trial in October. Purdue will likely attempt to finalise any decisions related to a settlement and a bankruptcy filing before that court date, an individual familiar with the matter told Reuters. 

Purdue’s settlement with Oklahoma relieves the immediate pressure on the drugmaker for a bankruptcy filing, said Alexandra Lahav, a professor at the University of Connecticut School of Law. She said the company likely was also in talks with others to settle.

“This may be the start of the dominoes falling for Purdue,” Lahav said.

‘Huge disservice to families’

Cheryl Juaire, whose 23-year-old son Corey died of an overdose in 2011, said she was devastated to hear about the settlement. She had been organising a group of hundreds of mothers to go to the first day of the trial and stand outside with photos of their dead children. 

Jauire, who lives in Marlborough, Massachusetts, said a complete airing of the facts is the only way to fully hold Purdue to account.

“They can’t settle,” she said. “That would be a huge disservice to the tens of thousands of families here in the United States who buried a child. That’s blood money from our children.”

Oklahoma sued 13 opioid manufacturers in all in 2017, accusing them of fraudulent marketing that led to thousands of overdoses and deaths. 

The 12 remaining defendants still face trial. It would be the first of the current round of lawsuits brought against the industry in the US to go to trial.

Purdue Pharma introduced OxyContin more than 20 years ago and marketed the powerful painkiller aggressively to doctors. Experts say those tactics contributed to overuse and abuse.

As the accusations have mounted, the Sackler family that controls Purdue Pharma has faced personal lawsuits and growing public pressure. A Massachusetts court filing made public earlier this year found that family members were paid at least four billion dollars from 2007 until last year. 

The Sacklers are major philanthropists around the world, and the family name is emblazoned on the walls at many of the world’s great museums and universities. But in the past few weeks, the Tate museums in London and the Guggenheim Museum in New York have cut ties with the family, and other institutions have come under pressure to turn down donations or remove the Sackler name.