Oxycontin is a strong painkiller drug with oxycodone as the main active ingredient and has been used in the US since its FDA approval in 1995. Purdue Pharma, a company founded and owned by the Sackler family, is the manufacturer of Oxycontin. Unlike other painkiller drugs, this opioid drug is used for the 12-hour relief of chronic pains such as those emanating from cancer and arthritis. The compound works by inducing a morphine-like effect on the user. In a properly regulated environment and short-term use, opioids are effectively used for pain relief and as anesthesia. However, prescription opioid drugs have been linked to the opioid addiction pandemic in the US, which has led to the loss of hundreds of thousands of lives, and livelihoods and adverse effects on the country’s economy.
History of Oxycontin Addiction
In 2003, the FDA issued a warning letter to Oxycontin manufacturer Purdue Pharma addressing the drug promotion and marketing efforts, which failed to mention the serious risk of addiction. In 2007, the company had to pay $600M in fines and restitution, with the company’s top executives being fined $34.5 M after pleading guilty to misleading regulators. Between 1996 and 2001, the company invested in promotional campaigns where they organized conferences influencing physicians and encouraging them to prescribe Oxycontin. In all its sales, the company is said to have minimized the addiction risk associated with the drug in its long-term use for managing chronic pain. In their sales messages, the company stated that the risk of addiction to the drug was “very small”.
As a result, people affected by Oxycontin addiction began filing civil lawsuits for personal injuries and wrongful deaths. The plaintiffs alleged that Purdue Pharma downplayed the effects of Oxycontin. Also, in its advertising and marketing targeted at physicians, the company overstated opioid benefits for long-term pain management instead of short-term use. As a result, this increased the prescription of the drug, which led to a significant increase in the opioid pandemic witnessed in the US. Purdue Pharma was also accused of failing to report and investigate suspicious drug orders by drug stores.
In 2017, over 2000 lawsuits were consolidated in the Northern District of Ohio under Judge Dan Polster, and by 2019 when the company was filing for bankruptcy, the number of lawsuits filed against it had grown to about 3,000. The owners resisted filing for bankruptcy, despite earning billions in profits from Oxycontin sales, an event that raised a lot of criticism. The plaintiffs in the Oxycontin lawsuits included individuals, cities, counties, and tribal authorities, with some states’ attorney generals weighing in on the trial proceedings.
In 2019, Purdue Pharma was dissolved, and the Sackler family had to pay $4.5 Billion in a settlement deal that shielded them from all future civil opioid claims. In 2021, a New York bankruptcy court judge approved the deal supported by creditors. The ruling faced objections from the Department of Justice and several states, arguing that it was unfair since the Sacklers had received over ten billion dollars from the company profits and they didn’t deserve the protection. In its defense, the family also argued that half of this payout was directed toward taxes.
Months later, a district court judge withdrew the proposed settlement terming it illegal. In the ruling, the court explained that the Sacklers could not be protected from legal claims relating to the opioid pandemic. The ruling was overturned by a United States Court of Appeals For the Second Circuit three-judge panel on May 30, 2023, reinstating the nonconsensual third-party release earlier approved by the bankruptcy court.
The Sacklers’ Nonconsensual third-party release
Biden’s administration challenged the legality of the Sackler’s Oxycontin settlement in the Supreme Court, leading to the halting of the deal. The court is yet to deliver its ruling.
The United States Court of Appeals For the Second Circuit reversed the district court’s order and affirmed the bankruptcy court’s plan and the Canadian Creditors’ cross-appeal, remanding the case to the district court for further proceedings. The mechanism applied in this plan, shielding the Sackler’s family, is known as a nonconsensual third-party release. Whereby the party obtaining immunity is not the debtor and the creditors disagree with the release. This rare legal concept was codified by Congress in the Bankruptcy Code for asbestos claims, however, some judges apply it to other bankruptcy cases. It was first applied in 1980 to protect insurance companies whose clients incurred asbestos-related liabilities.
In about 600 of the lawsuits filed against Purdue Pharma, the Sacklers family was named as defendants. Critics still believe that the Sacklers billionaires have not been held responsible for the role they played in the opioid crisis. In the bankruptcy settlement plan, the Sacklers do not file for bankruptcy nor do they admit to any wrongdoing. The nonconsensual third-party code as ruled in the bankruptcy court protects the family from future opioid lawsuits. In return, the family had to give up ownership and control of Purdue Pharma. Additionally, they will contribute $4.3B to opioid abatement programs run by states and municipalities for the next decade.
Critics feel that the 4.3 billion dollars are just a fraction of the wealth the family made from the sale of the drugs which fueled the opioid pandemic.
In the ruling, the court explained that protecting the Sacklers was necessary for the fair distribution of the settlement money. The court also stated that the bankruptcy court had the power to approve the nonconsensual non-debtor release, including certain claims made by third parties against non-debtors without the consent of the third party.
The court referred to various cases where the nonconsensual third-party release was applied and emphasized Congress’s failure to shed more light on the application of the code in this particular case. The court acknowledged the controversy surrounding this mechanism in courts of appeal and highlighted the need for supreme court resolution of the matter.
The court also noted that facts and history indicated that the Sacklers were directly responsible for the opioid pandemic through the unlawful boost of Purdue’s opioid sales. However, those who took part in these activities whether they acted in their work capacities or independent duty are protected under the shareholders’ release and no legal action can be taken against them. The release is non-consensual- meaning, it is binding to consenting and non-consenting objecting parties, and those objecting cannot opt out.
The court also stated that the Sacklers’ $4.5B contribution to the debtors’ estate would facilitate the distribution of the Debtors’ estate to its creditors and payments for claims owed.
Critics of the ruling believe that the nonconsensual third-party release plan was meant to shield companies to emerge from bankruptcy but not individual owners who refuse to file for bankruptcy. They also argue that the funds contributed by the family would not cover the costs required for treatment, social services, and the necessary law enforcement, which would amount to trillions of dollars.
These funds would come from the family’s investments and the sale of their pharmaceutical companies. The initial payment totals about five hundred million dollars, and the remaining payments will be taken from the new company’s profits. The national opioid abatement fund will finance states’ efforts, while the Native American tribes will have a separate fund.
The affected 130,485 victims and families will benefit from compensation settlements of $3,500 to $48,000, with guardians of thousands of children with neonatal abstinence syndrome receiving $7,000 each.
$26 Billion J&J and opioid distributors settlement deal
In July 2022, Johnson and Johnson and three other companies named in the opioid epidemic lawsuits proposed a $26B deal to settle about 3,000 lawsuits claiming they fueled the opioid addiction crisis. These companies are three opioid drug distributors: AmerisourceBergen, Cardinal Health, and McKesson. The plaintiffs in these cases include states, counties and local governments, some of whom have already signed the agreement.
The plaintiffs accuse the J&J subsidiary of fueling the opioid crisis by selling Fentanyl patches and importing raw opium for the opioid industry. The company is also alleged to have provided misleading information to doctors and patients regarding the risk of addiction to their drugs. Fentanyl, which was marketed for pain management for cancer patients, is up to 100 times more powerful than heroin. Most opioid deaths result from fentanyl overdose when the user is tricked into buying fentanyl-adulterated prescription drugs or heroin.
J&J contributes $5B over nine years in the proposed deal, while the other three companies pay $21B over 18 years. J&J has already reached agreements and made settlements with some states, while the rest are underway.
In 2022, Mallinckrodt, a major opioid drug manufacturer, paid over $ 1 billion in settlements and payout for opioid-related claims and $26.8 M for Medicaid fraud. The company is alleged to have used misleading marketing messages to encourage the use of addictive opioid drugs contributing to the opioid addiction menace the country is currently battling.
In November 2022, three leading pharmacies CVS, Walgreens, and Walmart, agreed to pay over $12B for illegalities in their dealings related to opioid drugs which contributed to the opioid crisis.
What is an Opioid?
Opioids are naturally derived from opium poppy plants, but they can also be manufactured in a laboratory by scientists using a similar chemical structure. These compounds manage pain by attaching proteins known as mu-opioid receptors to nerve cells located in different parts of the body, such as the brain and spinal cord. Once the proteins are attached to nerve cells, they block pain from reaching the spinal cord and brain, leading to a high and relaxing feeling.
These drugs are highly addictive because of the temporary rewarding feelings they bring to the mind. They also release good neurotransmitters called endorphins, creating a powerful sense of happiness. As a result, opioids are addictive and widely overdosed.
Opioid overdose can be fatal as too much of the drug interferes with the brain section responsible for breathing, leading to respiratory arrest, coma, and death. Victims of opioid overdose exhibit certain symptoms, such as pinpoint pupils, loss of consciousness, and respiratory difficulties.
Common prescription opioid-based drugs include hydrocodone, oxycodone, methadone, oxymorphone, morphine, codeine, and fentanyl.
Opioid addiction in the US
Prescription opioids are safe when used for short-term pain relief. However, these prescription drugs are abused through overdose, and when someone takes another person’s prescription medication for the euphoric effects they cause. People who ingest, snort, or inject opioids regularly are likely to develop dependence or addiction as they keep yearning for high feelings. Those addicted to opioids experience withdrawal symptoms when they fail to take the drug. The withdrawal symptoms include constricted nausea, mental confusion, severe sweating, drowsiness, and constipation.
Statistics by the National Institute of Drug Abuse indicate that over 2M Americans are addicted to opioids, and 90 people die daily of opioid overdose. In 2021, opioid drug overdose claimed over 100,000 lives and is a leading cause of death among young people below 45 years.
Can you still file an opioid lawsuit?
Yes. If you or your loved one suffered from opioid addiction and related injuries from prescription opioid drugs, you could be eligible for compensation. You can also file an opioid lawsuit if you lost a loved one to prescription opioid addiction and overdose. A good attorney should be able to help you with the legal process in attaining the compensation you deserve. Contact our experienced attorneys today for a free case evaluation!